Unocal said last week that its expected earnings be aboutbetween 90-95 cents per share, or about 20-25 cents more than itsprior estimates and 11 cents more than First Call/ThomsonFinancial’s consensus estimate of 79 cents. The updated earningsestimate can be attributed to rising natural gas and oil prices,the company said. The new estimate took into account the expectedaverage price for West Texas Intermediate (WTI) crude oil of $31.60per barrel and a Henry Hub natural gas price of $4.35 per Mcf. TheJuly 27 forecast was based on a WTI price of $29.75 per barrel anda Henry Hub price of $4.00 per Mcf. Unocal said the latest estimatedoes not include “miscellaneous special items,” such as an expected$36 million aftertax charge for what it called a derivativesaccrual. Last year Unocal posted earnings of 17 cents per share forthe third quarter.

In the good news department: Chevron Canada Resources said thatits reported natural gas production volumes from its Fort LiardK-29 well in the southwestern part of the Northwest Territories areabout 25 MMcf/d more than it had estimated. Chevron determined lastweek that the well actually was producing gas at 85 MMcf/d betweenSept. 9 and Oct. 3, not 60 MMcf/d as it had reported during themonth of September, attributing the erroneous data to a flowcalculation error involving the amount of water produced inconjunction with the gas. It said it was investigating ways toensure it does not happen again. Chevron holds a 43% stake in thewell and is the operator. Partners include Purcell Energy Ltd.,Berkley Petroleum Corp., Anderson Exploration Ltd. and ParamountResources Ltd. The well is in an area that has been called one ofCanada’s largest onshore gas discoveries. The news could not comeat a better time for Purcell, which holds a 24% stake in theproject. Two weeks ago, shares of the Canadian company were stoppedafter falling for several days. Purcell management said at the timethat the well was pumping more water than expected but called thesituation manageable. “We thought it was doing the speed of aVolkswagen and actually we had a Lamborghini,” said Purcell’s COOBruce Murray.

Deaths related to pipeline ruptures and/or explosions rose byeight to 26 last year, said a new National Transportation SafetyBoard (NTSB) report, which noted that most of the fatalitiesoccurred on pipelines carrying natural gas. Natural gas pipelinesaccounted for 22 of the 26 pipeline-related deaths in 1999,according to preliminary figures in the NTSB report that was issuedlast week. This compares to 17 deaths from gas pipelines in 1998.Fatalities on hazardous liquid pipelines also rose in 1999 – fromone to four. Overall, however, pipelines accounted for a merefraction of the 43,986 persons that were killed intransportation-related accidents in 1999. In comparison, highwayaccidents were responsible for 41,611 deaths last year;roadway/railway crossing mishaps, 402 deaths; rail accidents, 805deaths; marine accidents, 853 deaths; and aviation mishaps, 691deaths.

True Quote announced an alliance with Cap Gemini Ernst &Young to provide customers with information technology consulting,as well as system and business integration services. In addition,the companies intend to license truequote.com’s advanced tradingplatform to the global marketplace, including turnkey solutions forother exchanges desiring real-time bid-ask systems. These serviceswill be provided to clients under the “TQ Trade Solutions” brandname. “This alliance will expedite the deployment of integratedsolutions beyond the box, allowing us to provide powerful and cost-effective products to our customers,” said True Quote President andCEO Dennis Crum. True Quote develops and operates independentelectronic energy trading platforms and portals. These systemsprovide virtual trading communities for market participants tocommunicate and transact in an efficient, real-time environment.The truequote.com application architecture is devoted to anopen-access, broker-assisted model that allows equal access to allqualified market participants. Currently, PG&E National EnergyGroup, APB Energy, Inc., Cap Gemini Ernst & Young, EnFORMTechnology LLC and Microsoft Corp. are the principal companiesworking together to develop and promote truequote.com. Thetechnology has been developed using the latest distributedapplication design and development principles, as outlined inMicrosoft’s Distributed Internet Application Architecture (WindowsDNA). For more information visit the company’s website atwww.truequote.com or call Lee Ann Zoeller at (800) 327-1499.

