Williams is holding an open season to gather market interest in capacity on its proposed Gray’s Harbor Lateral in Thurston County, WA. The lateral, which would extend off of Northwest Pipeline’s mainline near Vail, is being designed primarily to serve a new electric generation plant in the Sarsop Development park near Elma, WA. The first 36 miles of the 48-mile line will parallel Northwest’s existing Olympia and McCleary laterals. So far, the plant operator has signed an agreement for 161,500 Dth/d of firm capacity on the lateral, which is scheduled to be in service in November 2002. Northwest expects to charge its minimum rate plus an estimated surcharge of 29 cents/Dth for the facility cost of service. Williams said it is seeking 15-year contracts. For more information call Patrick Aman at (801) 584-6322. Precedent agreements must be submitted by April 20. Williams said if its anchor shipper backs out of the deal, it will cancel the project and all service agreements will be terminated.
Phillips Petroleum shareholders approved the proposed acquisition of Tosco Corp. during a special meeting yesterday. The acquisition is expected to close by the end of the third quarter, pending additional regulatory reviews and other customary closing conditions. Phillips shareholders also approved amending Phillips’ charter to increase the number of authorized shares of common stock from 500 million to 1 billion. “This paves the way for Phillips to become a premier competitor in the domestic refining, marketing and transportation business, and to realize the competitive advantages of being fully integrated,” said CEO Jim Mulva, who also updated shareholders on the company’s earnings expectations. “We expect first-quarter net operating income to be up 75-85% from the same period last year. The expected increase is due primarily to increased production as a result of the company’s second-quarter 2000 Alaskan acquisition. For the year 2001, we expect to meet or exceed analysts’ consensus earnings estimates.” The company expects total worldwide production to be in the range of 820,000 barrels of oil equivalent (BOE) per day for the quarter, versus 489,000 BOE per day for the first quarter of 2000.
Mirant CEO Marce Fuller reaffirmed the company’s first quarter earnings projection but announced that the company would take a $295 million charge because of unpaid bills from California utilities. As of March 31, the total amount owed to Mirant from the Cal-ISO and the CalPX, and indirectly from the California utilities, was $392 million. Mirant’s first quarter estimate of 46 to 48 cents per share included the assumption that the company would take significant provisions related to the uncertainties in the western U.S. energy markets. “Mirant still expects to meet or exceed its previous guidance for first quarter 2001 and throughout the year,” Fuller said. “The provisions to be taken by the company through the first quarter of 2001, combined with the provisions taken last year, reflect our current assessment of the risks associated with the California market situation.” Separately, Mirant yesterday joined forces with Apex Industrial Park to dedicate and break ground for the company’s 1,100 MW natural gas-fired Apex Generating Station. The plant will be located on 90 acres within the park.
Cross Timbers Oil Co.’s board of directors declared a three-for-two stock split of its common shares subject to stockholder approval at the company’s annual meeting on May 15, 2001. The board also said it intends to maintain the quarterly cash dividend at one cent per share after the stock split, effecting a 50% dividend increase. “This is Cross Timbers’ fourth three-for-two stock split since 1997 — a remarkable achievement,” said CEO Bob R. Simpson. “The board’s decision reflects its confidence that our sustained record performance, exceptional internal growth profile and increasing asset values will continue to fuel outstanding stock performance.” Assuming stockholder approval, each shareholder of record at the close of business on May 23 will receive one extra share for every two shares held.
Precision Drilling Corp. reported on that due to its strong drilling program it now expects to beat Thomson Financial/First Call’s consensus estimate for the first quarter 2001 by 16%. The Calgary-based company expects earnings per share to be in the neighborhood of C$1.44, compared to the consensus estimate of C$1.24. The expected EPS is also 55% than the same period posted last year. Revenues are also expected to blow out last year’s equivalent. Precision forecasts that revenues for the first quarter will be C$610 million, more than 59% higher than the first quarter of 2000. Currently, the First Call estimate for the entire year is C$3.74. “Based upon existing market conditions and normal weather patterns, this estimate is within the range of the corporation’s current expectations,” Precision stated. The company said its actual results will be posted on May 9.
TransCanada Pipelines Limited, through its wholly-owned subsidiary, TransCanada Energy Ltd., announced plans to build the Bear Creek cogeneration project, an 80 MW natural gas-fired cogeneration power plant near Grande Prairie, Alberta. The facility will provide electric power and steam services to Weyerhaeuser Co.’s Grande Prairie pulp mill and will use natural gas as well as biomass-derived steam from the mill to provide power to all eight main manufacturing facilities of Weyerhaeuser’s Alberta operations.
