Alaska’s North Slope area-wide 2000 lease sale has been put onhold due to the pending merger of BP Amoco and Atlantic RichfieldCo. (ARCO). Alaska Department of Natural Resources CommissionerJohn Shively said, “[T]here are too many uncertainties in futureleaseholdings to proceed with a sale at this time. Until theiraggregate onshore holdings have been reduced to 500,000 acres, asrequired by Alaska law, I believe it will be difficult forprospective bidders to properly evaluate oil and gas opportunitieson the lands we can offer. “Should the merger be finalized by theend of the year, BP-Amoco must make their seismic and well dataavailable for purchase by the end of March. These data shouldincrease the interest in state lease sales. We are tentativelyrescheduling the North Slope sale for late October or earlyNovember of 2000, at which time we intend to include with it thepostponed Beaufort Sea area-wide sale.” The North Slope saleincludes all available state acreage lying north of the UmiatMeridian, between the NPRA and ANWR.

Primary Energy, the NiSource subsidiary dedicated to investingin and managing projects that optimize energy productivity whilereducing operating cost, announced two different cogenerationprojects last week. In total, Primary Energy has initiated sevenpower plant projects over the past two years. In the first deal,Primary Energy, along with BP Amoco, selected Duke/FluorDaniel toprovide turnkey engineering, procurement and construction servicesfor a 525 MW, gas-fired cogeneration facility at BP Amoco’s WhitingRefinery in Indiana. Construction of the $250 million plant beganthis year, with completion planned for the second quarter of 2001.In the second deal, Primary Energy announced an agreement with LTVSteel Co. to develop, engineer and construct a blast furnacegas-fired cogeneration facility at LTV’s East Chicago plant. Theproject cost is estimated at $60 million and is scheduled forconstruction in the spring of 2000, with completion in late 2001.The plant, to be built at LTV’s Indiana Harbor Works, will generate50 MW primarily from by-product fuels, but also will utilize somenatural gas.

Indiana Energy Inc. said last week that a special meeting ofcommon shareholders would be held on Dec. 17 at its headquarters inIndianapolis to consider the previously announced merger withSIGCORP. The merger would create a new $1.9 billion holding companycalled Vectren, which would serve gas and electricity to more than650,000 customers in adjoining areas that cover nearly two-thirdsof Indiana. Vectren’s non-regulated subsidiaries will offerenergy-related products and services, including marketing,performance contracting, coal mining, telecommunications, meterreading, and materials management. Under the merger agreement,Indiana Energy shareholders will receive one share of Vectren’scommon stock for each share of Indiana Energy stock. SIGCORPshareholders will receive 1.333 shares of Vectren’s common stockfor each share of SIGCORP stock.

Shell Exploration & Production said during a shutdown of awell last week it detected a pressure buildup in the productioncasing at its Alex gas development, located on Brazos Block A-19 inthe Western Gulf of Mexico, about 75 miles south, southwest ofGalveston, TX. The well remained shut-in and secure while Shellinvestigated the situation. Shell has received permission from theMinerals Management Service to temporarily resume flow from thewell, which is expected to bring the pressure down to normal.Pumping equipment has been deployed to the site and was expected toarrive over the weekend. Plans were to shut down the well and pumpfluids to further stabilize the pressure between the tubing stringand the outer casings. Diagnostic work to determine the cause ofthe pressure buildup and to develop plans to permanently resolvethe situation is expected to continue. Prior to shut-in, Alex wasproducing about 84 MMcf/d since its startup on Oct. 16.

ANR Pipeline signed agreements with Wisconsin Public ServiceCorp. (WPSC) that will result in the extension to 2010 of firmnatural gas transportation and storage service agreements that werescheduled to expire over the next three years. “These contractextensions reinforce the strong relationship that Wisconsin PublicService and ANR have shared for many years,” said Jeffrey A.Connelly, president and CEO of ANR and senior vice president,natural gas, of parent Coastal Corp. “Wisconsin Public Service isconfident these contracts will continue to provide our customerswith reliable natural gas service at competitive rates into thenext millennium,” said Patrick D. Schrickel, president and chiefoperating officer of Wisconsin Public Service Corporation. Theagreements are subject to regulatory approvals. WPSC is acombination gas and electric utility serving about 225,000 gascustomers and 380,000 electric customers in Wisconsin and upperMichigan.

Columbia Energy Group said its Columbia Energy Services (CES)unit is close to completing an evaluation of offers for itswholesale and energy trading operations, but the bids came in muchlower than expected – $13 million (16 cents/share) lower to beexact. Columbia said it was forced to more than double the net lossfrom discontinued operations in its third quarter earnings to $23.5million from the $10.5 million reported late last month. It’srevised third quarter earnings show a $22.7 million net loss($0.28/share) including discontinued operations. It previously hadreported only a $9.7 million net loss ($0.12/share). The sale stillis expected to occur before the end of the first quarter of 2000,the company said.

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