Producers are in for a very profitable year if recent thirdquarter earnings reports are any indication. Occidental Petroleumreported a three-fold increase in third quarter earnings comparedto the same period last year, going from $126 million ($0.35 pershare) in 3Q99 to $402 million ($1.09 per share) in 3Q2000. Thesuccessful performance is mainly the result of higher commodityprices. Oxy’s earnings before special items for the third quarterwere $370 million ($1.00 per share) as opposed to last year for thesame time period when the company posted $125 million ($.35 ashare). Oxy’s oil and gas division earned $690 million beforespecial items, compared to $279 million in 3Q99. Although commoditycosts played a large part in the increase, the company also citedan increase in production volumes due to its acquisition of AlturaEnergy from Shell Exploration & Production Co. and BP duringthe second quarter of 2000. Its domestic gas production levels rosefrom 673 MMcf/d during 3Q99 to 687MMcf/d for 3Q2000, while domesticliquids (mostly crude) rose from 71,000 b/d to 210,000 b/d.

Dominion Resources expects gas price strength to continuethrough next year, but it is making a conservative forecast forrealized prices of about $3.20/Mcf, CEO Thos. E. Capps said duringa conference call on the company’s third quarter earnings. Thecompany’s production remains about 50% hedged through the secondquarter of next year. Financial results from Consolidated NaturalGas’ (CNG) production and gas pipelines, which were added inJanuary, partially offset the weather-related trouble encounteredby the company’s electric utility division during the quarter. Thecompany reported a smaller than expected decline in earnings pershare during the third quarter, posting $1.13 compared to$1.32/share in 3Q99. Results per share were pulled down as averageshares outstanding surged to 239.5 million from 191.4 millionbecause of the merger. Operating earnings excluding special itemsactually rose to $270 million from $253 million. Revenues soared to$2.4 billion compared to $1.7 billion last year during the samequarter. Analysts surveyed by First Call/Thomson Financial expectedthe company to earn $1.10 per share in the latest quarter and $3.30in the full year. Capps said the company is “solidly positioned tomeet or exceed our full-year 2000 earnings target of $3.30 pershare and our 2001 target of $3.80 per share.” In an unrelatedannouncement, Dominion said it launched a new Internet site forenergy professionals that offers a variety of energy news,information and services. The new site, www.domenergypro.com,offers those involved in buying, selling or trading energy a singlesource for energy news and information. It also offers informationon Dominion’s energy-analysis, management and monitoring servicesand its retail energy sales and service options.

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