Enron Energy Services inked another commodity managementagreement yesterday with Rich Products Corp. for 11 years. Underthe $130 million-plus agreement, the Enron Corp. subsidiary willmanage electricity and natural gas services. Enron said theagreement covers Rich Products’ 18 major facilities in Wisconsin,New York, Tennessee, California, Ohio, Massachusetts, Illinois,Virginia, New Jersey, Georgia and Texas. Along with supplyingelectricity and natural gas, Enron will offer ongoing billingservices for all of the facilities. “Our partnership with Enronallows us access to a reliable and economical supply of electricityand natural gas,” said Mike Bingham, Rich’s executive vicepresident, operations. “Ultimately, it’s about deliveringincreasing value to our customers.” Rich Products is one of theU.S.’s largest family-owned food companies, with annual sales of$1.4 billion, and more than 7,000 employees. Regional offices arelocated in 53 countries, and specialize in bakery and dessertproducts and field technical support services.

DukeSolutions entered into an agreement with the Bank of Americayesterday to take over its energy management functions on 4,800properties. The five-year contract will allow the nation’s largestbank to focus on its customers and core business, whileDukeSolutions lowers the company’s annual energy costs.DukeSolutions will provide energy supply information management tothe bank’s numerous properties to help reduce the approximate $110million in annual energy costs.

AES Corp. joined the growing number of companies to post solidgrowth in the second quarter. AES’s net income for the secondquarter was $111 million, a 56% increase over the $71 milliondollars posted last year for the same time period. Earnings pershare were 25 cents, 7 cents above earnings in the second quarterlast year. Revenues rose 140%, from $640 million, to $1.5 billion.AES also announced yesterday that AES Power Direct has come to anagreement to purchase Titan Energy for $5 million (see Daily GPI,July 26). Titan Energy, a Toronto-based energy retail company,currently serves natural gas to 135,000 residential and smallcommercial customers in California, Virginia, Maryland,Pennsylvania and Ohio.

Continuing the upside explosion of earnings, Questar Corp.reported net income up 14% in the second quarter on the strength ofa 92% increase in earnings from oil and gas E&P. The companyreported net income of $26.2 million versus $23.1 million in 2Q1999. Questar E&P increased net income to $9.6 million in the2000 quarter from $5 million a year ealier It’s average natural gassales price rose 28% to $2.48/Mcf, while production was 15% higherat 17.7 Bcf. Oil and natural gas liquids prices were 45% higher at$19.76 per barrel in the current year quarter.

Boosted by its high-flying Internet site, Enron Corp. reportedyesterday that its second-quarter earnings rose 30% to $289million, with revenue from EnronOnline, the company’seight-month-old energy and commodity Internet trading site, rising92%. The site has handled transactions valued at more than $100billion, adding $6 billion to revenue in the first half, and isalready considered the largest Internet energy trader in the world.Net income rose to $289 million, or 34 cents, from $222 million, or27 cents, while revenue rose 75% to $16.89 billion from $9.67billion a year ago. Enron had been expected to make 32 cents ashare, based on analysts polled by First Call/Thomson Financial.Enron’s businesses reported its earnings as Wholesale EnergyOperations and Services, Retail Energy Services, Transportation andDistribution and Broadband Services. The wholesale group increased23% in the second quarter to $437 million. Retail energy reportedIBIT of $24 million compared to a $26 million loss in the sameperiod of 1999. The transportation group, which includes the gaspipeline group and Portland General Electric, reported earnings of$139 million compared with $128 million. The only loss was inbroadband services, which reported a loss of $8 million on revenueof $151 million.

El Paso Merchant Energy Co., a business unit of El Paso EnergyCorp., is expanding its commercial platform in the electric powerindustry with the formation of EP Power Finance LLC. It primarilywill focus on power and power-related opportunities in the NorthAmerican energy marketplace. The new unit will provide subordinateddebt and structured financial products to developers and acquirersof merchant power generation assets. The group will offer debtcapital with a higher risk/return profile for transactions thatrange from greenfield development projects to the acquisition ofmulti-asset generation portfolios. For information on the unit,visit El Paso Energy’s web site at www.epenergy.com.

