Domestic natural gas demand next year will surpass the 22 Tcfmark for the first time since 1972, the Independent PetroleumAssociation of America (IPAA) forecasts. The higher anticipateddemand, which the producer group pegged at 22.56 Tcf, will bespurred by growth in the industrial and residential sectors, withdemand for the former expected to be up 2.5% to 9.14 Tcf and demandfor the latter up by 2.1% to 5 Tcf. The IPAA anticipates a similar2.1% growth for the commercial sector to 3.3 Tcf, but demand byelectric utilities – where the gas industry is pinning much of itshopes for the future – is likely to tumble by 1% to 3.18 Tcf nextyear. It forecasts about another 1.94 Tcf will be consumed as leaseand plant fuel and pipeline fuel. Demand will outstrip domesticsupply of dry natural gas, which is predicted to increase by 1% to18.94 Tcf next year. The majority of the U.S. gas production willbe in the Gulf of Mexico, the group said. Gas imports will accountfor about 3.94 Tcf, up 5.7% from 2000. For oil and natural gasliquids (NGLs), the IPAA estimated domestic production willincrease slightly to 7.83 million barrels per day, while importswill hit 11.30 million b/d. U.S. consumption of oil and NGLs willrise by 1.3% to 19.87 million b/d.

The BP Amoco and Atlantic Richfield Co. (ARCO) merger isofficially complete. BP Amoco will deliver to former ARCO holders,for each share of common stock owned, 1.64 American depositaryshares (ADS) of BP Amoco. Alternatively, if properly elected, ARCOcommon stock holders can receive BP Amoco ordinary shares. Cashwill be paid for fractional share interests. BP Amoco ADSs trade onthe New York Stock Exchange and other North American exchangesunder the symbol BPA with one ADS representing six ordinary sharestraded on the London Stock Exchange. Existing BP Amoco ADR holdersand existing ARCO preference stock holders do not need to take anyaction with respect to this transaction.

EnergyPrism.com Inc., a business-to-business e-commerce companyfocusing on the global energy industry, formed eight newbusiness-to-business e-commerce marketplaces. They add to the NewYork City-based company’s upstream petroleum marketplace (now namedOilPrism.com), which was launched in September. Each marketplacewill be tailored to the needs of various sectors of the globalenergy industry. The marketplaces will serve refining andprocessing, service stations, electric power, local gasdistribution, lubricants, petroleum shipping, energy employment andstaffing and commodity supplies. EnergyPrism.com will roll out thenew web sites by the end of April. Each new marketplace will offercontent, community and information on the leading energy companiesand suppliers in each sector. For more information aboutEnergyPrism.com, visit www.energyprism.com.

AES Corp. of Arlington, VA, announced a 2-for-1 stock split.Each shareholder of record on May 1 will receive as a dividend oneadditional share of AES common stock for each share held on thatdate, payable on June 1. AES is a leading global power company withcompetitive generation, distribution and retail supply businessesin Argentina, Australia, Bangladesh, Brazil, Canada, China,Dominican Republic, El Salvador, Georgia, Hungary, India,Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, the UnitedKingdom and the United States. The company’s generating assetsinclude interests in one hundred and twenty-five facilitiestotaling more than 44 gigawatts of capacity.

Petroleum Place Inc., of Englewood, CO, said wholly ownedsubsidiary, The Oil & Gas Asset Clearinghouse LP, aHouston-based provider of live, oral bid auctions of oil and gasproperties, will hold its first Internet-only auction of producingoil and gas royalty interests May 8 – 10, 2000. The auction willconsist of 65 lots owned by the Permian Basin Acquisition Fund(PBAF) based in Midland, TX. Bidding will be open from 8 a.m. May 8through 10 a.m. May 10. Beginning at 10 a.m. May 10 lots will beginclosing in sequential order. To register as a bidder, visitwww.petroleumplace.com or www.ogclearinghouse.com. Property dataand auction registration can be viewed at either site by clickingon “auction info” and providing a client number and password. Forinformation or assistance in registration or setting up a clientnumber/password, contact The Clearinghouse, (281)873-4600 and askfor bidder registration.

