Once considered a problem in their oil exploration efforts, the high cost of natural gas is getting another look-see from Empire Energy. The Overland Park, KS-based producer said it would begin selling its natural gas reserves --- which it used to squeeze off --- from the Upper Cumberland Plateau region of north-central Tennessee once a natural gas pipeline is completed there. Coastal Hydrocarbons LLC has begun laying a 4-inch line into the area and is expected to begin accepting gas in two to three months, Empire said. Pryor Oil Co., which holds a 40% interest in an exploration project with 60% partner Empire, is now evaluating and high-grading program leases to determine what wells to put into the natural gas sales line. "Gas has been a hindrance in our exploration and production in that region due to the complexities it presents during drilling," said Bryan S. Ferguson, Empire COO. "Previously, we didn't have a market in which to sell the gas so while we drilled oil wells, we either squeezed the gas off or held it in formation. With gas prices up and the market demand present, we feel fortunate to now be able to put these assets to work for us." Because of the fractured nature of the geology in the region, Empire said it was difficult to estimate the total gas reserves present. However, every well drilled so far has had an "abundant" amount of natural gas.
Utilicorp United's Aquila Energy subsidiary was awarded a five-year contract to supply the power needs of Alcoa's aluminum smelting facility in Badin, NC. Under the contract, Kansas City, MO-based Aquila will provide risk management for both power and the impact of weather on the energy production of Alcoa's generating units. Aquila also will support the plant with the power it needs to operate its smelter 24-hours a day, seven days a week, through the optimizing of Aquila's supply, Alcoa's own generation, and the market. "This agreement provides a stable and consistent power supply for Alcoa's base load energy demand, while effectively mitigating the weather-related variability of its generating capacity," said Tripp Dunman, senior director of Industrial Origination for Aquila.
The nation's first virtual energy utility and subsequently one of its most popular online utilities, Albany, CA-based Utility.com's CEO/founder Chris King confirmed that he is pulling back from three states, California, Pennsylvania and Massachusetts, and reassessing his company's future plans. He refused to provide any more detail at this point, but industry observers speculate that the runaway wholesale gas and electricity prices have devastated the online natural gas and electricity provider that is reportedly giving up 30,000 electricity customers in Pennsylvania. A spokesman for the Pennsylvania Public Utility Commission confirmed it had been notified that Utility.com would be dropping out of that market, but he said the effect on the Pennsylvania choice program would be negligible. Most of the marketers in Pennsylvania offer fixed price programs, but that has not been a problem there since the state, powered mainly by coal and nukes, enjoys relatively stable prices and is a net exporter of power. The PUC spokesman there had been no unusual fall-off among other marketers and the agency had understood the financial problems stemmed from Utility.com's involvement in the California market. The online utility plans to continue in the business of providing software applications for utilities.
Louisiana based-Stone Energy Corp. reported it has completed its merger with Basin Exploration almost three months after the companies signed their initial agreement. Basin stockholders will own 29% of the new company, which will retain the name of Stone Energy and its headquarters in Lafayette. As of Dec. 31, 1999, the combined company's total proved reserves were 597 Bcfe.
Dynegy completed its previously announced acquisition of 1,700 MW of power generation located in the town of Newburgh, NY. Included in the $903 million purchase was the 500 MW Danskammer plant and the 1,200 MW Roseton facility. Late last year, the New York State Public Service Commission (PSC) approved a joint request from Central Hudson Gas and Electric Corp., Consolidated Edison Co. of New York Inc., Niagara Mohawk Power Corp. and Dynegy Power Corp. to transfer ownership of the facilities. Dynegy said it will be able to deliver power to wholesale customers in the New York, PJM and NEPOOL markets
Senate Committee on Energy & Natural Resources Committee Staff Director Andrew D. Lundquist has been appointed by President Bush to the position of director of the National Energy Policy Development Group. Lundquist will work directly with Vice President Dick Cheney, who will chair the energy task force. Lundquist's soon to be vacated position of staff director will be filled by current Deputy Staff Director Brian Malnak.
In a move that will create the largest U.S. retail propane marketer, UGI Corp.'s AmeriGas Propane Inc. announced it would buy the retail propane distribution business of Columbia Energy Group for $208 million. Columbia is owned by NiSource Co. The deal was financed with $163 million of debt and $53 million in AmeriGas shares issued to Columbia. NiSource's Columbia businesses are ranked as the fifth largest U.S. retail propane marketer, selling more than 307 million gallons of fuel a year in 29 states. AmeriGas said the deal would add to earnings in the first fiscal year following closing.
The problem isn't just a shortage of power generation, "California's severely stressed gas infrastructure has been an overlooked factor in the current and likely future crisis," according to Stephen L. Thumb, director of the natural gas practice of Energy Venture Analysis of Arlington, VA. A new report by the group pinpoints high gas prices and infrastructure problems with both natural gas and power transmission lines. "Pipeline explosions and outages only served to make a bad situation even worse throughout the years. Several natural gas pipeline infrastructure projects are on the drawing board, but will not be built in time to alleviate the problem until at least 2002. " Copies of the report, The California Energy Crisis, may be purchased by contacting A. Michael Schaal at 703-276-8900.
Houston-based Altra Energy Technologies Inc. has launched a new corporate brand, which the company said more "closely aligns" it with its established market position. The company said its new tagline, "Market wide, Market deep," reflects the company's focus on complete technology solutions for the energy industry. "At Altra, we have worked hard over the last five years to establish our position in the market," said CEO Paul Bourke. "Now that we have cultivated the 'ultra' market, we have developed a company brand to better communicate our focus." He said the brand positions Altra "exactly where we need to be as we move forward." Altra has renamed its suite of products, formerly known as Altrade, which will now be known as The Altra Energy Market. The suite of products will include the Altra Market Place, Altra Market Tools, Altra Market Solutions and Altra Market Services.
In an effort to pursue options to optimize its business, Tulsa-based Sapient Energy Corp. reported it has retained Randall & Dewey, Inc. to provide transaction advisory services, which include the hosting of the independent oil and gas company's data room opening. Sapient sad the opening will include development and exploration potential of its asset base, along with detailed confidential information pertaining to the company. It expects to have the data room open in late February, with interested parties submitting their proposals by the end of March. "Over the past three years, we have built a solid asset base through the acquisition of producing oil and gas properties in the Mid-Continent, Permian Basin, and Northern Louisiana regions," said Robert R. Anderson, CEO of Sapient Energy. "Our focus on operated, high margin natural gas properties with significant development potential has afforded us the current opportunity to evaluate several strategic alternatives to create additional value for our shareholders." Sapient Energy currently net produces 20 MMcf/d of natural gas and 1,500 b/d of crude. Approximately 90% of the company's 500 wells are operated with almost 75% of its 150 Bcfe of reserves being natural gas. For more information on the Sapient Energy sale check with Randall & Dewey at www.randew.com.
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