Texaco has begun commercial production of oil and natural gasfrom its Petronius project in the Gulf of Mexico. The Petroniusplatform was completed in early May. Texaco is the operator, andTexaco and Marathon each have a 50% working interest. The projectis located in 1,754 feet of water in Viosca Knoll Block 786, about130 miles southeast of New Orleans. Current production from twopre-drilled wells is 8,700 b/d and 6 MMcf/d, and will be increasingas production ramp-up continues. An additional three pre-drilledwells will be brought on production over the next three months withrates going to 40,000 b/d and 35 MMcf/d by October 2000. More wellswill be drilled and brought on-line through the remainder of thisyear and into 2001, leading to peak production rates of 50,000 b/dand 70 MMcf/d.

Santa Fe Snyder Corp. of Houston said last week that anexploration well in Howard County, TX, Sellers 119 #1, has beensuccessful, and will extend the company’s Lost Peak area there. Thewell targeted Cisco Canyon sandstones now being exploited in theSignal Peak field six miles northwest of the well. The Sellers wellencountered 115 of gross pay sand with productive gas shows over a200-foot interval. Santa Fe has 80,000 gross acres (60,000 net)under lease in the play, and through the end of this year, expectsto drill an additional 15 development and three exploratory wells.Santa Fe plans to develop the field on 160-acre spacing, withportions of the field on 80-acre spacing. Current plans for 2001call for drilling up to 50 wells there. Gross operated productionfrom the Signal Peak field is now 25 MMcf/d and 1,300 b/d of oil.Cost of finding and development for the area has averaged $.80 perMMcfe, with operating costs of $.30 per MMcfe.

Texaco announced commercial production from the Petroniusproject located in the Gulf of Mexico, 130 miles southeast of NewOrleans. Installation of the Petronius platform was completed inearly May. Texaco and its partner, Marathon, each have a 50%working interest and Texaco is operator. Petronius project, locatedin 1,754 feet of water in Viosca Knoll Block 786, began productionof oil and gas on July 9 at 8,700 b/d of oil and 6 MMcf/d of gasand will be increasing production through three other wells overthe next three months, leading to rates of 40,000 b/d of oil and 35MMcf/d of gas by October. Additional wells will be drilled andbrought on line through the remainder of 2000 and 2001, leading topeak production rates of 50,000 b/d of oil and 70 MMcf/d of gas.”Petronius is an important part of our growth plan for thedeepwater Gulf of Mexico, which is a focus area of our worldwideupstream strategy,” said Robert A. Solberg, president of TexacoWorldwide Upstream Commercial Development. “Texaco worked withMarathon and numerous contractors, most of which areLouisiana-based, to move this $500 million project on a fast-trackconstruction schedule, positioning Petronius to play an importantrole in helping us achieve our production growth targets.”

Elizabethtown Gas Company, the New Jersey division of NUI Corp.,filed a request with the New Jersey Board of Public Utilities foran increase in its Gas Adjustment Clause (GAC) of $46.7 million, orapproximately an 18 percent overall increase in customers’ bills.The company said the increase “reflects the higher supply coststhat Elizabethtown Gas, like other natural gas utilities throughoutthe nation, is experiencing.” If the board approves the increase,the company’s GAC charge would rise from $12.36 per therm to $26.65a therm. The average non-heating residential customer would pay$3.57 more on a 25 therm gas bill. For a typical residentialheating customer, the average monthly bill would rise $14.29 for100 therms. Elizabethtown Gas has requested the increase to takeeffect on Oct. 1.

A Baltimore City circuit court granted a two-week stay ofBaltimore Gas and Electric’s (BG&E) customer-choice plan forelectric customers in central Maryland. This is “a temporarysetback for 1.1 million [BG&E} customers,” said Christian H.Poindexter, chairman and CEO of Constellation Energy Group,BG&E’s parent. “While we are disappointed that an interim stayhas been put into effect for two weeks,” he noted, “we areencouraged that Judge [Albert J.] Matricciani did so in such alimited fashion.” The stay was sought by the Mid-Atlantic PowerSupply Association, a New Jersey-based group representingout-of-state retail marketers. The association is challenging theMaryland’s Public Service Commissions November 1998 settlementorder that outlined how customer choice is to be implemented inMaryland. The case was remanded to the Baltimore circuit courtafter an appellate courtrescinded a prior stay last week.

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