Nevada Power filed a motion in Nevada State District Court inCarson City asking the court to halt an order by the PublicUtilities Commission of Nevada (PUCN) to lower the utility’selectricity rates in southern Nevada. Last month the utility fileda petition with the state court to reverse the PUCN’s March 27order to reduce rates for fuel and purchased power to serveSouthern Nevada electric customers. Today’s filing of a “motion forinjunctive relief” is the next step in the normal progression ofthat lawsuit. The motion asks the court to immediately put intoeffect a $110 million rate request filed by Nevada Power on Sept.30, 1999. That request was dismissed in February by the PUCN, whichlater ordered the rate reduction. The rate request is for fuel andpurchased power expenses previously incurred to serve NevadaPower’s 567,000 electric customers in southern Nevada, and adjustsfuture rates to reflect ongoing higher costs for fuel and purchasedpower. Even with the increase, Nevada Power’s rates still would bethe lowest in the Pacific Southwest, according to Doug Ponn, vicepresident of regulatory and governmental affairs. “Prices we payfor fuel to operate our power plants are affected by the samefactors that have driven up gasoline prices,” Ponn said. “Motoristsare paying more at the gas pump to drive their cars, and utilitiesare paying more for natural gas to run their electric generators.”Nevada Power Company and Sierra Pacific Power Co. are the principalsubsidiaries of Sierra Pacific Resources.

Aspen Group Resources Corp. (formerly Cotton Valley Resources)is now trading under its new corporate name and symbol effectiveApril 17 on the OTC Bulletin Board. The shareholders of Aspen GroupResources approved the name change at the meeting held February 28,and the shares now trade under the new name, and under the newsymbol, ASRG. The Company currently owns interests in approximately500 wells and an equivalent number of offset locations in eightstates with a predominant focus in Oklahoma and Texas.

Plug Power Inc. signed a joint development agreement with AxivaGmbH, Frankfurt, Germany, to develop a high temperature membraneelectrode unit (MEU) that is expected to simplify Plug Power’sresidential fuel cell systems and decrease their costs. Axiva’s MEUwill enable Plug Power’s fuel cell systems to operate reliably attemperatures above 120oC. This high operating temperature improvesfuel cell tolerance to certain pollutants, enables the user toeffectively utilize the heat so that system efficiency isincreased, and reduces overall system complexity by simplifying thefuel processor. “Our development efforts are targeted at reducingcost, size and weight, so that it will be commercially attractive,”said Gary Mittleman, Plug Power president and CEO. “This agreementputs us another step closer to that goal.”

PPL Corp. announced that its PPL EnergyPlus subsidiary is nowsupplying electricity to business customers in Maine. PPL Corp. hasbeen part of the Maine business community for nearly a year. In1999, a subsidiary company purchased 89 MW of generating assets inMaine from Bangor Hydro-Electric Co., as well as transmissionrights in Maine to import electricity from Canada. PPL EnergyPlusis an electricity supplier now serving customers in four stateswith competitive electricity markets: Pennsylvania, New Jersey,Delaware and Maine. In 1999, it sold more than 10 billion kWh ofelectricity to industrial, commercial and institutional customers.PPL EnergyPlus also can provide natural gas supply to businessesand, through affiliated companies, offers a full range ofenergy-related services. At this time, PPL EnergyPlus is not makingoffers to residential customers in Maine. Businesses in Maine canlearn more about PPL EnergyPlus by visiting the company’s web site:www.pplenergyplus.com . Electric choice began in Maine on March 1.

Reliant Energy Thermal Systems, an unregulated affiliate ofReliant Energy’s Retail Group, is providing energy managementservices to the Astrodomain Complex for SMG/LMI, contractor to theHarris County (TX) Management Corp. The stadium and exhibitioncomplex is made up of Houston’s Astrodome, Astrohall andAstroArena. SMG/LMI contracted with Reliant Energy Thermal Systemsfor an initial three-year period to provide operation andmaintenance of the cooling and heating plants, including HVAC(heating, ventilation, and air-conditioning) systems; maintenanceof the plumbing, electrical, and lighting systems; and utilitymanagement and new plant consulting services. The effective date ofthe contract was April 1, with renewal options. Other terms are notbeing disclosed.