Allegheny Power and PJM Interconnection signed an agreement todevelop a new electric transmission system affiliation that isdesigned to expand the Mid-Atlantic energy market. It will lead toa new area in the PJM market known as PJM West. The terms of theagreement will be filed Oct. 16 with FERC. Through the affiliation,PJM will expand its regional scope and demonstrate the ability ofits energy market and congestion management systems to functionover multiple control areas. Allegheny Power will satisfy theFERC’s independence requirement for its transmission systemoperations while continuing to pursue the development of a large,regional, independent transmission entity. The arrangement will forthe first time expand the PJM system management concepts beyond asingle control area with the potential to result in a significantlylarger energy market. The timeline set out in the agreementincludes negotiation for a definitive contract to be completed byFebruary and implementation by Dec. 15, 2001. Under the PJM Westconcept, an office would be created and staffed and the PJM WestTransmission Owners would transfer monitoring and functionalcontrol of their transmission systems to PJM. Allegheny Powerdelivers energy to three million people in Maryland, Ohio,Pennsylvania, Virginia, and West Virginia. PJM is an independentsystem operator, administering almost eight percent of thecountry’s electric power, with a pooled generating capacity of morethan 58,000 MW and a membership of more than 190.

Coastal Corp. announced that Engage Energy U.S., L.P. haschanged its name to Coastal Merchant Energy, L.P., which coincideswith the split of the Engage Energy joint venture by participantsCoastal and Westcoast Energy. Effective on Oct. 3, the operationswere divided into separate entities which are owned and operatedsolely by each company. Coastal Merchant Energy, which handles upto 3.5 Bcf/d, appointed James C. Dyer IV as president and CEO.”Coastal Merchant Energy, L.P. will continue to provide a fullspectrum of energy services, including natural gas marketing andtrading, electricity trading and sales, energy management services,structured storage and transportation-related services, structuredpower and management services, and energy risk managementservices,” said David A. Arledge, CEO of The Coastal Corp. “We willundoubtedly benefit from the further integration of our merchantactivities with Coastal’s asset-based businesses.”

Tulsa, OK,-based Home-Stake Oil & Gas Co. and Cortez Oil& Gas headquartered in Plano, TX, announced they have enteredinto a definitive merger agreement in which Cortez will purchaseall of Home-Stake’s outstanding shares from its shareholders for$11.00 per share. The two exploration and production companies willbecome one pending approval by Home-Stake shareholders, and othercustomary closing conditions. Both sets of directors have alreadyapproved the action, and the companies expect to have the dealclosed by the end of the year. Home-Stake Oil & Gas was foundedin 1917.

Constellation Power Source said it plans to build an 800 MW,combined-cycle power plant in Seguin, TX, located between SanAntonio and Austin. Commercial operation of the Rio Nogales PowerProject is slated to begin in June 2002. Rio Nogales is the fourthpower plant Constellation has announced it will build this year asthe company continues to seek opportunities to meet customer demandin national wholesale power markets. Constellation Power SourcePresident Charles W. Shivery noted the Austin-San Marcos-SanAntonio region of Texas is one of the fastest growing areas in theU.S. The $340 million plant will feature a combined-cycle facilitywith three natural gas turbines. Site clearing began for the RioNogales project in July 2000.

Hoping to benefit in both efficiency and cost savings, CompaqComputer Corp. inked an agreement with Enron Corp.’s Enron EnergyServices, a deal in which Enron will manage the electricity,natural gas and energy-related management services for Compaq’sfacilities in Texas, California and Massachusetts. Financialdetails for the five-year agreement were not disclosed. The dealbetween the two Houston-based corporations adds to the growing listof energy service management contracts Enron has inked during thepast few years, which has ramped up this year. In early September,Enron Energy Services secured a 10-year $1 billion energymanagement service agreement with Starwood Hotels and ResortsWorldwide. The energy services arm of the marketing giant remainson track to reach its goal of $16 billion in agreements this year,nearly double 1999’s total of $8.5 billion. That’s up from $3.8billion in energy agreements in 1998.

