Conoco: The Houston-based top five major said that weaker worldwide crude oil and North American natural gas prices resulted in lower earnings for the third quarter. Net income before special items totaled $404 million, or 64 cents per diluted share, 23% below last year’s record third quarter of $523 million, or 83 cents per share. Revenue for the quarter amounted to $9.7 billion, down 9% from $10.7 billion last year on lower prices for refined products, crude oil and natural gas. For the first nine months, net income before special items totaled a record $1.6 billion, or $2.56 per share, up 18% versus $1.4 billion, or $2.17 per share, earned last year. Revenue for the first three quarters exceeded $30.7 billion, up 6% from $28.9 billion last year. Special items during the quarter totaled $147 million, or 24 cents per share,attributed mostly with its Gulf Canada acquisition and related actions to reduce debt (see Daily GPI, May 30). These included a net charge of $44 million for assets sold or held for sale; a $24 million premium paid for the early retirement of Gulf Canada debt; and a $38 million currency loss. Additionally, a $41 million charge resulted from an adverse ruling on a patent dispute. Including special items, net income totaled $257 million, or 40 cents per share, down from $497 million, or 79 cents per share, earned during the same period last year. Year-to-date net income was $1.5 billion, up 8% from $1.4 billion in 2000. For complete financial details, visit the web site at www.conoco.com.

USX-Marathon Group: This Pittsburgh-based major’s earnings were down in the third quarter, reporting net income adjusted for special items of $319 million, or $1.03 per diluted share, compared with net income adjusted for special items of $356 million, or $1.14 per diluted share, in the third quarter of 2000. The Marathon Group recorded third quarter 2001 net income of $193 million, or $0.62 per diluted share, which included a $126 million after-tax loss primarily related to the complete sale of Marathon’s heavy oil assets in Canada. This sale is part of a strategic realignment to focus on Canadian gas assets. Net income in the third quarter of 2000 was $121 million, or 38 cents per diluted share, which included a $235 million one-time, non-cash deferred tax charge. Marathon Group revenues were $8.3 billion in third quarter 2001 compared to $9.2 billion in third quarter 2000. Income for Marathon’s reportable segments was $840 million in third quarter 2001 versus $776 million in third quarter 2000. Domestic upstream income was $210 million in third quarter 2001 compared to $305 million in third quarter 2000. Fourth quarter production is expected to be approximately 415-420 Mboe/d, while full-year 2001 production is expected to be approximately 420 Mboe/d. For 2002, Marathon’s production is expected to average between 430-435 Mboe/d. Complete third quarter financials are available on the web site at www.marathon.com or www.usx.com.

El Paso Energy Partners LP: This Houston-based publicly owned master limited partnership reported record cash flow, as measured by adjusted earnings before interest, depreciation, and taxes (adjusted EBITDA), of $39.7 million for the third quarter, up 63% from $24.4 million in the third quarter of 2000. The improvement, said EPN, was driven by the first contribution from the Prince Platform, which began generating revenues in September, as well as significant contributions from its natural gas liquids (NGL) transportation and fractionation assets and Crystal Gas Storage, which were acquired from El Paso Corp. in March 2001 and September 2000, respectively. By segment, Natural Gas Gathering and Transportation adjusted EBITDA was $14.2 million for the third quarter of 2001, up 17% from $12.1 million in the 2000 quarter, reflecting a 6% increase in volumes and higher distributions from Deepwater Holdings. Liquid Transportation and Handling adjusted EBITDA was $13.3 million, more than double the $6.5 million reported in 2000. The increase reflects EPN Texas’ NGL operations, which were acquired by the partnership in the first quarter of 2001. Segment volumes increased 24% to 235,000 bbl/d, due to higher NGL asset volumes, offset by lower oil transportation volumes. Storage Services adjusted EBITDA was $3.5 million for the third quarter of 2001 compared with $0.9 million in 2000, reflecting a full quarter of operations in 2001. Oil and Natural Gas Production adjusted EBITDA was $0.8 million compared with $3.4 million in the 2000 quarter. The decrease was attributable to lower oil and natural gas production volumes. Complete financial details and operating statistics are available on the web site at www.elpasopartners.com.

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