MDU Resources Group, Inc. said its subsidiary, WBI Holdings,Inc., bought 1 Tcf of coal-bed methane gas reserves, productionfacilities, 187,000 acres of properties and a Powder River Basingathering system in Wyoming from Preston, Reynolds & Co., Inc.The acquisition is expected to be accretive to MDU earnings in thefirst year. Financial details were not disclosed. The effectivedate of the deal was April 1. Redstone Gas Partners, LLC, asubsidiary of Preston, Reynolds & Co. and the operator of allthe leasehold positions, is included in the acquisition. Theexisting management and operating teams at Preston, Reynolds &Co. and Redstone are being retained. “This acquisition makes us asubstantial player in one of the most rapidly developing andexciting natural gas exploration and production regions in theonshore United States,” stated John K. Castleberry, president andchief executive officer of WBI Holdings, Inc. “The management teamof Redstone Gas Partners, LLC, was one of the first operators tosuccessfully develop coal bed methane reserves and production and,as a result, has a strong geologic and hydrologic understanding ofthe development.”

BP Amoco has become the latest producer to shell out big bucksto settle whistle-blower claims for underpayment of royalties onoil production during the past decade. It has agreed to pay $32million as part of a settlement with the Department of Justice(DOJ), joining the ranks of other oil producers – Mobil Oil ($45million), Oxy USA Inc. ($7.3 million), Chevron ($95 million) andConoco Inc. ($26 million). Two whistle-blowers alleged that BP andAmoco underpaid their royalties prior to their merger. Thecomplaint against BP and Amoco was filed in a federal court inLufkin, TX, where a number of other cases alleging underpayment ofroyalties on natural gas production are pending as well. The DOJalready has intervened in three civil lawsuits accusing affiliatesof ExxonMobil Corp., Shell Oil Co. and Burlington Resources Inc. of”knowingly undervaluing” their royalties on gas, and it hasindicated it is investigating other gas-royalty cases. The twowhistle-blowers who initiated the complaint against BP and Amocounder the False Claims Act will share more than $5.4 million of thesettlement proceeds.

ABN AMRO Inc. completed the transfer of the energy futures andoptions business from Merrill Lynch. About 30 people, includingthree principals from Merrill Lynch, have joined ABN AMRO’s globalenergy futures group in New York and London. John Hill, RichardRedoglia and Richard Kane have joined Richard Schaeffer asco-directors of the global energy futures business. ABN AMR, asubsidiary of ABN AMRO Bank NV, is a full-service investmentbanking, advisory and brokerage firm.

Altra Energy Technologies Inc., chose TIBCO Software Inc. tosupport its growing business-to-business electronic marketplace.TIBCO’s real-time software helps power some of the world’s leadingenergy firms, including Enron, Dynegy, Coral Energy, ExxonMobil,Williams, Endesa and Centrica. Using the scaleable TIBCOActiveEnterprise e-business product suite, Altra Energy is now ableto support an unlimited number of traders on its Altrade electronicmarketplace, a real-time, anonymous marketplace where customersmeet on-line to trade natural gas, crude oil, natural gas liquidsand power. TIBCO ActiveEnterprise also allows Altra to offer usersconstantly updated trading applications through their Web browsers,making it easy and convenient for traders to participate in Altra’se-commerce community. In the $340 billion-a-year energy market,Altra’s energy trading is now approaching the $1.5 billion-a-monthmark. According to Forrester Research, an industry research firm,Altra’s 1999 level of $9 billion in energy trading represented morethan 20% of North America’s total 1998 e-commerce volume. TIBCO’se-business infrastructure is helping Altra meet these demands forits services.

