The difficulty in determining savings from switching to another supplier can be the primary reason for not participating in customer choice programs. But a new handy calculator on the Ohio Consumers’ Counsel (OCC) web site (www.pickocc.org) makes the math easy for residential customers. The interactive calculator helps consumers compare rates of natural gas suppliers to their current natural gas company. Consumers enter the current rate of a natural gas supplier in the calculator, their county sales tax and their monthly natural gas usage to receive a side-by-side comparison of what their monthly natural gas bill would be if they chose a supplier versus staying with their gas utility. “Ohio consumers deserve easy to use resources to assist them in making educated utility choices,” said Robert S. Tongren, Consumers’ Counsel. “This new tool will aid consumers in calculating potential savings based on their natural gas usage and suppliers’ offers.” Three of Ohio’s natural gas utilities have offered natural gas choice programs since 1997: Cincinnati Gas & Electric, Columbia Gas of Ohio and Dominion East Ohio. About 38% of those companies’ eligible customers have participated by choosing an alternative gas supplier. Gas choice is being offered this winter for the first time for Dayton area customers of Vectren Energy Delivery of Ohio.

British energy giant BP said it expects to report a decline in fourth-quarter earnings because of weaker-than-expected performance by its refining and marketing division. The news came a day after BP announced $1.3 billion in asset sales in the North Sea and the Gulf of Mexico. In a brief interim update on fourth quarter financial and operating statistics, BP said U.S. gas price realizations are expected to rise slightly ahead of the change in Henry Hub prices. However, the overall refining, marketing and trading environment deteriorated relative to the third quarter of 2002. Liquids realizations are expected to be broadly in line with last quarter. But chemicals margins are expected to weaken as prices lagged the rise in feedstock costs. Demand remains sluggish, BP said. Hydrocarbon production is expected to be up about 3% and 1.5% for the full year and 4Q, respectively, compared with 2001. North American NGL margins are expected to be slightly lower than in the third quarter. Retail margins are expected to be down from 3Q02 due to seasonal declines compounded by significant crude price increases at year-end. All these financial data, however, are subject to change and may differ considerably from the final numbers that will be reported on Feb.11, BP said.

Enterprise Products Partners LP said that the underwriters of its recent equity offering have exercised their option to purchase an additional 1.9 million common units to cover over-allotments. The sale is part of the company’s equity offering that was priced on Jan. 9, and is at the offering price to the public of $18.01 per unit. The total net proceeds from the offering of $252.9 million, which includes the additional common units sold through the over-allotment, will be used to repay a portion of the debt incurred to finance the purchase of ownership interest in Mid-America Pipeline Co. and Seminole Pipeline Co. Enterprise is the second largest publicly traded, midstream energy partnership behind Kinder Morgan. Enterprise has an enterprise value of $6 billion.

KeySpan Corp. shares fell nearly 6% last Tuesday to $33.79 following an offering of 13.9 million shares of its common stock through Credit Suisse First Boston at a price of $34.50 per share. The equity offering generated gross proceeds of $480 million and net proceeds to the company of $473 million. Credit Suisse First Boston was granted an option to purchase an additional 700,000 shares within 30 days to cover over-allotments. KeySpan Corp. on Monday updated its 2003 consolidated earnings guidance to a range between $2.45-2.60 per share. Earnings from core operations are now forecast to range between $2.15 and $2.20 per share, with earnings from its Exploration and Production unit forecast to range between 30 and 40 cents a share. CEO Robert B. Catell said Monday the equity sale would reduce the company’s debt-to-capitalization ratio by 450 basis points, but when coupled with expected interest rate savings from the pay down of commercial paper, would result in dilution of 7% per share. Earnings for 2002 were reaffirmed in a range of $2.60-2.75 a share.

While affirming Kerr-McGee Corp.’s ‘BBB’ long-term corporate credit and senior unsecured ratings and its ‘A-2’ short-term corporate credit and commercial paper ratings, Standard & Poor’s Ratings Services (S&P) last week revised the company’s outlook to stable from positive. The credit rating agency pointed out that the Oklahoma City-based exploration and production company has about $4 billion in debt outstanding. “The outlook revision reflects Standard & Poor’s expectations that Kerr-McGee’s deleveraging to a credit profile commensurate with a higher rating is not likely to be achieved in the near term,” said S&P’s credit analyst John Thieroff. “Although the company achieved meaningful debt reduction during 2002 through asset sales, the recent $335 million writedown of the company’s Leadon field in the U.K. North Sea highlights the challenges Kerr-McGee faces in deleveraging through organic growth.” S&P said the ratings of Kerr-McGee reflect an above-average business position in the “volatile” exploration and production segment of the oil and gas industry, partially offset by a moderately aggressive financial profile. In comparison to other independent producers, “Kerr-McGee has a large, diverse set of properties with significant growth opportunities,” Thieroff added. The agency found that the company has focused considerable efforts on deepwater exploration and development in recent years, which “has added some risk” to its business profile. The company also faces “significant financial risk” resulting from heavy capital spending requirements and “significant debt leverage.” Kerr-McGee’s stability rating reflects S&P’s expectation that the company has addressed its primary areas of operational concern and that production targets for the intermediate term will be met or exceeded. The agency added that it also expects deleveraging to remain a priority and that aggressive growth objectives will not impede progress toward that goal.

