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Industry Briefs

Industry Briefs

The New Power Co. (TNPC), the first nationally branded provider of electricity and natural gas to residential and small commercial customers in the United States, reported yesterday that its revenues derived from the sale and delivery of the commodities to retail customers during the third quarter for 2000 was $18.2 million. Gross profit for the new company was $1.3 million (7.2% of revenues). The net loss for the quarter was $69.9 million, or $2.96 per basic share, based on 23,581097 weighted average common shares outstanding. "This was a quarter of important progress for The New Power Company, as we achieved both our overall financial performance targets and business objectives," commented H. Eugene Lockhart, CEO. "Additionally, the successful completion of our IPO just after the close of the quarter enabled us to raise $546 million, firmly positioning New Power as the first mover in establishing a national brand to address the $150 billion deregulating electric and natural gas marketplace for residential and small commercial customers." The company hopes to achieve revenues of $60 to $63 million for the fourth quarter, with a year-end customer count in the area of 340,000.

UtiliCorp reported that its earnings available for common shares for the third quarter were $74.9 million, reflecting contributions from Aquila Energy and international businesses. Earnings available for common shares a year ago for the third quarter were $42.5 million. Sales for the quarter were $8.1 billion, up 25% from $6.5 billion a year earlier. UtiliCorp said this quarter set an all-time record for sales, earnings before interest and taxes, net income and earnings per share. UtiliCorp's earnings before interest and taxes for the third quarter were $162.9 million, up 42% from $114.6 million a year earlier.

PG&E Corp.'s National Energy Group (NEG) filed an application with the Oregon Office of Energy to build a new electricity generating facility adjacent to the company's existing power plant in Umatilla County. The 550 MW natural gas-fired plant is slated to be operational in time to help meet the Northwest Power Planning Council's (NPPC) forecasted deadline of 2003. At that time, the council expects the region will need an additional 3000 MW to maintain reliability. The proposed Umatilla plant is expected to generate enough electricity to supply 550,000 homes. The plant is expected to be built adjacent to the 474 MW Hermiston plant which NEG co-owns with PacifiCorp. to maximize efficiencies. The Umatilla plant will receive its natural gas fuel supply via NEG's Pacific Northwest pipeline system.

With natural gas costs expected to be higher in the next few months, Naperville, IL-based Nicor Gas has announced a new Customer Payment Support Plan, which will enable its 1.9 million customers who fall behind in their bills to spread monthly payments into smaller amounts through the summer. If a customer receives a bill in January or February and cannot make the total payment, the customer contacts Nicor, which will then estimate costs in future months and arrange a payment plan to spread the amount in regular increments over warmer months. Fixed monthly payments would continue until Sept. 2001. The plan joins two other programs, including the Low Income Home Energy Assistance Program administered by the Illinois Department of Commerce and Community Affairs, and Sharing, an assistance program administered by the Salvation Army and funded by Nicor. For information about the programs, call (888) 642-6748.

The New York Mercantile Exchange announced a target date of Nov. 15 for its demutualization, which will make it the first exchange in New York to convert from not-for-profit membership structure to a for-profit structure. Pending certain legal notifications by November 15, the Exchange, a not-for-profit membership corporation under New York law, will be reorganized on that date as a for-profit membership corporation under Delaware law and will be renamed New York Mercantile Exchange, Inc. A new stock-holding company named NYMEX Holdings, Inc., will be formed to own all of the economic interests and most of the voting control in the for-profit membership corporation. Each existing NYMEX Division membership will be converted into one share of common stock in NYMEX Holdings, representing equity in the overall organization, and one membership in the exchange representing trading privileges. The common stock and trading privileges will not be separable until a majority of stockholders vote to permit separate trading of the common stock and trading rights. The exchange is the largest physical commodity exchange in the world. On average, $14 billion worth of transactions occur on the exchange on a daily basis, with $3.3 trillion changing hands last year.

Pennaco Energy announced that it has posted record net income of $3.6 million ($0.17 per share) for the third quarter 2000, compared to last year's third quarter net loss of one million dollars ($0.07 per share). The coal-bed methane E&P company which holds approximately 400,000 net acres in the Powder River Basin of Wyoming and Montana had net gas sales of 47 Bcf or 51 MMcf/d. The net gas sales represent a 13% increase over the company's second quarter figure, and over six times its sales for the third quarter of 1999.

Bangor Gas said it has started deliveries to Bucksport Energy LLC located at International Paper's paper mill in Bucksport, ME. Under a 15-year contract with Hydro Quebec Energy Services, Bangor Gas will deliver 48 MMcf/d of gas to the new 174 MW cogen, which will produce power and steam for the mill. The plant is a joint venture between International Paper and Hydro Quebec. With the main lateral to serve the plant now in place, Bangor Gas said it will focus on developing a distribution system to serve residential and commercial customers in Bucksport

Avista-STEAG LLC and NRG Energy Inc. have formed a partnership to build, operate and manage a 633 MW natural gas fired merchant plant in Fort Bend County, outside of Houston. Avista-STEAG will retain 51% ownership in the Brazos Valley project, with NRG owning 49%. Construction will begin in early 2001, with commercial operation expected in January 2003. STEAG is Germany's leading independent power producer. Avista is headquartered in Spokane, WA and NRG is headquartered in Minneapolis.

