Once considered a problem in their oil exploration efforts, thehigh cost of natural gas is getting another look-see from EmpireEnergy. The Overland Park, KS-based producer said it would beginselling its natural gas reserves — which it used to squeeze off— from the Upper Cumberland Plateau region of north-centralTennessee once a natural gas pipeline is completed there. CoastalHydrocarbons LLC has begun laying a 4-inch line into the area andis expected to begin accepting gas in two to three months, Empiresaid. Pryor Oil Co., which holds a 40% interest in an explorationproject with 60% partner Empire, is now evaluating and high-gradingprogram leases to determine what wells to put into the natural gassales line. “Gas has been a hindrance in our exploration andproduction in that region due to the complexities it presentsduring drilling,” said Bryan S. Ferguson, Empire COO. “Previously,we didn’t have a market in which to sell the gas so while wedrilled oil wells, we either squeezed the gas off or held it information. With gas prices up and the market demand present, wefeel fortunate to now be able to put these assets to work for us.”Because of the fractured nature of the geology in the region,Empire said it was difficult to estimate the total gas reservespresent. However, every well drilled so far has had an “abundant”amount of natural gas.

Utilicorp United’s Aquila Energy subsidiary was awarded afive-year contract to supply the power needs of Alcoa’s aluminumsmelting facility in Badin, NC. Under the contract, Kansas City,MO-based Aquila will provide risk management for both power and theimpact of weather on the energy production of Alcoa’s generatingunits. Aquila also will support the plant with the power it needsto operate its smelter 24-hours a day, seven days a week, throughthe optimizing of Aquila’s supply, Alcoa’s own generation, and themarket. “This agreement provides a stable and consistent powersupply for Alcoa’s base load energy demand, while effectivelymitigating the weather-related variability of its generatingcapacity,” said Tripp Dunman, senior director of IndustrialOrigination for Aquila.

The nation’s first virtual energy utility and subsequently oneof its most popular online utilities, Albany, CA-basedUtility.com’s CEO/founder Chris King confirmed that he is pullingback from three states, California, Pennsylvania and Massachusetts,and reassessing his company’s future plans. He refused to provideany more detail at this point, but industry observers speculatethat the runaway wholesale gas and electricity prices havedevastated the online natural gas and electricity provider that isreportedly giving up 30,000 electricity customers in Pennsylvania.A spokesman for the Pennsylvania Public Utility Commissionconfirmed it had been notified that Utility.com would be droppingout of that market, but he said the effect on the Pennsylvaniachoice program would be negligible. Most of the marketers inPennsylvania offer fixed price programs, but that has not been aproblem there since the state, powered mainly by coal and nukes,enjoys relatively stable prices and is a net exporter of power. ThePUC spokesman there had been no unusual fall-off among othermarketers and the agency had understood the financial problemsstemmed from Utility.com’s involvement in the California market.The online utility plans to continue in the business of providingsoftware applications for utilities.

Louisiana based-Stone Energy Corp. reported it has completed itsmerger with Basin Exploration almost three months after thecompanies signed their initial agreement. Basin stockholders willown 29% of the new company, which will retain the name of StoneEnergy and its headquarters in Lafayette. As of Dec. 31, 1999, thecombined company’s total proved reserves were 597 Bcfe.

Dynegy completed its previously announced acquisition of 1,700MW of power generation located in the town of Newburgh, NY.Included in the $903 million purchase was the 500 MW Danskammerplant and the 1,200 MW Roseton facility. Late last year, the NewYork State Public Service Commission (PSC) approved a joint requestfrom Central Hudson Gas and Electric Corp., Consolidated Edison Co.of New York Inc., Niagara Mohawk Power Corp. and Dynegy Power Corp.to transfer ownership of the facilities. Dynegy said it will beable to deliver power to wholesale customers in the New York, PJMand NEPOOL markets

Senate Committee on Energy & Natural Resources CommitteeStaff Director Andrew D. Lundquist has been appointed by PresidentBush to the position of director of the National Energy PolicyDevelopment Group. Lundquist will work directly with Vice PresidentDick Cheney, who will chair the energy task force. Lundquist’s soonto be vacated position of staff director will be filled by currentDeputy Staff Director Brian Malnak.

In a move that will create the largest U.S. retail propanemarketer, UGI Corp.’s AmeriGas Propane Inc. announced it would buythe retail propane distribution business of Columbia Energy Groupfor $208 million. Columbia is owned by NiSource Co. The deal wasfinanced with $163 million of debt and $53 million in AmeriGasshares issued to Columbia. NiSource’s Columbia businesses areranked as the fifth largest U.S. retail propane marketer, sellingmore than 307 million gallons of fuel a year in 29 states. AmeriGassaid the deal would add to earnings in the first fiscal yearfollowing closing.

The problem isn’t just a shortage of power generation,”California’s severely stressed gas infrastructure has been anoverlooked factor in the current and likely future crisis,”according to Stephen L. Thumb, director of the natural gas practiceof Energy Venture Analysis of Arlington, VA. A new report by thegroup pinpoints high gas prices and infrastructure problems withboth natural gas and power transmission lines. “Pipeline explosionsand outages only served to make a bad situation even worsethroughout the years. Several natural gas pipeline infrastructureprojects are on the drawing board, but will not be built in time toalleviate the problem until at least 2002. ” Copies of the report,The California Energy Crisis, may be purchased by contacting A.Michael Schaal at 703-276-8900.

Houston-based Altra Energy Technologies Inc. has launched a newcorporate brand, which the company said more “closely aligns” itwith its established market position. The company said its newtagline, “Market wide, Market deep,” reflects the company’s focuson complete technology solutions for the energy industry. “AtAltra, we have worked hard over the last five years to establishour position in the market,” said CEO Paul Bourke. “Now that wehave cultivated the ‘ultra’ market, we have developed a companybrand to better communicate our focus.” He said the brand positionsAltra “exactly where we need to be as we move forward.” Altra hasrenamed its suite of products, formerly known as Altrade, whichwill now be known as The Altra Energy Market. The suite of productswill include the Altra Market Place, Altra Market Tools, AltraMarket Solutions and Altra Market Services.

In an effort to pursue options to optimize its business,Tulsa-based Sapient Energy Corp. reported it has retained Randall& Dewey, Inc. to provide transaction advisory services, whichinclude the hosting of the independent oil and gas company’s dataroom opening. Sapient sad the opening will include development andexploration potential of its asset base, along with detailedconfidential information pertaining to the company. It expects tohave the data room open in late February, with interested partiessubmitting their proposals by the end of March. “Over the pastthree years, we have built a solid asset base through theacquisition of producing oil and gas properties in theMid-Continent, Permian Basin, and Northern Louisiana regions,” saidRobert R. Anderson, CEO of Sapient Energy. “Our focus on operated,high margin natural gas properties with significant developmentpotential has afforded us the current opportunity to evaluateseveral strategic alternatives to create additional value for ourshareholders.” Sapient Energy currently net produces 20 MMcf/d ofnatural gas and 1,500 b/d of crude. Approximately 90% of thecompany’s 500 wells are operated with almost 75% of its 150 Bcfe ofreserves being natural gas. For more information on the SapientEnergy sale check with Randall & Dewey at www.randew.com.

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