PPL Global, a subsidiary of Pennsylvania based PPL Corp.announced plans to build a 600 MW natural gas-fired generationplant on Long Island, NY. The proposed $300 million facility willbe located on a 15 acre site in Smithtown, which is currently beingused as a sand and gravel operation. PPL Global is planning tobuild up to 12 gas-fired units for this project. “With thecontinued growth of Long Island, there is an acknowledged need foradditional competitive electricity sources. These proposed unitswill provide significant additional electricity to these residentsin a way that is environmentally and aesthetically sensitive forarea residents and cost effective for PPL Global,” said PaulChampagne, PPL Global president. The facility site is positionednear the Iroquois pipeline, as well as other major transmissionlines. Pending approvals from state and local agencies,ground-breaking is expected to begin in 2001, with an approximateoperational date of June, 2002.

The Pennsylvania Public Utility Commission (PUC) approved theproposed merger between PECO Energy of Philadelphia and Unicom ofChicago by a 5-0 vote. Peco Chairman Corbin A McNeill and UnicomChairman John W. Rowe will become co-CEOs of the newly formedExelon Corp. The terms of the merger as agreed upon by the PUCprovides for comprehensive customer benefits including $200 millionin rate reductions from 2002 through 2005. Additionally, Pecocommitted to keep the company headquarters in Philadelphia until2008, retain a minimum of 1,100 employees there, and maintaincharitable contributions and community service at least at currentlevels. The merger has been approved by the Department of Justice,the Illinois Commerce Commission, the Federal Energy RegulatoryCommission (see Daily GPI, April 13). Shareholders, the NuclearRegulatory Commission, and the Securities and Exchange Commissionstill must approved the deal. Completion remains on target forSeptember, the companies say.

Ultra Petroleum said yesterday that proved reserves haveincreased by 67%, or 50 Bcfe, to 125 Bcfe up from 75 Bcfe in 1999as a result of the downspacing order approved by the State ofWyoming and the Bureau of Land Management in the Jonah Field. SinceJune 1999, Ultra’s proved reserves have almost tripled, increasing184% from 44 Bcfe to 125 Bcfe. Additionally, the company has 125Bcfe of low-risk probable reserves resulting in total proved plusprobable reserves of 250 Bcfe as of this month. “This decisionallowing increased density of Jonah Field wells enables Ultra toproceed with the drilling of 22 in-fill locations at a time of veryattractive natural gas prices,” said Michael D. Watford, CEO.

Daugherty Resources said it has made a discovery of asignificant new oil and gas field in the Appalachian Basin, in theFonde Oil and Gas Field in Bell County, KY where the company hasdrilled six successful wells in its 5,000-acre lease block. Wright& Co., an independent engineering firm with offices in Houstonand Nashville, estimated that the six wells and 11 provenundeveloped locations have reserves of 4.9 BCFE. Daugherty owns onethird of the drilled wells and expects to maintain similarinterests in subsequent wells. The natural resources developmentcompany also announced yesterday that it has completed theacquisition of a 12,300 acre oil and gas lease adjacent to the newdiscovery from the J. M. Huber Corp.

Allegheny Power, the Ohio utility subsidiary of Allegheny EnergyInc., of Hagerstown, MD, reached a stipulated agreement with majorparties on a transition plan to bring electric choice to its 28,000Ohio customers. The settlement benefits shareholders by allowingthe company to recover regulatory asset costs through a transitioncharge and authorizing the transfer of 325 MW of generatingcapacity to an unregulated affiliate at book value. AlleghenyEnergy expects to have more than 6,000 MW of low-cost generatingcapacity in the deregulated marketplace by Jan. 1, 2001. Customerswill benefit from a combination of rate reductions and rate freezesduring the transition to competition, called the “marketdevelopment period,” and will be able for the first time to shopfor the company that supplies their electricity beginning nextyear, when the generation portion of the electric industry isopened to competition. The Public Utilities Commission of Ohio isexpected to approve it during the third quarter.

Ivanhoe Energy Inc. acquired rights to participate in thedevelopment of a 7,300-acre oil and gas project in the Spraberrytrend of the West Texas Permian Basin. Drilling of the first wellbegan June 13, and the development plan provides for the use of tworigs to drill up to 15 wells on the Spraberry project this year.The Canadian oil and natural gas exploration and developmentcompany has obtained a working interest of 62.5% in the projectthrough an operating agreement with Discovery Operating Inc., aTexas-based, independent oil and gas company, and Ivanhoe’sinterest will revert to 50% after payback of development costs. TheSpraberry project acreage could eventually accommodate as many as90 new wells. Based on production data from existing wells in thearea, and current oil and gas prices and costs, Ivanhoe estimatesthat the payback period for each new well drilled would beapproximately 18 months.

Chevron cleared a regulatory hurdle in its proposed acquisitionof a portion of Pacific Gas & Electric Corp.’s retail energyservices business, the Federal Trade Commission said yesterday.Earlier this month, Chevron announced that it had agreed to acquireassets from PG&E’s Energy Services unit, including energymanagement, energy efficiency, billing and information services formajor commercial, industrial and institutional customers, as wellas related infrastructure. Terms of the deal, which is expected toclose in mid-July, were not disclosed. The FTC said it granted theacquisition early termination approval of the required waitingperiod under the Hart-Scott-Rodino Antitrust Act on June 20.