Independent Murphy Oil Corp. has increased its capital spending program 10% over last year’s budget, with plans to improve its upstream operations in the deepwater Gulf of Mexico (GOM) and overseas. The El Dorado, AK-based company plans to spend $952 million this year, with $248 million for exploration of GOM projects, gas exploration in Western Canada and drilling offshore Malaysia. Development funds total $486 million, a 27% increase over 2002 levels, which is earmarked for deepwater GOM at Front Runner, Medusa and Habanero, as well as overseas. GOM’s Medusa is scheduled to come onstream by mid-year, while Habanero will begin producing in the third quarter. Front Runner is scheduled for the first half of 2004.

Staking its future growth on building natural gas reserves, Calgary-based Penn West Petroleum Ltd. has unveiled a record exploration and development program for 2003 to reflect a strong inventory of Canadian prospects and a “favorable” commodity price outlook for the year. The independent’s initial capital expenditure budget for 2003 ranges between C$550-$650 million. Of that amount, about C$490 million will be allocated to exploration and development activities, with the balance allocated to property acquisitions. However, Penn West said that it is possible that “additional acquisitions or drilling opportunities” could up the budget as the year progresses. Exploration and development plans include an aggressive drilling program in the first quarter, focusing on natural gas growth in its northern core area of the Western Canadian Sedimentary Basin. Penn West plans to drill approximately 500 net wells in 2003, with production estimated to average 104,000-109,000 boe/d. These production targets provide for only a modest level of acquisition spending in the range of $60 million to $160 million, less than the average actual spending of C$227 million over the past three years.

New Orleans-based Entergy Corp. expects to earn at least 28 cents a share for the fourth quarter, including income from its partnership with Koch LP; analysts on average had estimated 20 cents a share for the period. Both nuclear and utility earnings will be flat year-over-year, Entergy said. Energy Commodity Services, however, will be higher for the quarter because of a strong performance from Entergy-Koch, its wholesale marketing and trading arm. Entergy also reiterated 2003 earnings guidance to be in the range of $3.75 to $3.95 per share. Analysts on average estimate earnings this year of $3.60-3.85. A teleconference with analysts is scheduled for Feb. 4.

A syndicate of lenders has agreed to fund a PG&E National Energy Group (NEG) subsidiary so that it can complete the construction of three power plants and keep a fourth one operating. NEG, the financially strapped merchant energy subsidiary of PG&E Corp., has been sued by Shaw Group, a plant contractor, for alleged nonpayment and assurances that $600 million would be paid to construct generators in Michigan and Arizona. According to a Form 8-K filed with the Securities and Exchange Commission on Thursday, the lenders will fund NEG subsidiary GenHoldings I LLC’s plant construction for three combined-cycle natural-gas fueled projects: Athens Generating, an 80% complete 1,080 MW plant in Athens, NY, which is scheduled for commercial operation by late summer; Covert Generating, 70% complete, a 1,170 MW facility in Covert, MI, which is scheduled for commercial operation by this fall; and Harquahala Generating, a 1,092 MW plant in Tonopah, AZ, which is 77% complete and expected to be ready for commercial operation in the fall. The funds also will provide working capital for all of the projects, as well as GenHoldings’ 360 MW Millennium Power plant, which is located in Charlton, MA. The gas-fueled plant began commercial service in mid-2001.

Mexico’s Petroleos Mexicanos (Pemex) plans to use an increased budget of 108.4 billion pesos (US$10 billion) to fund activities within its production and exploration unit in an effort to raise its natural gas and crude oil output and to replenish its declining reserves. The budget is the largest ever authorized by Mexico’s Congress, according to Pemex. Pemex said that with a $10 billion a year budget through 2006, it could increase its natural gas output by 47% and its crude output 34%. Last year, gas production averaged 4.4 Bcf/d; by 2006, Pemex plans to raise production to 7 Bcf/d. Of the total, nearly 2 Bcf/d will come from its prolific Burgos gas fields in northeastern Mexico. In 2002, crude oil production was about 3.2 million bbl/d; by 2006, output will reach about 4 million bbl/d. Top initiatives this year include concentrating on raising light crude production in southeastern Mexico and maintaining heavy crude output levels at Cantarell, which lies offshore the southern Mexican Gulf Coast. It also hopes to increase enthusiasm for its multiple service contracts (MSCs), which would allow private investment into its natural gas infrastructure. The first MSC transactions are scheduled to be announced in February.

CMS Marketing, Services and Trading (MST) has completed the sale of its wholesale natural gas trading book to Sempra Energy Trading for $18 million. The sale to the Sempra Energy subsidiary was first announced in late December. It basically removes CMS from the once lucrative wholesale gas trading arena, but will give parent CMS Energy money to accelerate its debt reduction program. CMS MST also has indicated it wants to sell its wholesale electricity book. David B. Geyer, CEO of CMS MST, said that the sale will not affect gas service to its 15,000 retail customers in Michigan. It is registered with the Michigan Public Service Commission as a retail gas and power supplier. Now headquartered in Houston, CMS MST is moving its offices to Dearborn, where CMS Energy is headquartered. CMS joins other former energy merchants in exiting the wholesale energy trading business, including Dynegy Inc., Allegheny Energy Inc., Aquila Inc. and El Paso Inc.

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