Range Resources boosted its hedging position to take advantage of recent commodity price increases, locking in prices for two-thirds of its oil and gas production next year. All of the Company’s hedges are straight swaps entered into primarily with major financial institutions. “With approximately 75% of projected production from current projects hedged for the fourth quarter, and roughly two-thirds hedged for 2003 at attractive prices, we have greatly enhanced the predictability of our cash flow,” said Range President John H. Pinkerton. “To the extent futures prices maintain current levels or extend their gains, we will continue to pursue our policy of hedging 50-75% of anticipated production at least for 12-18 months.” The company has 97,842 MMBtu/d of gas production hedged for the fourth quarter at $4.08/MMBtu, 84,659 MMBtu/d hedged for 2003 at $3.95, 41,471 MMBtu/d hedged for 2004 at $3.92 and 9,932 MMBtu/d hedged in 2005 at $3.80. Range’s production comes primarily from the Permian Basin, as well as basins in the Midcontinent, Gulf Coast and Appalachian regions.

New Jersey Natural Gas Co. (NJNG) filed with the New Jersey Board of Public Utilities (BPU) for an adjustment in the price of Basic Gas Supply Service (BGSS), which will raise its customer’s bills by 3%. NJNG requested the increase after calculating its gas costs projections for the upcoming year. The company said it expects to maintain its current standing as the low-cost provider among the state’s natural gas distribution companies. The company pointed out that over the course of the 2001-2002 winter, NJNG passed the savings from lower market prices along to customers resulting in a total price reduction of 15%. However, the company noted that since that time, the New York Mercantile Exchange (NYMEX) price for natural gas for this winter has increased approximately 30%. NJNG pointed out that 75% of NJNG’s winter supply has already been purchased and its cost is below the current cost of NYMEX winter supplies. In addition, the company said it saves customers approximately 5% on their bills each year through sales of unused pipeline capacity and natural gas when not needed in the company’s core market. If the BPU approves NJNG’s request, the price for a residential heating customer will increase from $0.8721 to $0.9002 per therm. The increase is expected to add about $2.81 to the monthly bill of an average customer using 100 therms per month, or $33.72 annually. If approved, the request would go into effect Dec. 1. NJNG added that it has not filed for a traditional base rate increase for service delivery and other charges in almost 10 years, while continuing to make capital investments to meet the needs of system reliability and a growing customer base.

Enbridge Energy Partners LP closed its acquisition of the Midcoast, Northeast Texas and South Texas systems from Enbridge Inc. The purchase price of $820 million is subject to adjustments for working capital and other items. The Midcoast system includes 4,000 miles of natural gas gathering and transmission pipelines, with an aggregate throughput capacity of 4 Bcf/d, and natural gas treating and processing assets located in the Midcontinent and Gulf Coast regions. Included in the Midcoast system are four interstate pipeline systems, 35 intrastate and wholesale customer gas pipeline systems, 35 gathering and processing/treating systems, 98 gas liquids, crude oil and carbon dioxide trucks and trailers and 48 rail cars. The Northeast Texas system includes 1,200 miles of gas gathering lines with a throughput capacity of 400 MMcf/d, along with five treating plants and four processing plants. The South Texas system consists of 175 miles of gas gathering lines with a capacity of 100 MMcf/d and one treating plant. The South Texas gathering system interconnects with 500 miles of gas transmission lines, which the partnership has the right to acquire, subject to among other things, payment by the partnership of the $41 million purchase price and regulatory approvals. Concurrently with the closing, the partnership sold nine million limited partner interests to Enbridge Energy Management LLC for $333 million ($39/share). The partnership intends to use the proceeds from the sale to pay off debt assumed in connection with the acquisitions.

Piedmont Natural Gas boosted its customer service base in North Carolina, by agreeing to a two-part deal that includes the stock purchase of North Carolina Natural Gas (NCNG), a distribution subsidiary of Progress Energy, and Progress Energy’s investment in EasternNC, a gas delivery service, for approximately $425 million in cash. The acquisition includes the 176,000 NCNG residential, commercial and industrial natural gas customers in eastern and southern North Carolina, giving Piedmont more than 454,000 customers in the state, and a total of 901,000 customers in North Carolina, South Carolina and Tennessee. The purchase is the second this month for the Charlotte, NC-based company, after Piedmont completed its purchase of North Carolina Gas Service (NCGS), the North Carolina gas distribution division of NUI Corp. (see NGI, Oct. 7). NCGS serves customers in Rockingham and Stokes counties, contiguous to Piedmont’s existing service territory. In 2001, Piedmont purchased the gas distribution system serving customers in the Gaffney area of Cherokee County, SC, from Atmos Energy Corp. Last year it also began service to new territory in Avery, Mitchell and Yancey counties in North Carolina. EasternNC is a joint venture with the Albemarle Pamlico Economic Development Corp., which delivers gas service to 14 counties in eastern North Carolina. The boards of directors of both companies have approved the transaction. Still to come is approval from state and federal officials. Piedmont was advised by Merrill Lynch and by the law firm of Nelson Mullins Riley & Scarborough. Progress Energy was advised by Salomon Smith Barney and by the law firm of Hunton & Williams.

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