TransCanada Energy announced plans to build two gas-firedcogeneration plants, one an 80 MW plant near Carseland, AB for $75million, and a 40 MW plant near Redwater, AB for $37 million. TheCarseland plant will provide power and steam to Agrium’s Carselandnitrogen operations under a 20-year agreement. Surplus power willbe sold into the Alberta Power Pool. The Carseland project was oneof three successful proposals selected by the Province of Alberta’stransmission Administrator as part of an initiative to attract newgeneration to the Calgary area in order to resolve the voltageconstraint problem on the transmission system. The two otherprojects approved Wednesday were sponsored by PanCanadian andCanadian Occidental Petroleum (see separate story). TransCanada’sRedwater cogeneration plant, located near Edmonton, AB, willprovide power and process heat to the company’s Redwater naturalgas liquids fractionation and storage facility. Surplus power willbe sold into the provincial power pool. The cogeneration plants areexpected to be in operation by November 2001.

PanCanadian Petroleum and Canadian Occidental Petroleum won thebidding for two new 106 MW power plants to be built Alberta. Theproposed plants were selected after an open solicitation forproposals to build one or more plants up to 500 MW of electricityin a 80 km radius of Calgary. The first plant, which will be builtin Calgary, will be a 50-50 venture between PanCanadian andCanadian Oxy. It will be located on the site of Canadian Oxy’s 75MMcf/d Balzac natural gas plant. The proposed facility is due to becompleted by November 2001. The second plant, will be built andoperated solely by PanCanadian, will be located on the site ofPanCanadian’s existing Cavalier compressor station in Strathmore,AB. The plant is projected to be fully operational by December2001. The proposed projects must still seek approval from theAlberta Energy Utilities Board. Each plant is expected to burn 18MMcf/d.

RedMeteor.com, a global, online, open commodities exchange forcrude oil, refined products, natural gas, LNG, and electricityannounced that it has acquired the international energy brokeragefirm TCT Energy of Houston. This follows RedMeteor.com’s recentpurchase of the domestic oil broker TCT Crude, which added humaninteraction to the online commodity exchange. TCT Energy’s brokerswill be able to help and advise traditional traders as they makethe transition from conventional to online trading. RedMeteor.comdoes not charge monthly user fees, or require credit lines, butclaims to offer access to the 300,000 market and corporate energytraders in today’s $1 trillion energy trading marketplace, charginga small commission on each trade from both the buyer and theseller. RedMeteor.com began operation this Spring with $15 millionin venture capital from Mayfield Fund and Fremont Ventures.

Dynegy Inc. announced Wednesday that Executive Vice PresidentJohn U. Clarke has resigned in order to pursue personal and otherbusiness interests. Most recently, Clarke was responsible forDynegy’s retail, technology, strategic investments,telecommunications and branding activities. For the immediatefuture, Clarke’s responsibilities will be assumed by Chairman andCEO Chuck Watson. Of Clarke’s tenure at Dynegy, Watson said, “Johnhas made many valuable contributions to the company’s success andin building a strong team that will lead Dynegy to the next level.We want to thank John for his service to Dynegy and wish him wellin his future endeavors.”

The members of the New York Mercantile Exchange voted 97.5% infavor of a demutualization plan yesterday that will make theexchange the first in New York to convert from a not-for-profitmembership structure under New York law to a for-profitorganization under Delaware law (see NGI, May 8). Thedemutualization plan calls for the equity in the exchange to remainwith the seat-owners of its Nymex Division. “Today’s approval, isjust the first step in repositioning the Exchange as a 21st centurybusiness enterprise that will create and pursue profitable newopportunities, react rapidly and decisively in an increasinglycompetitive marketplace, and explore interest by outsideinvestors,” said Exchange Chairman Daniel Rappaport. The plan hasalready received approval from the Securities and ExchangeCommission and the Exchange anticipates approval shortly from theCommodity Futures Trading Commission. It is also seeking afavorable tax ruling from the Internal Revenue Service. A newstock-holding company named Nymex Holdings, Inc., will be formed toown all of the economic interests and most of the voting control inthe for-profit membership corporation. Each existing Nymex Divisionmembership will be converted into one share of common stock inNymex Holdings. The Exchange is the largest physical commodityexchange in the world, with volume reaching close to 110 millioncontracts in 1999.

