Dynegy Inc. hopes to redeem itself with a conference call Tuesday to discuss its latest Securities and Exchange Commission filings, which include Form 10-Q on third quarter earnings, as well as Form 8-K, an unaudited restatement of financials from January 1999 through December 2001.

The company’s management has been chastised by analysts in recent weeks for failing to talk via a conference call and enlighten them about its third quarter ’02 earnings, its changed relationship with ChevronTexaco or its newly named president and CEO Bruce Williamson (see NGI, Nov. 4; Oct. 28).

Analysts and investors also should hear more encouraging news about Dynegy’s liquidity status, after it completed the sale last week for the rest of its UK natural gas assets, which returned $500 million.

Williamson, who certified the latest financial reports with CAO Mike Mott, said that the financial information, which in part recalculates changes related to Project Alpha, a questionable natural gas marketing deal used to lower taxes, will give the marketplace the “best available information” on Dynegy. “This is part of our commitment to provide open communications to all stakeholders as we move Dynegy forward with its refocused business plan,” said Williamson.

The 8-K is intended to reflect all of the company’s known adjustments that in management’s opinion, “are necessary for a fair presentation of Dynegy’s financial statements,” and include restatements relating to Project Alpha and its natural gas marketing business. Special adjustments in the 8-K include the following:

Dynegy expects to file an amended Form 10-K reflecting the unaudited restatements described in the Form 8-K as soon as possible and before the completion of an ongoing re-audit. PricewaterhouseCoopers LLP (PWC) is continuing with its ongoing re-audit of financial statements, which is expected early in the first quarter of 2003.

However, Dynegy warned in the filings that “further amendments of the Form 10-K will be necessary in order to include the audit report of PWC, as well as to reflect other changes resulting from the re-audit, if any. Additional adjustments may also be required to Dynegy’s 2002 quarterly financial statements following PWC’s subsequent review of these financial statements, which is expected to be performed following completion of the re-audit.”

The sale, which includes the Rough storage facility, leaves Dynegy’s overseas operations consisting of just the remnants of its energy marketing and trading operation, which is expected to be closed within six months.

Part of the deal with Centrica included Dynegy’s natural gas processing terminal, Easington, which is located on the East Yorkshire coast. ABN AMRO acted as Dynegy’s financial adviser.

Mike Flinn, currently president of Dynegy Europe, will manage the shutdown of European energy trading. In September, Dynegy sold UK-based Dynegy Hornsea to SSE Energy Supply Ltd., a unit of Scottish and Southern Energy plc, for $200 million (see NGI, Oct 7).

Rough is the largest storage provider in the United Kingdom, used by about half of the natural gas shippers in the country. It has a deliverability rate of 1.5 Bcf/d and a total customer storage capacity of 100 Bcf of gas. The Easington terminal processes Rough and third-party natural gas streams for delivery into the UK gas transportation network. Centrica plans to hire nearly all of the former Dynegy Storage employees.

“The storage business sale is yet another significant accomplishment in our capital plan, which continues to improve our liquidity and enable us to focus on our core businesses going forward,” said Dynegy CEO Bruce Williamson. “When combined with the steps we are taking to restructure the organization and address the company’s financial obligations, we are continuing to build momentum for the new Dynegy and drive the company forward.”

Dynegy had purchased the UK assets in 2001, buying the lot from BG Storage Ltd. for about $600 million (see Daily GPI, Nov. 29, 2001 ). The deal included 30 wells with five offshore platforms, nine salt caverns, about 19 miles of pipelines and Easington, the onshore processing terminal.

Also, the New York Stock Exchange notified Dynegy on Thursday that the company’s average share price for its Class A common stock has fallen below the price criteria for continued listing.

Dynegy closed at 82 cents on Thursday; the last time it traded at $1 or above was Oct. 3. Under the Exchange’s listing standards, companies typically are given six months following notification to raise their share price and average share price above $1. Dynegy said it would work with the Exchange to “satisfy these criteria to support its continued listing.”

The Dynegy conference call is scheduled for 10 a.m. EST on Tuesday (Nov. 19), which may be accessed at www.dynegy.com.

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