EnerMark Income Fund has announced a friendly takeover of Cabre Exploration Ltd. of Calgary under which EnerMark will make an offer of 3.25 trust units and one warrant to purchase an EnerMark trust unit until Dec. 15, 2001 at a price of $4.71 per unit per common share of Cabre. The offer, which has the support of both boards, does not include a value for the Vanguard shares, which are to be distributed to Cabre shareholders before closing. The offer presents a 33.7% premium over the closing price Nov. 3 of Cabre of $11.60, and the aggregate value of the offer is $350 million. J. Douglas Kay, Cabre's CEO, said the deal will enhance shareholder value, and Cabre's "extensive exploratory assets can be readily monetized with third parties seeking farm-in opportunities."

Gulf Canada Resources Ltd. has agreed to purchase all of the outstanding common shares and associated rights of Crestar Energy for approximately $177 million in cash and 181 million ordinary shares of gulf. More than 90% of the Crestar shares have been tendered, and Gulf will also exercise its statutory rights to purchase the remaining shares. The deal was first announced in October. Dick Auchinleck, CEO of Gulf, said the acquisition will give the company a "balanced portfolio of assets and a substantial presence in North America's gas markets, where our gas production more than doubles." He said the move also will provide cash flow to fund the development of prospects at Surmont, the Mackenzie Delta, offshore Eastern Canada and overseas. When the merger is completed, the combined entity will produce 288,000 boe/d in 2001, before anticipated asset sales of up to 20,000 boe/d. Combined proved oil reserves would be 586 million barrels and gas reserves would total 3.3 Tcf.

FirstEnergy Services has signed a long-term energy service and supply agreement with National City Corp. for facilities in Ohio, Pennsylvania, Kentucky, Indiana, Illinois and Michigan. The company will serve as National City's energy manager, helping it secure competitive prices for electricity, natural gas and energy-efficiency projects for 1,300 bank branches, operations centers and other locations. FirstEnergy Services also will provide automated billing and other energy-related, Internet-based communication services for the Cleveland, OH-based financial services firm. National City relied on the consulting services of The Studebaker Group, Inc., to assist in the evaluation of potential energy suppliers.

Amerada Hess, based in New York City, plans to issue approximately 17.1 million common shares of its stock, pay nearly $2.4 billion in cash and assume $1.6 billion in gross debt to buy United Kingdom energy corporation Lasmo. Lasmo's board still has to approve the acquisition, along with 90% of the company's shareholders. Once done, the Lasmo shareholders would receive about 98 British pounds and one Hess common share for every 78.9 Lasmo shares. Hess officials said the deal would boost its move into international exploration and production, especially adding to its oil reserves. The combined company would raise Hess' daily production to 582,000 barrels of oil a day in 2001 from its current 374,000.

Fort Worth, TX-based Quicksilver Resources reported that its third quarter earnings set a company best record with net income rising 372%. Net income was $4.8 million ($0.26 per share) compared to $1 million ($0.08 per share) during the third quarter 1999. The company accredited the breakout quarter to higher prices and increased volume production and sales of natural gas and oil. The company's net natural gas sales went from $10.4 million for 3Q 1999 to $20.3 million for 3Q2000, a 96% increase. Gas production volumes also jumped 65% between the two time periods to end up at 7 Bcf in the third quarter of this year. Gas prices on average increased about 19%. Natural gas liquids (NGL) followed in tandem, growing to $957,000 with volumes growing 175% and prices by 213% when compared to the same time period last year. Oil sales enjoyed similar leaps, growing 112% to $6.8 million over last year's $3.2 million figure. Crude production also rose 41% higher to finish at 305 bbls. The average crude oil price grew approximately 50%.

Range Resources Corp., another Fort Worth, TX-based producer, reported its third quarter net income was significantly lower than last year for the same time period due primarily to hedging. The company posted a net income of $7.8 million for the third quarter 2000, a drop from its 3Q 1999 posting of $13 million. The company's realized price per Mcfe after hedging rose 27% to $2.91. Oil and gas sales rose from $37.5 million for 3Q 1999 to $40.6 million for the same time period this year. However, production fell off from last year for the same time period. Natural gas production dropped from 136 MMcf/d to 114 MMcf/d. Oil production followed the slide, from 5,996 b/d to 5,278 b/d for 3Q 2000. The company attributed the slides primarily to dispositions. Natural gas liquids was the lone bright spot, rising from 971 b/d to 983 b/d. Based on the company's hedges and current futures prices, Range estimates that its realized price in the fourth quarter will rise by over $1.00 per Mcfe, adding more than $14 million to net income and cash flow.

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