Watertown Municipal Utilities chose Tenaska Marketing Venturesof Omaha, NB, to be its gas transportation and fuel manager for thenext five years. Watertown will buy about 8 Bcf of gas from Tenaskaover the contract term. The utility recently finished constructinga five-mile pipeline directly connecting it to Northern BorderPipeline. Previously, the utility moved gas on Northern Natural.Thecombined gas, electric and water utility serves about 20,000 innortheast South Dakota.

Tenaska Marketing is among the 25 largest gas trading firms inNorth America. It and affiliate Tenaska Marketing Canada providegas marketing, financial services, transportation, storage andother services in the central corridor of North America from Canadato southern Texas. The U.S. and Canadian marketing operations areowned in equal partnership by Tenaska Marketing Inc., an affiliateof Tenaska Inc., and Illinova Energy Partners, a subsidiary ofIllinova Corp. Tenaska Marketing is the managing partner.

Texaco said it will discontinue appraisal drilling of the Fujiand adjacent McKinley prospects in the Gulf of Mexico. “Althoughseveral wells have logged significant pay sections in bothprospects and have tested at potentially commercial rates, the sizeof the accumulations does not warrant future Texaco investment,”said Bruce Appelbaum, Texaco Exploration president. Texaco willrecord a fourth-quarter after-tax charge of $62 million to writeoff its investment in the areas. Fuji is 150 miles southwest of NewOrleans. McKinley is immediately northwest of Fuji. Texaco is stillfocused on the Gulf and holds more than 400 deep-water leases andrecently began deep-water production at the Gemini Field. ThePetronius Field will add additional deep-water production when itenters production in the second half of 2000.

Avid Oil & Gas, a recently-formed, Alberta-based productioncompany, announced its plans to purchase Big Bead Exploration Ltd.yesterday in a stock transaction valued at C$6.3 million. Avid’sboard of directors said the move will provide 1.5 MMcf/d of longlife gas reserves and increase its undeveloped land position.Jeffery Tonken, Big Bear’s CEO said the move was the best optionfor shareholders, as other potential moves ran the risk of beingdilutive. Under the terms of the agreement Avid will acquire thecompany at a stock swap ratio of 1 common share of Avid for every15 common shares of Big Bear. After the merger is completed, Avidsaid all Big Bear employees and directors will resign, but some ofthem have agreed to stay on as Avid employees.

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