Williams has completed the expected sale of its retail petroleum travel center operations to Pilot Travel Centers LLC for $189 million, which will be added to a growing total of proceeds from assets sales that are expected to reach $2.5 billion this year compared to $3.9 billion in 2002. The travel center asset package includes 60 travel centers and their working inventories in 15 states. Williams’ only remaining retail petroleum presence consists of 29 convenience stores in Alaska that are being offered for sale in connection with the company’s planned divestiture of its North Pole, Alaska, refining operations. About 1,500 people were employed by the TravelCenters at the time the transaction closed. In addition to the travel centers sale, Williams also recently sold its ethanol business for $75 million, and has put Texas Gas Transmission on the auction block along with its stake in Williams Energy Partners and 20% of its gas reserves in its exploration and production unit.

Kerr McGee said it expects first quarter gas production to be down slightly from fourth quarter levels (792 MMcf/d) to about 725-800 MMcf/d, 85% of which will be from fields in the United States. The company attributed the slight drop to sales of North Sea and U.S. onshore properties. First-quarter oil production is expected to be 150,000-165,000 b/d, down from the 178,400 b/d in the fourth quarter. In the Gulf of Mexico. Kerr McGee said the ninth well through its Nansen spar is now online with gross production, including the subsea tie-back from the Navaho field, at 30,000 b/d of oil and 190 MMcf/d of gas. Maximum production of 40,000 b/d of oil and 190 MMcf/d of gas is expected to reached by the end of the second quarter. The company also said that gross production from the Boomvang field is currently running at 33,000 b/d of oil and 150 MMcf/d of gas from eight wells. Kerr McGee operates the Nansen and Boomvang spars with 50% and 30% interests, respectively. Company officials said they have hedged almost 75% of first quarter oil production. Kerr McGee has about 57,000 b/d hedged at $27.40/bbl and another 45,000 b/d hedged at $25.71. About 53% of its estimated natural gas production for the quarter is hedged at $4/MMBtu.

CMS Energy has sold the government energy services division of CMS Viron to Pepco Energy Services for an undisclosed amount. Pepco was a partner with CMS Viron in numerous federal contracts including the largest federal government energy savings contract ever awarded in 1999 with the Military District of Washington. That contract covered five military bases in the Washington, DC, area. DC-based Pepco said the acquisition consolidates the large Washington contract and transfers other similar energy savings contract assets. The CMS acquisition is expected to be accretive to the company’s earnings in 2003 and should allow Pepco Energy Services to continue to grow its robust federal government business, said Ed Mayberry, CEO of Pepco Energy Services, which designs and completes energy efficiency savings projects for commercial, industrial and large government facilities.

CenterPoint Energy Minnegasco (CEM) informed its residential gas customers that the March natural gas billing rate will be $1.06 per therm compared to $0.74 in February, an increase of 43%. The company noted that this increase will result in average residential customer bills seeing a $14 jump from February levels. CEM said that forecasts throughout the heating season indicated customers could expect to see an increase of 25-30% in their annual bills compared to last year — based on a return to normal weather conditions after one of the warmest heating seasons on record. However, CEM said that as a result of higher than projected wholesale gas prices and colder weather, the average customer who expected to pay about $770 from August 2002-August 2003 will likely pay closer to $870-$900, an increase of 45-50%. The company pointed out that prices for other heating fuels such as propane and oil are also increasing.

Marathon Oil Corp. reported that it replaced 262% of its worldwide crude oil and natural gas production during 2002, excluding net sales of reserves in place. Total reserves increased 237 MMBoe, or 23% at year-end 2002, to 1,283 MMBoe. The company said that total 2002 reserves were added at a competitive cost of $4.61/boe through acquisitions, discoveries, extensions, revisions and improved recovery. Excluding sales and acquisitions, Marathon added 183 MMBoe of proved reserves for a replacement ratio of 123% of 2002 production at an average cost of $4.75 per boe. Acquisitions added another 207 MMBoe at an average cost of $4.49 per boe. Net sales of reserves in place amounted to 4 MMBoe. Of the total 183 MMBoe of proved reserve additions, 58 million were in the United States and 125 million were international, the company said. U.S. additions were primarily in the Powder River Basin, Rocky Mountain area and Alaska. Marathon said it expanded its coalbed natural gas interests in 2002 through a property exchange, resulting in the addition of some 110 Bcf of Powder River Basin proved natural gas reserves. This brings Marathon’s total proved reserves in the Powder River Basin to 417 Bcf, or 70 MMBoe. On the international front, the Houston-based company said that 103 MMBoe of proved reserves were added through the Equatorial Guinea phase 2A and 2B expansion projects, which received government approval during 2002.

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