Occidental Petroleum announced net income of $271 million forthe first quarter compared with a net loss of $70 million for thefirst quarter of 1999. Earnings before special items were $264million compared with a loss of $68 million for the first quarterof 1999. “Our strong first quarter performance was driven by recordquarterly profits from oil and gas and the strong recovery of ourchemical business,” said CEO Ray R. Irani. “This year’s firstquarter chemical earnings of $143 million virtually equaled the1999 total year chemical earnings before special items of $147million.

National Fuel Gas Co. reported earnings of $71.1 million for thesecond quarter ended March 31, compared with $61.1 million for thesame quarter last year. The increase was the result of higherearnings in exploration and production, utility, timber and energymarketing. Higher earnings were offset in part by lower earnings inthe international and pipeline and storage segments. In the E&Psegment, earnings were $7.9 million, up $7.8 million. Significantlyhigher oil and gas prices were the main reasons for the increase.Weighted average prices (after hedging) for oil and gas productionincreased 77% and 23%, respectively.

Financial Briefs

Semco Energy reported net income of $12.0 million or $0.67 pershare for the first quarter of the year a 12% increase from the$0.60 per share on net income of $10.4 million for the firstquarter of 1999. “We are off to a good start in meeting our goalsfor the year, despite the third year in a row of warmer than normalweather,” said CEO William L. Johnson. “Had temperatures for theperiod been normal, we would have reported record first quarterearnings of approximately $0.82 per share in 2000 compared toweather-normalized earnings of $0.63 per share in 1999.” Theincrease in earnings was attributable primarily to higher earningsfrom gas distribution, offset partially by seasonal losses from itsconstruction business. Volumes of gas sold and transportedincreased from 25.2 Bcf in the first quarter of 1999 to 39.3 Bcf inthe first quarter of 2000. The increase is attributed primarily tothe operations of the recent acquisition in Alaska offset partiallyby the impact of warmer weather. Temperatures for the first quarterof 2000 were 11% warmer than normal and also warmer than the firstquarter of 1999 when temperatures were 2% warmer than normal.

Chicago-based Nicor Inc. reported first quarter 2000 dilutedearnings per common share of $0.83 on net income of $38.8 million.This compares to $0.82 per share on net income of $39 million in1999. Operating income was $70.2 million compared with $65.4million a year ago. Improvements in gas distribution and shippingoperating results were offset by reductions in nonoperatingcontributions. Per share results for the period were favorablyaffected by the company’s common stock repurchase program. Gasdistribution operating income increased to $65 million from $61.6million a year ago. The increase in operating income reflects thepositive effect of customer additions and contributions from theperformance-based rate plan on gas supply costs. Although weatherwas 10% warmer than last year, its adverse effect on operatingresults was partially mitigated by the company’s weather insurance,which protects earnings to the extent that weather is more than6.5% warmer than normal. “On an operating basis, our primarybusinesses showed improved results in the first quarter 2000compared to the same period last year,” said Thomas L. Fisher,chairman, president and chief executive officer. “We believe thistrend will continue for the remainder of the year and expectsignificant earnings per share growth for the full year.”

Seattle-based Cascade Natural Gas reported a 24% improvement insecond quarter earnings per share over second quarter 1999 results.Net earnings available to common shareholders for the quarter endedMarch 31 were $9,866,000, or $0.89 per share, compared to$7,900,000, or $0.72 per share for the second quarter of fiscal1999. The primary reason for the 24% growth in earnings was a $3.3million increase in operating margin for the most recent quarter.Major contributors were operating margin from residential andcommercial customers was up $2.2 million with $940,000 due to theaddition of 7,900 new customers since March 31, 1999, and $1.3million resulting from increased per customer consumption, whichcan be attributed, in large part, to weather that was about 7%colder this year vs. last year. Temperatures for the most recentquarter were essentially equal to the long term average or normal.Operating margin from industrial customers was higher by $1 millionwith half the increase contributed by electric generationcustomers, $174,000 from new customers, and the remainder fromhigher deliveries to other industry categories. Cascade providesgas service to more than 187,000 customers in the states ofWashington and Oregon.

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