TransAlta Corp. broke ground on the site of its US $210 million, 248 MW, natural gas-fired combined-cycle power plant near Centralia, WA. The new plant will be on the site of TranAlta’s 1,340 MW Centralia coal-fired power plant, pending final approvals. The facility will begin operating by July 2002.
Remington Oil and Gas announced a new discovery on West Cameron Block 170 off the coast of Louisiana in the Gulf of Mexico. The No. 4 exploratory well logged 77 net feet of apparent oil and gas pay in four sands in a previously untested fault block. The company also reported that it is increasing its 2001 capital spending forecast by $24 million to keep up with its increased exploration and production activities. The company expects first quarter 2001 oil and gas production volumes to increase approximately 34% over fourth quarter 2000 volumes of 5.2 Bcfe. Based on new discoveries announced in 2001, barring no unexpected service industry delays, Remington believes its production volumes for the year will now exceed 2000 levels by 40%. “Most of the discoveries announced in 2000 are now on production. East Cameron 305 and 345/360 are scheduled to come on production in the summer and Eugene Island 397 early in 2002,” said CEO James A. Watt. “We continue to have success with the drillbit in all three of our core areas based on 3-D seismic data. Based on success so far this year, we anticipate a 2001 capital program of approximately $90 million, or 36% above our originally approved $66 million budget. This capital program will be funded from cash flow.”
Cinergy Corp. said that it expects to realize 45% of its 2001 earnings per share target of $2.75 in the first half of the year and the remaining 55% in the latter half of 2001. “Having acquired 1,700 MW of gas-fired electric peaking capacity over the last 18 months, our energy merchant generation portfolio has changed and that is reflected in the timing of our expected profit realization during 2001,” said R. Foster Duncan, excecutive vice-president and CFO at Cinergy.
Dominion Resources Inc. announced that it is joining CME North American Merchant Energy as a partner in the proposed development of an electric generation facility near the village of Dundee in Monroe County, MI. If the 800 MW, natural gas-fired project is completed, it would represent an investment of more than $300 million in Monroe County. An executive with Dominion noted that the ultimate timeline for developing the facility and beginning commercial operations will be contingent on several studies that the new partnership will carry out before proceeding.
UtiliCorp United’s first quarter results are expected to be 15-17% higher than 2000, mostly because of the strong performance of its energy merchant business, Aquila Inc., and the contribution of its Alberta electric distribution network. UtiliCorp only acquired the Alberta assets last year, and expects to spin off Aquila as early as this week (see NGI, Feb. 14, 2000; Dec. 18, 2000). “We are clearly on track to achieve our 15% earnings growth target for 2001,” said CEO Richard C. Green Jr. “Aquila’s risk management and energy merchant businesses continued their strong performance from the fourth quarter of 2000. Aquila had significant growth in earnings before interest and taxes compared to a year earlier.” According to First Call/Thomson Financial, UtiliCorp is expected to show a profit of $2.30 per share for all of 2001, up from $1.90 per share in 2000. When it goes public, Aquila’s initial public offering is estimated to be $21 to $23 per share for 16.5 million shares. The Kansas City, MO-based international energy company will hold a conference call at 11 a.m. May 1 to discuss its first quarter earnings. For more information, visit the web site at www.utilicorp.com.
Duke/Fluor Daniel, a joint venture between Duke Energy and Fluor Corp,. last Thursday disclosed that it has been awarded contracts by Duke Energy North America (DENA) to perform engineering, procurement and construction services for four natural gas-fired, combined cycle power generation facilities with a combined capacity of 3,050 MW. Duke Energy noted that a total of 10 GE-7FA combustion turbines will be used in the four projects, which are slated for commercial operation in the summer of 2002. DENA is Duke Energy’s Houston-based merchant energy company. Included among the four projects is the 1,240 MW Murray generating facility in Murray County, GA, and the 620 MW Hot Spring generating facility in Hot Spring County, AR. The remaining two projects are the 620 MW Washington generating facility in Washington County, OH, and the 570 MW Arlington Valley energy facility in Arlington Valley, AZ. In a separate development, Duke/Fluor Daniel has also been awarded a contract by PSEG Power LLC to perform similar services for the Waterford energy facility in Waterford, OH. The Waterford plant is a nominal 865 MW, natural gas-fueled, combined-cycle merchant power plant.
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