Stamford, CT-based Energy East Corp. said that its merger withCTG Resources Inc. is close to completion and an exchange of sharesor cash is expected soon. Based on preliminary results, ChaseMellonShareholder Services, which is acting as exchange agent, willadjust the cash portion Energy East’s offer by a factor of 0.99. Inexchange for each share of CTG common stock, CTG shareholders hadthe option to receive either $41 in cash or a number of shares ofEnergy East common stock valued at $41. Energy East expectsChaseMellon to begin distributing cash and stock soon. Questionsregarding the exchange may be directed to ChaseMellon at (888)581-9932.

Atlantic LNG Company of Trinidad and Tobago has decided to usePhillips Petroleum’s liquefied natural gas (LNG) technology todevelop two additional trains at an LNG manufacturing facility inTrinidad. The first train at the center, also using Phillips’technology, produces three million metric tons of LNG per year.Trains two and three will each produce 3.3 million metric tons peryear. Phillips’ LNG process uses propane, ethylene and methane tocool and compress natural gas into a liquid state. Bechtel, thecompany that constructed the first train, will also construct traintwo and three. Train two is expected to be in service as towardsthe end of 2002, with train three following in the Fall of 2003.

Cambridge Energy signed a letter of intent to acquire oil andgas properties in Southern Louisiana from private individuals withsignificant proven, probable and exploratory reserves. The companysaid the overall value of the acquisition is $10 million. Basedupon a review of engineering reports on the property, Cambridgeenergy believes that the property has 2.2 million bbl ofrecoverable oil reserves and 11.3 Bcf of gas reserves. 1.7 millionbbl of oil and 1.8 Bcf of gas have been proven. This marksCambridge Energy’s second oil and gas acquisition in SouthernLouisiana within the last three months (see Daily GPI, June 14).The company is involved in oil & gas exploration with producingproperties in Louisiana and Indonesia.

Independent oil and gas operator Central Resources entered intotwo definitive sale agreements to sell specific oil and gasproperties and related facilities located in West Texas, themid-continent and Rockies areas, the four corners area and alongthe Texas, Louisiana and Mississippi Gulf Coast. Total proceedsfrom the sale are estimated at $70 million. Denver-based CentralResources CEO Paul Zecchi said the company will use the cashproceeds on “future acquisition and development opportunities”domestically as well as internationally. The sale transactions wereeffective on June 1, and are expected to be completed inmid-to-late September.

San Francisco-based myHomeKey.com and partners KeySpan Corp. andTXU Energy Services have launched two co-branded customized sitesto provide access to reach up to 10 million new customers foronline access to home management services. The free sites, designedfor KeySpan and TXU energy customers, will link consumers acrossthe United States with more than 15,000 local service providers andmore than 1,000 brand appliances companies, including home repairand upkeep, home monitoring and control, neighborhood and communitynotification, utility/energy services, purchased appliances andmove management. For more information visit the web sites atwww.keyspan.myhomekey.com or www.txu.myhomekey.com.

Calgary-based Precision Drilling Corp. will acquire 100% of thecommon shares of CenAltra Energy Services Inc. under an agreementannounced last Monday. If all goes to plan, Precision would havethe largest fleet of service rigs in the Western CanadianSedimentary Basin, which already is the largest oilfield servicecompany in Canada. Precision has offered 0.1432 common shares ofPrecision for each common share of CenAltra, subject to a conditionthat at least 66 2/3% of CenAltra’s shares be tendered in theoffer. CenAltra’s board unanimously approved the offer, and hasrecommended that its shareholders do the same. The acquisitionagreement provides that CenAltra will not solicit other offers,allows Precision to match any subsequent offers and provides for anon-completion fee of $8.8 million payable to CenAltra to Precisionin certain circumstances. The takeover bid is expected to be mailedto CenAltra shareholders by Sept. 22.

Coral Power LLC will supply the natural gas and collect thepower output of a 900 MW generating station to be built andoperated by Tenaska Alabama II Partners L.P., a limited partnershipcomprised of affiliates of Tenaska Inc. The two companies announcedthey had executed an energy conversion agreement for the facilityto be located near Billingsley, AL. Coral plans to market the powerthroughout the Southeast. It is the second of this type ofagreement between Coral and Tenaska. The first was signed inAugust, 1999 for an 845 MW Tenaska Gateway Generating Station inRusk County, TX. The initial financing process for the project willbegin early next year with construction slated to begin in thesummer of 2001 and be completed for summer 2003.

Denver-based Kestrel Energy Inc. reported a 390% increase in itstotal proved gas reserves to 24.5 Bcf and a 34% increase in its oilreserves to 387,000 bbl compared with the same time period lastyear. For the reporting period ending June 30, Kestrel reportedthat its proved developed producing net gas was 4.76 Bcf; proveddeveloped non-producing, 3.87 Bcf; proved undeveloped, 15.89 Bcf;and probable net gas was 9.04 Bcf. Total proved plus probable was33.56 Bcf. Most of the increases in the reserves came from theGreens Canyon project in Wyoming, where Kestrel is averaging 500 to700 Mcf/d.