Remington Oil and Gas Corp. plans to drill 11 wells by the endof this year with an unrisked net resource potential to the companyof more than 100 Bcfe, officials said at the company’s annualmeeting Friday. The wells will be drilled in the company’s threecore areas of Mississippi, South Texas and offshore Gulf of Mexico.Remington also has been awarded all eight new leases that it bid onin the federal offshore lease sale held last March. Workinginterests in the new leases range from 75% to 100%, and willprovide the core of the 2001 exploratory program. In the offshorebusiness, platform fabrication is under way for operateddiscoveries in East Cameron 364 and East Cameron 344, andproduction from both of these developments is expected to begin inthe first quarter of 2001. The Dallas independent also announcedthat its capital expenditures for the year are expected to beapproximately $55 million, up from the originally budgeted figureof $37 million – mostly because of the company’s drilling successin the first half of this year. The increased capital will comefrom internal cash flow and a bank line of credit.

NewEnergy, a subsidiary of The AES Corp., has been granted alicense to sell electricity to retail customers in Delaware’selectric market. Already the company sells electricity tocommercial and industrial customers in Pennsylvania, New Jersey,New York, Massachusetts, Illinois and California. It will continueto focus on commercial and industry electricity users, and willserve its Delaware customers through its regional subsidiary,NewEnergy East LLC. Initially, the Dover, DE-based company willfocus on consumers in Conectiv’s territory. The AES subsidiary wasformed in 1995 specifically to serve customers in the emergingretail electricity market. See its website at www.newenergy.com.

After buying Energymarketplace.com from SoCalGas last month andrenaming it e-choicenet.com, Excelergy Corp. has relaunchedEnergymarketplace as a new Internet energy portal, designed toenable energy companies to build a customized site that can bepersonalized by business, municipal and residential customers.Sempra Energy Trading has signed a contract to useEnergymarketplace to launch a custom energy portal service for itscustomers. “The portal provides an innovative combination ofthird-party web applications with our own internal dataapplications for our customers,” said David Messer, president ofSempra Energy Trading. “We chose this solution because theseunique, value-added services will allow us to attract and servecustomers with a convenient and efficient means of communication.”While still allowing end-use customers to choose a different energysupplier, Energymarketplace also enables energy companies to offertheir customers a wide variety of products and services – such asenergy news, weather, energy pricing, asset management,presentation of energy usage data, and account review – from a menuof choices. For more information, visit the website atwww.excelergy.com. Also see www.e-choicenet.com.

Mariner Energy announced a successful appraisal well at itsdeep-water project, Devils Tower, which confirms the company’spreviously announced discovery. Devils Tower is located about 140miles southeast of New Orleans in 5,610 feet of water atMississippi Canyon Block 773. The appraisal well, MississippiCanyon 773 #3, was drilled to a total depth of 15,000 feet andencountered hydrocarbons in three zones in a separate fault blocknortheast of the discovery well. A sidetrack of the appraisal wellwill commence immediately to further delineate the discovery.Mariner is operator and has a 20% working interest. DominionExploration & Production owns a 60% working interest and willassume operatorship after rig release following the sidetrack.Other partners are Pioneer Natural and Westport Oil and Gas.

Baltimore Gas and Electric was granted a 2.69% increase in gasdistribution rates by the Maryland Public Service Commission (PSC).The raise translates to an additional $0.33 a month for the averageresidential customer. It is substantially less than what thecompany originally requested in November 1999. “We are disappointedwith the commission’s decision, which could affect our ability tokeep pace with the growing demand for natural gas services incentral Maryland,” said D. Douglas DeWitt, BGE director of gasregulatory planning. The increase, which will be effectiveimmediately, will apply to all BGE natural gas customers, includingthose who buy their gas from a supplier or broker.

Houston’s Torch Energy Advisors Inc. announced Monday that itformed a wholly owned subsidiary, Torch Energy TM Inc. (TETM).Natural gas marketing, along with refined products, derivativesmarketing and specialty product transactions will now be handled byTETM. Torch and its subsidiaries provide extensive outsourcingservices, including financial and accounting services, oil and gasoperations, hydrocarbon marketing and property acquisitions anddivestitures. Contact Blake Beyer at (713) 756-1881 forinformation.

Bighorn Gas Gathering LLC has signed an agreement to provide gasgathering services for the coal bed methane operations of J.M.Huber Corp. in the Wyoming Powder River Basin. Bighorn, whosepartners are affiliates of CMS Energy, Northern Border Partners andEnron North America, will build a 56-mile, 20-inch extension of itsgathering system in Sheridan County. Huber is in the process ofcompleting 150 coal bed methane wells in the Prairie Dog prospectarea and expects to complete an additional 100 wells by the end ofthe year. The gathering system extension will cost $17.8 millionand should be in service by this winter.

In response to the growing demand for natural gas drilling, wellcompletion, and workover services, Key Energy Services hasannounced that it will undertake several new strategic projects ata cost of about $25 million. Key Energy believes the projects willsignificantly expand its ability to serve its customers in naturalgas markets where backlogged orders exist. Key Energy alsoannounced it will issue about 10 million shares of common stock togo along with the projects. Most of the proposed projects will befocused in the U.S., Canada, and Argentina.

Key plans to refurbish 50-60 deep gas workover/completion rigs,expand the number of drill and well refurbishment facilities, openat least two more employee training and safety centers, andreallocate equipment to higher demand and pricing level areas. Workwill begin in the fiscal year 2001, and will be completed by Dec.31, 2001.

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