Apache Corp.’s third quarter results surpassed analysts’ profittarget by 11 cents mainly because of increases in gas and oilprices. Apache’s U.S. gas production grew 15% to 572 MMcf/d.. Thecompany’s earnings were $201.3 million, or $1.61 per share, morethan double the year-earlier profit of $67.8 million, or 59 centsper share. The company’s revenues rose 83 percent to $624.6million. Apache’s average realized price for oil was up 42% to$29.11/bbl and its U.S. natural gas prices were up 64% to$4.22/Mcf. During the quarter, the company completed acquisitionsof producing properties in South Texas and the Permian Basin fromCollins and Ware and in the Gulf of Mexico from OccidentalPetroleum. On Oct. 9, Apache said it planned to buy the Canadianassets of New Zealand’s Fletcher Challenge Energy in a joint bidwith Royal Dutch/Shell Group, which plans to acquire the rest ofthe company. Regulators have blocked the deal, but Shell and Apachehope to win approval for an amended bid. Apache said the Fletcherdeal would bring its oil and gas property acquisitions to about$1.5 billion this year.

Devon Energy reported the highest quarterly revenues, netearnings and earnings per share in the company’s history afterseveral acquisitions including the most recent pooling of intereststransaction with Santa Fe Snyder. It posted record third quarteroil and gas production, including a 37% increase in U.S. gasproduction to 972 MMcf/d. Its net earnings were $164.9 million for3Q2000, or $1.22 per diluted common share). Excluding the $57.2million of one-time costs attributable to the merger with Santa FeSnyder, third quarter earnings were $200.2 million, or $1.49 perdiluted common share, which compares to 3Q99 net earnings of $50.9million, or 48 cents/share.

Phillips Petroleum’s third-quarter net operating income doubledfrom year-ago levels, but refinery problems prevented the companyfrom meeting Wall Street targets. The company earned $505 million,or $1.96 a share, compared to $221 million, or 87 cents a share, in3Q99. “Leading the way were strong results from our E&Psegment,” CEO Jim Mulva said. “Production from Alaska and strongeryear-over-year operating performances in Norway, China and Nigeria- along with higher prices for crude oil and natural gas -contributed to a record quarter for net operating income.” In July,Phillips and Chevron combined their chemical businesses. Phillipsalso closed on its purchase of Atlantic Richfield’s Alaskanbusinesses, for which it paid $700 million and assumed $265 millionof debt. Gas gathering, processing and marketing earnings declinedas did refining, marketing and transportation earnings.

Even though earnings for Naperville, IL-based Nicor Inc. were up36% for the third quarter, the charge for mercury-related cleanupspushed its overall results into the red. Excluding the charge, thecompany posted net income of $27 million, or 59 cents a share,compared with $19.8 million, or 42 cents for third quarter 1999.First Call/Thomson Financial had expected Nicor to earn 51 centsper share. In its first accounting of the costs for inspecting andrepairing mercury contamination from spills when old gas regulatorswere removed from some residences, Nicor said it took a charge of$148 million, or $89.7 million after taxes. The costs were recordedas third quarter operating expenses in the gas distributionbusiness, resulting in a net loss of $62.7 million, or $1.37 percommon share. “We are obviously disappointed that the financialeffects of the mercury situation clouded what otherwise was anexcellent quarter, as well as excellent operating results thus farin 2000,” said CEO Thomas Fisher. Still, he said that Nicor expectsearnings for the year to be in the range of $2.85 to $2.95 pershare. Nicor also raised its earnings estimates for year 2001 to$3.15 per share from $3. Consensus analysts’ estimates are $3.02per share. Nicor expects to continue to incur costs to inspect, andif necessary, cleanup additional homes contaminated from mercuryspills. Nicor has submitted a plan to review about 248,000 homesfor mercury.

Independent power company Calpine Corp. of San Jose, CA postedits 17th consecutive record quarter since going public in 1996, andthe board of directors also authorized a two-for-one split of itscommon stock. Shares resulting from the split are expected to bedistributed to shareholders of record as of Nov. 6 after marketclose on Nov. 14. Net income before extraordinary charge was $147.1million, a 243% increase over net income of $42.9 million for thirdquarter 1999. Diluted earnings per share rose 159%, to 96 cents pershare for the third quarter, up from 37 cents per share for thesame period in 1999. Revenue for the quarter also increased 168%,to $678.9 million for the quarter, up from $253 million a year ago.”Calpine has turned in another record quarter of earnings,” saidCEO Peter Cartwright. “We are anticipating a strong fourth quarter,and our prospects for 2001 and beyond continue to be excellent.” Heattributed Calpine’s success to the strong performance of itsoperating facilities, “strategic acquisition in high growth energysectors and the execution of an aggressive development program.”Strong energy prices in certain markets, the beginning ofcommercial operations of the Pasadena, CA expansion and Hidalgoprojects, and other 1999 acquisitions, including geothermal steamfields and energy facilities at The Geysers, CA and six gas-firedenergy centers contributed most, he said. Earnings also benefitedfrom the company’s “strong” power portfolio.

UtiliCorp United reported a 75% jump in earnings per share forthe third quarter led by strong results from its Aquila Energysubsidiary and an increased contribution from internationalbusinesses. “The energy merchant business continues to be strong,”said CEO Richard C. Green. “Aquila’s performance and the continuedunleashing of value in our international businesses resulting fromthe initial contribution of our recent electric network acquisitionin Canada and the successful initial public offering of our telecombusiness in Australia enabled us to exceed last year’s thirdquarter results.”

