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
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.