With the FERC’s approval handed down in late July, and postmerger execs already named, the union between NiSource and ColumbiaEnergy Group should be completed by late October the companiessaid. Columbia shareholders were given the choice of whether theywanted to exchange their shares for New NiSource shares or thecombination of cash and New NiSource Stock Appreciation IncomeLinked Securities (SAILS). SAILS have zero coupon debt security anda forward equity contract. Columbia shareholders will receive apackage in the mail detailing their choices. The companies saidshareholders who wish to opt for the New NiSource stock deal mustsubmit their election forms and stock certificates so that theexchange agent, ChaseMellon Shareholder Services, receives them nolater than 5 p.m. EST on the second business day before the mergerbecomes effective. Elections are subject to proration, andconditioned on Columbia shareholders electing stock for at least10% of the outstanding Columbia shares.

ALSTOM ESCA Corp. teamed with Andersen Consulting to bring theelectricity markets of Texas an advanced market and operationssystem for both wholesale and retail marketplaces. ALSTOM ESCA willassist ERCOT markets through the use of its product e-terra market,which manages scheduling, pricing, dispatch, market clearance,congestion management, web portal and other energy managementfunctions. Andersen Consulting will design, develop and implementthe infrastructure necessary for a reliable and robust competitiveelectricity market in Texas. “This new system significantly impactsthe restructured electricity market. It assists customers inmanaging their energy services,” said Russ McRae, account executiveat ALSTOM ESCA.

Calgary’s Genesis Exploration Ltd. is increasing its explorationand development program 14%, to $125 million through the end ofthis year, up from its previously announced $110 million, toparallel the cash flow from oil and natural gas revenues. Theincrease is expected to add about 2,000 boe/d, up from its previousestimate of 17,500 boe/d. Donald Sabo, chairman, said that thecurrent economic climate has been “exceptionally favorable” forGenesis, and said that the company has a high quality prospectinventory and healthy balance sheet to help it expand. Additionalseismic, land acquisition and infrastructure activity is slated forthe liquids rich natural gas prospects in the West Central region,and drilling next year also will be accelerated. At its Grouardprospect, Genesis plans to increase its development drilling to 19wells on nine pads.

News Flash! Energy companies can be fun too. Such is the caseinvolving Williams employees, who according to the company, willattempt to complete the largest money raising bike ride fundraiserin the United States. Some 80 cyclists will embark on a relay-style2,000 mile journey departing from New York City on Sept. 25 andarriving at Williams Tower in Houston on Oct. 3. In the secondannual “Williams’ 2000 Riding The Line” fundraiser, each rider willcover approximately 60 to 70 miles a day, roughly tracing the pathof the company’s Transco natural gas pipeline andtelecommunications network. The fundraiser hopes to raise $5million for United Way, which if successful will be the singlelargest event in the charity’s 110-year history. The team raisedmore than $2 million dollars in the ride’s inaugural year.

Chesapeake Energy announced it had entered into a definitiveplan of merger with Gothic Energy on Monday, taking the preliminaryagreement announced on June 30 to the next stage. The cash andstock transaction estimated at $345 million is expected to becompleted on or about Jan. 15, 2001, pending regulatory approvalsand a Gothic shareholders vote. The company estimates thatpreferred stock exchanges, earnings and common stock issuance inthe Gothic transaction will increase common shareholders’ equity by$800 million in 2000.

On the strength of rising natural gas prices and a revenuewindfall, the Alberta government is paying down its debt and hascommitted C$690 million to an “energy tax refund” that will go topayments of about C$300 each to every one of an estimated 2.3million taxpayers resident in the province as of Aug. 31. AnotherC$240 million will be doled out to power consumers in utilityrebates of $C20 each to compensate for rising electricity pricesunder a provincial deregulation scheme. The provincial governmentsaid that rising natural gas prices — now forecast to averageC$4.27 (US$2.94) per Mcf this year, or C$1.77 more than thetreasury predicted in the spring — account for C$2.98 billion(US$2 billion) or 68% of a C$4.4 billion windfall jump in Albertaresource royalty revenues to C$8.5 billion this year. Alberta hasearmarked C$4.5 billion for debt repayments to bring the provincewithin about two years of being debt-free if the bonanza lasts.

Allegheny Energy Supply Co. LLC upped its total generatingcapacity last week to nearly 10,000 MW after setting up a jointventure with UGI Development. The deal will expand and marketgeneration output from facilities at UGI’s Hunlock Creek generatingstation near Wilkes-Barre, PA, and gives Allegheny Energy Supplyaccess to 46 MW to sell into the Pennsylvania-New Jersey-Marylandmarket. Under the agreement, Allegheny Energy Supply, theunregulated generating subsidiary of Allegheny Energy Inc., and UGIDevelopment, a subsidiary of UGI Corp. will share 48 MW of existingcoal-fired generation at Hunlock Creek. Allegheny Energy also willinstall a 44 MW natural gas-fired combustion turbine (CT) on theproperty owned by UGI, and then the two companies will sharejointly in the output of the units. The CT is one of five GeneralElectric LM6000 units bought recently by Allegheny Energy Supply.UGI will continue to operate the facility, and the unit is expectedto begin commercial operations by the end of this year. Earlierthis year, Allegheny Energy Supply established its presence in thePJM, announcing it would purchase 50% of Potomac Electric PowerCo.’s 166-MW share of the Conemaugh generating station located nearJohnstown, PA in a partnership with PPL Global Inc. The sale isexpected to close before the end of the year.

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