Amerada Hess beat earnings estimates by a substantial margin,reporting $2.86/share compared to $1.85/share in 3Q99. Streetestimates had the company earning only $2.35/share. Its operatingearnings came in at $257 million compared with $52 million lastyear. Operating earnings in the first nine months of 2000 were $683million compared with earnings of $131 million in 1999. Thecompany’s U.S. gas production, however, plummeted 18% to 282MMcf/d. realized gas prices rose 67 cents to $3.98/Mcf.

Minneapolis-based independent power producer NRG Energy, Inc.reported net income of $88.6 million or 49 cents/share for thethird quarter versus $27.6 million or 19 cents/share in 3Q99.Revenue soared 325% to $624.8 million. “Our baseload andintermediate dispatch facilities provide a foundation forconsistent earnings, while our peaking facilities enable us tobenefit from markets in which weather and local market conditionscontribute to stronger demand for electricity,” said CEO David H.Peterson. NRG’s earnings benefited from increased generationcapacity because of a number of recently acquisitions. Since lastSeptember, it has increased its net megawatt ownership interest ingenerating facilities in operation by 112% to 14,216 MW.Additionally, 206 MW in projects were under construction at the endof the quarter. NRG’s total assets at the end of the quarter werevalued at $6.1 billion compared to $2.5 billion in 3Q99. NRG ownsall or a portion of 63 generation projects and its net ownershipinterest exceeds 14,000 MW.

Reliant Energy beat Wall Street estimates by several cents pershare during the third quarter with a 37% increase in earnings to$389 million, or $1.36 per share. Strong performance from thecompany’s unregulated domestic wholesale generation operations andgrowth in its regulated electric customer base were the primaryreasons for the earnings increase. “Our strong commercialmanagement of generating assets and commercial gas and powerpositions in attractive regions of the U.S. has allowed us to breakout of the traditional role of a local energy provider,” said CEOSteve Letbetter. The wholesale energy unit reported a 642% increasein third-quarter operating income to $319 million compared to 3Q99.Gross margins increased by $372 million. Reliant attributed thegrowth primarily to the expansion of commercial assets and tradingin several regions, as well as higher energy sales and energyprices due to unique seasonal dynamics in the Western markets.Subsidiary HL&P’s operating income jumped 13% to $500 million.Reliant’s three gas distribution companies reported an operatingloss of $15 million compared to an operating loss of $5 million forthe same period of 1999.

Kerr-McGee more than doubled its earnings to a record $266million, or $2.58/share, which was up significantly from Streetestimates of $2.17/share. “We generated substantial cash flowduring the quarter and repaid more than $250 million in debt,reducing net debt as a percent of total capitalization to 50%,”said CEO said Luke R. Corbett. “In addition, continued success withthe drill bit has resulted in development approval for our100%-owned Leadon field in the North Sea. The development ofLeadon, along with developments under way at the North Sea Skenefield and the Nansen and Boomvang fields in the deepwater Gulf ofMexico, provides the base for future production growth.”Third-quarter operating profit was $461 million compared with $241million in the 1999 quarter. Exploration and production operatingprofit rose to $406 million, almost double the $211 million in theyear-ago quarter. Sharp increases in both crude oil and natural gasprices were the primary reason for the increase. Daily gas salesaveraged 527 MMcf, down 7% from the prior-year quarter, but gasprices averaged $4.13/Mcf, or about $1.49 higher than the 1999quarter.

Conoco reported record results for the third quarter, as strongprices and margins for refined products and record refinerythroughputs produced net income of $523 million, or $0.83 perdiluted share, double that of third quarter 1999. “Earnings were atrecord levels for the third consecutive quarter, and majordiscoveries were made in Vietnam and the deep-water Gulf ofMexico,” said CEO Archie W. Dunham. “In the North Sea, we completedthe Norsk Hydro producing properties acquisition and broughtonstream the Vixen natural gas field. We also announced agroundbreaking 20-year supply contract to deliver Indonesiannatural gas to Malaysia. Great strides are being achieved inexploration. We are extremely encouraged by the Magnolia appraisalwell currently being drilled in the Gulf of Mexico. In addition, weunveiled the industry’s most powerful exploration supercomputerthat allows more cost-effective seismic data analysis. In a relatedstep, we began a massive geophysical survey over 2,000 deep-waterblocks in the Gulf of Mexico, using gravity gradiometry technologyonce used exclusively by the military,” he said. The company’s U.S.gas production was down 2% from 3Q99 levels to 826 MMcf/d. Itstotal net worldwide production was down 4% to 619 Mboe/d.

Southern Co. reported third-quarter earnings from continuingoperations of $668 million or $1.03 per share compared with $622million or 91 cents per share in the year-earlier quarter.Including one-time charges such as costs relating to SouthernEnergy’s transition to going public, the company earned $614million, or 95 cents per share, which was 3 cents/share more thananalysts expected, according to First Call/Thomson Financial. Thecompany expects to top analyst estimates for the year by about 5cents/share, earning $2.10 per share, excluding transition costsand the sale of a 20% stake in affiliate Southern Energy. Southernplans to spin off the remainder of its stake in Southern Energy inthe next six to 12 months.

In the company’s first earnings report since its $1.8 billioninitial public offering, Southern Energy Inc. announced a 59%increase in third quarter earnings to $119 million. CEO MarceFuller said she believes Southern Energy is on track to achieve anaverage annual earnings-per-share growth rate over the next fouryears in excess of 20%. The company is in the process of buying5,000 MW from Potomac Electric Power Co. It also recently completedthe $250 million purchase of Vastar Resources Inc.’s 40% interestin Southern Company Energy Marketing, the company’s energymarketing and risk management business. Southern Energy’s Americasbusiness unit, which includes the United States, Canada, SouthAmerica and the Caribbean, reported $113 million in earnings forthe third quarter, up from $34 million from the same period lastyear.

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