Industry Briefs

Unocal Corp. and its partners reported a major discovery on Wednesday in the Gulf of Mexico at the St. Malo prospect. Potential volumes from the well "give us the confidence to call this discovery a significant milestone in our Gulf of Mexico deep-water program," said Mike Bell, Unocal's vice president for the Deepwater USA unit. The well was drilled to a depth of 29,066 feet (8,859 meters), and it hit more than 450 feet of oil-bearing rock over a 1,400-foot interval, Unocal said. Unocal and its partners spent about $62 million on drilling. The well is in 6,900 feet of water 250 miles southwest of New Orleans. An evaluation of the discovery is planned in early 2004, which will include drilling at least one well, Unocal said. Unocal is the operator and holds a 29% stake. Other stakeholders include Brazilian energy concern Petrobras; Devon Energy Corp.; ChevronTexaco Corp.; EnCana Corp.; Exxon Mobil Corp.; and Eni SpA. Corridor Resources

Wilkes-Barre, PA-based Southern Union said negative seasonal impacts on gas distribution results led to a first quarter net loss of $3.7 million or 5 cents/share for the three-month period ended Sept. 30, but the loss was smaller than the same period a year earlier ($6.5 million or 11 cents/share) because of the benefit of its Panhandle Energy acquisition. "Our first quarter results evidence the strength that the Panhandle acquisition will bring to Southern Union," said COO Thomas F. Karam. "These results reflect only a portion of the integration success achieved to date." The net loss from continuing operations was $3.7 million or 5 cents/share for the first quarter of fiscal 2004 compared with $9.2 million or 16 cents/share. On June 11, Southern Union completed its acquisition of Panhandle Eastern Pipe Line Co. and subsidiaries Trunkline Gas Co., Sea Robin Pipe Line Co., Trunkline LNG Co. and Southwest Gas Storage Co., from CMS Energy. The new assets added net earnings of $20 million or 28 cents per share (including a 5 cents/share gain on the early extinguishment of debt). In addition to now owning more than 10,000 miles of interstate gas pipeline, Southern Union also distributes gas to about one million customers through its local distribution companies, Missouri Gas Energy, PG Energy and New England Gas.

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