Capgemini Energy LP, a joint venture formed by Capgemini America Inc. and TXU Corp., began operation on Thursday with a complete leadership structure drawn from both parent companies. TXU signed a $3.5 billion, 10-year agreement in May with Capgemini to form the new company. Under the agreement, about 2,700 employees will be transferred from TXU to Capgemini. TXU will own less than 3% of the company and will have the right to sell all of its interest when the contract ends. The company will provide information technology, call center, billing, human resources, supply chain and accounts payable, and finance and accounting services to TXU and other energy companies. Capgemini selected Bob Pryor, its former president of outsourcing services, as its CEO. Elizabeth Lavalley, who most recently served as TXU’s senior vice president of information technology, will be the company’s COO.

Although critical of the utility’s handling of market risk, Idaho regulators last week approved a $22.1 million, or 10%, rate hike for Intermountain Gas to cover increased wholesale natural gas costs, and they encouraged the utility to file another rate adjustment late this summer, before the winter heating season. The new rates took effect last Thursday. “The increase approved does not reflect a permanent rate change, but is part of the company’s purchased gas cost adjustment, typically a yearly process that adjusts the gas purchase portion of customer bills up or down depending on the cost of natural gas in the wholesale market,” said an Idaho Public Utilities Commission spokesperson. In making its decision, the regulators said wholesale gas prices “have fluctuated dramatically” in recent years. Last Tuesday’s action follows a 33% purchased gas rate increase last year for Intermountain and a 28% decrease in 2002. The PUC spokesperson said that the regulators placed nearly $700,000 of the increase in a reserve account “until the company complies with previous commission orders to create a hedging and risk management strategy that makes it easier for the commission to assess the company’s gas purchasing decisions.”

Members of the North American Energy Standards Board (NAESB) have ratified standards to implement FERC Order 2004 which significantly broadened the scope of energy affiliates that will be subject to the agency’s standards of conduct governing the relationships between regulated natural gas pipeline/electric transmission providers and their affiliates. The rule, set to go into effect Sept. 1, significantly expanded the current Order 497 regulations governing regulated pipeline and power transmission providers and preferential treatment, information disclosure and employee sharing with their marketing and wholesale merchant affiliates. The expanded rules apply to traders, producers, gatherers, processors, intrastate and Hinshaw pipelines, and any affiliate making a sale for resale of natural gas or electric energy in interstate commerce. The new standards set out by NAESB include a package of modifications of existing definitions and standards, the deletion of several principles and definitions, the creation of a new principle and the modification of one interpretation. NAESB members approved the standards in balloting that closed June 25.

In a second quarter earnings guidance issued last week, independent producer Murphy Oil Corp. said it expects net income to range between $1.70-1.80 per diluted share, excluding a gain on sale of properties in western Canada. Production during the quarter from continuing operations is estimated to average 117,000 boe/d, the El Dorado, AR company said, with average crude oil and natural gas sales volumes for the quarter approximately 122,000 boe/d. Dry hole charges for the quarter will range between $10-16 million “depending on results of the Pertang well currently drilling in Peninsular Malaysia,” and total worldwide exploration expense should average between $23-29 million. A gain on the sale of certain western Canada properties will be recognized in the second quarter, which will be reflected when earnings are released.

Fortuna Energy Inc., a subsidiary of Calgary-based Talisman Energy Inc. has doubled its existing acreage with the acquisition of Belden & Blake Corp.‘s gas-rich Trenton/Black River assets in the Appalachia region for US$65 million. Talisman CEO Jim Buckee said the “key” to the transaction is the “highly prospective land position.” There were already 40 drilling locations, and Fortuna has identified more than 25 additional locations, he said. “With the added production, Fortuna will be producing 110-120 MMcf/d, and there are now four additional wells awaiting tie in,” said Buckee. “The latest Fortuna well at Moss was also very successful, testing at 15 MMcf/d.” The main assets consist of land adjacent to Fortuna’s holdings in New York, as well as interests in Pennsylvania, Ohio and West Virginia. In total, Fortuna will acquire approximately 475,000 gross acres of Trenton/Black River rights throughout the Appalachia region, with an average working interest of 78%. Fortuna currently has 433,000 acres in Appalachia (approximately 100% working interest). Fortuna will also acquire 4-5 MMcf/d of production (net before royalty), which is expected to increase to 8-10 MMcf/d by the end of the third quarter.

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