FuelCell Energy, Inc. announced yesterday that it has formed analliance with Enron North America. The companies plan to worktogether to develop and market FuelCell Energy’s Direct FuelCellproducts, focusing on state renewable and energy conservationprograms. “Targeting state-sponsored renewable programs and energyconservation opportunities will accelerate the commercialization ofour Direct FuelCell products in these ‘early adopter’ markets,”said FuelCell Energy CEO Jerry Leitman. In connection with thedeal, Enron has purchased $5 million in FuelCell Energy commonstock and has the option to purchase up to 1.3 million more shares.Terms of the additional purchases have been negotiated between thecompanies and are contingent upon the sales of 55 MW of powergeneration utilizing FuelCell Energy products. “This transactionenables us to reach the developing markets for clean energy andrenewable energy, which may be served through distributedgeneration products, such as fuel cells and other emergingtechnologies,” said Dave Delainey, president and chief executiveofficer for Enron North America. Danbury, CT-based FuelCell,formerly Energy Research Corp., has developed a technology thateliminates external fuel processing to extract hydrogen from ahydrocarbon fuel. This results in a product whose cost, combinedwith high efficiency, simplicity and reliability, results inproduct advantages for stationary power generation. The company hasdeveloped Direct FuelCell power plants with nominal ratings of 300kW, 1.5 MW and 3 MW.

Southern Company and subsidiary Southern Energy Inc. announcedgross proceeds of $1.81 billion from the initial public offering ofSouthern Energy common stock and a concurrent securities offeringyesterday. Southern Energy sold at $22 per share 66.7 millionshares of common stock, which included 8.7 million shares soldafter underwriters exercised an overallotment option. The grossproceeds to Southern Energy from the IPO were $1.467 billion. The66.7 million shares of common stock represent 19.7% of the 338.7million shares outstanding. Southern Energy also sold at $50 persecurity 6.9 million shares of convertible trust preferredsecurities, including 900,000 securities sold after underwritersexercised an overallotment option. The convertible trust preferredsecurities were priced to yield 6.25% with a conversion price of$27.50 per share. The gross proceeds to Southern Energy from theoffering of the convertible trust preferred securities were $345million.

Devon Energy said it has brought about 51 MMcf/d of new gasproduction on stream from two new wells on Eugene Island Block 156offshore Louisiana in about 82 feet of water. Devon is the operatorand has a 100% working interest. The wells were drilled in thesecond quarter and construction of a production platform andfacilities was completed in August. Both wells are producing fromabout q 100-foot interval near 14,000 feet deep.

Constellation Power Source said it plans to build an 800 MW,combined-cycle power plant in Seguin, TX, located between SanAntonio and Austin. Commercial operation of the Rio Nogales PowerProject is slated to begin in June 2002. Rio Nogales is the fourthpower plant Constellation has announced it will build this year asthe company continues to seek opportunities to meet customer demandin national wholesale power markets. Constellation Power SourcePresident Charles W. Shivery noted the Austin-San Marcos-SanAntonio region of Texas is one of the fastest growing areas in theU.S. The $340 million plant will feature a combined-cycle facilitywith three natural gas turbines. The exhaust heat generated by theturbines will be captured and used to make steam to power a fourthunit, a single steam turbine. Site clearing began for the RioNogales project in July 2000, and multiple water supply sources forthe plant are now being secured. The 30-acre site includes existingtransmission lines that serve the San Antonio and Austin regionalmarkets, the Dallas market to the north, and Houston and CorpusChristi markets to the east and south. The plant will also be ableto serve the Lower Colorado River Authority’s service area.

Conoco Inc. has agreed to use Planalytics’ Weathernomics GasBuyer, an Internet-based tool for natural gas buyers and sellersthat suggests ways to reduce risk and exploit opportunities fromweather-driven changes in gas prices. According to Planalytics, thetool does not forecast gas prices, but rather predicts the turningpoints and direction of gas price changes by combining long-rangeweather intelligence, American Gas Association inventory changeforecasts, real-time Nymex futures contract pricing and proprietarytechnology. “The gas markets have been extremely volatile thisyear, and this is a tool that promises to help us see more clearlyinto the future direction of gas prices,” said Jim Duncan, whomanages gas market analysis for Conoco Gas and Power Marketing.From January to October 2000, the average year-to-date cost to buynatural gas at the month-end settlement price was $4.10 MMBtu. Overthe same period, Planalytics estimates that the average cost usingthe Weathernomics tool was $3.41 MMBtu. Wayne, PA-based Planalyticsnow serves more than 120 corporate clients, including DowHydrocarbons and Resources, Cargill and Monsanto. Conoco is itsfirst major energy client.

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