The various owners of the Black Marlin Pipeline System, a75-mile long natural gas and condensate gathering system in theGulf of Mexico, have sold the line to Williams Field Services for$9.25 million. The line was purchased from Blue Dolphin Energy, a50% owner, MCNIC Pipeline & Processing Co., a 33.33% owner, andWBI Holdings, Inc., a 16.67% owner. The sale includes related shorefacilities servicing the High Island area. Ivar Siem, chairman ofprimary owner Blue Dolphin, said the company had purchased BlackMarlin in early 1999 “during a period when the system hadexperienced lower throughput volumes due to limited drillingactivity in the High Island area. Since then the activity level hasbeen very high and significant additional reserves have beendiscovered,” Siem added. “This is an opportunity for us to realizegood value for the asset. We can re-deploy a portion of the saleproceeds to other niche pipeline opportunities in the Gulf.”
Northern Border Partners L.P. (NBP) entered an agreement topurchase Bear Paw Energy, LLC from a consortium of investors for$370 million in cash and stock. Bear Paw Energy has gathering andprocessing operations in the Powder River Basin (PRB) in Wyomingand the Williston Basin in Montana, North Dakota and Saskatchewan.The company has about 226,000 acres under dedication and 600 milesof gathering pipelines in the PRB. Bear Paw holds over 2,800 milesof gathering pipoelines and four processing plants with a capacityof 90 MMcf/d in the Williston Basin. “Once completed, we will haveadded over $625 million in non-regulated assets to the partnershipwith our third major acquisition in a little over one year. Ourtotal mix of non-regulated businesses will be slightly over 25%,”said Bill Cordes, CEO of NBP. “These strategically located assetswill fit, both commercially and operationally, with Crestone EnergyVentures and Northern Border Pipeline.” NBP said $185 million willbe paid in its own common stock, with the remainder paid in cashand assumption of liabilities. Pending shareholder and regulatoryapprovals, the acquisition is targeted for completion by the end ofthe first quarter.
Enron Energy Services and Owens-Illinois, Inc., a leadingproducer of glass and plastics packaging, have announced a 10-yearenergy management agreement covering 53 Owens-Illinois (O-I)manufacturing facilities in 20 states and energy purchases inexcess of $2 billion. Under the initial agreement, Enron will workwith Owens-Illinois to manage the supply of electricity and naturalgas to O-I facilities and will continue to look for ways to reduceO-I’s aggregate demand. Owens-Illinois is the largest manufacturerof glass containers in the United States, North America, SouthAmerica, Australia, New Zealand, and China and one of the largestin Europe. O-I also is a worldwide manufacturer of plasticspackaging. Enron currently manages energy at over 28,500 customersites.
Sempra Energy completed the sale of its stake in retail marketerEnergy America to Centrica plc, the British energy and homeservices company. The transaction was finalized following receiptof all required state and federal regulatory approvals. The $56million sale was announced on Dec. 12, 2000. Sempra held a 72.5%ownership in the company. Energy America sells gas and electricityto about 400,000 residential and small-business customersnationwide. In August 2000, Centrica purchased Direct EnergyMarketing, Canada’s largest independent gas marketing company. Thepurchase included Direct Energy Marketing’s 27.5% stake in EnergyAmerica.
Sempra Energy Solutions, meanwhile, announced it has signed athree-year agreement to provide energy services to members ofAmeriNet, Inc., the nation’s largest membership-based health caregroup purchasing organization. The contract, which became effectivelast June, is worth an estimated $85 million. Sempra will provide achoice of energy services for AmeriNet members to individuallytailor their own programs, including: commodity supply, energyefficiency auditing, infrastructure ownership and management, andoperations and maintenance. Sempra Energy Solutions’ offeringsinclude long-term gas or electricity commodity contracts.
DPL reported yesterday that it has notched a record for earningsper share before extraordinary items in 2000 at $1.56, a 15%increase over the $1.35 mark the company posted for 1999. Likewise,the company beat 1999’s fourth quarter level of $0.27 per share by$0.10. For the fourth quarter, the company posted net income of $45million, compared to the 1999 level of $40.6 million. For the year2000, DPL’s net income was $199 million, which shows a slightdecrease from the $204.2 million the company showed in 1999. “Our2000 financial and operating results reflect the significant stepswe took in preparing the company for the deregulated energymarket,” said CEO Allen Hill. “In addition, our focus on merchantgeneration expansion will lead to continued industry leadinggrowth.” DPL expects 2001 earnings per share to increase more than20% from the $1.56 in 2000 to $1.90. In addition, DPL forecaststhat its earnings are expected to increase at an annual rate of atleast 10% after 2001, and could reach a rate of up to 15%.Ohio-based DPL has two subsidiaries, DPL Energy and Dayton Power& Light Co.
A strong performance in the fourth quarter from its AquilaEnergy subsidiary will lift UtiliCorp United’s full-year 2000earnings higher than estimated just three months ago, companyofficials said this week. The Kansas City, MO-based company nowestimates 2000 earnings per share will be about $2.20, a 25.7%increase over the $1.75 earned in 1999. “Aquila’s energy merchantbusiness continued to be very strong through the fourth quarter,”said President Robert K. Green. “Aquila’s performance clearlyenabled us to raise our expectations regarding year-end results.”The company will give a 2000 earnings update on Feb. 8. CEO RichardC. Green Jr. said the company began reducing its exposure in theCalifornia market several months ago, and added, “today, we have nomaterial exposure there.”
Texas Railroad Commissioner Charles Matthews last week proposedthat the commission look into “all possible solutions” regardingthe high cost of natural gas. Discussions with representatives fromthe exploration and production sector, gas utilities and customergroups had convinced him that the state has to consider long-termsolutions to ensure the gas supply is reliable and affordable.Along with the supply problem, Matthews said he also wants toresearch how to encourage more workers to enter the oil and gasindustry, which has faced severe declines in the past few years. Sofar this winter, gas bills for Texas customers have been about 50%higher than they were last year. In June, the state begins itspilot deregulation program, which becomes a state-wide program nextJanuary. “Natural gas consumers have been calling with theircomplaints,” said Matthews. “We have got to address this issue andwork toward solutions in avoiding gas spikes.” Matthews said hewould work with Texas Rep. Steve Wolens, who chairs the House StateAffairs Committee, on policies to increase drilling in Texas. Healso wants to address the decline in the workforce on all levels ofthe oil and gas industry, from roughnecks to geoscientists topetroleum engineers. Education grants from federal agencies likethe Departments of Energy and Labor also may be explored, he said.
Mississippi River Transmission (MRT) is considering constructionof a new pipeline lateral from Horseshoe Lake, in Madison County,IL, to a connection with Natural Gas Pipeline Company of America inClinton County, IL. The new line would be designed to provide firmtransportation capacity of 230,000 Dth/d. MRT intends to constructthe facilities under Section 311 (NGPA), but depending on thenature of the requests for capacity MRT may consider proceedingunder Section 7c (NGA). The in-service target date for suchcapacity is June 2002. The solicitation will close on Feb. 19. Formore information, contact Bob Derickson (314) 991-7373, DeniseFetsch (314) 991-7426 or Mike Stoll (314) 991-7405.
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