LG&E Energy has reached a settlement with the Springfield,IL, City Water, Light, and Power Co. (CWLP) over a dispute stemmingfrom the city’s default on a 1998 electricity options contract. TheSpringfield City Council approved the $16.6 million settlementduring a special meeting Saturday following an agreement lastTuesday with representatives from Springfield, just days before thecase was scheduled to go to trial before U.S. District Judge JohnG. Heyburn in Louisville, KY. “We are pleased to settle this matterin a very favorable manner for our company. It clearly sends amessage that we will aggressively pursue parties who do not honortheir contractual obligations to us,” said Paul W. Thompson,LG&E Energy’s senior vice president of energy services. Pricesfor power spiked in the summer of 1998 as demand for powerincreased in the Midwest due to intense heat. CWLP did not honorits commitments with LG&E Energy Marketing (LEM) and laterattempted to argue that the contracts were void because the utilitydid not have the proper authority under Illinois law to enter intothem. Those defenses were argued before Judge Heyburn last Novemberand he ruled in LG&E Energy’s favor in certain summaryjudgement proceedings.

Ocean Energy said it had a reserve replacement last year thatwas 504% of 1999 production and a finding and development (F&D)cost of $5.13 per barrel of oil equivalent (BOE). “This operationalsuccess was accomplished while implementing a $700 million assetrationalization program, and eliminating more than $100 million inannual costs,” said CEO James T. Hackett. “Our recentNansen/Boomvang discoveries and our drilling program with DukeEnergy in the Gulf of Mexico, as well as our international anddeepwater Gulf of Mexico high-impact drilling opportunitiesposition us for continued low F&D costs and reserve growth in2000.” Ocean’s total proved reserves rose 42% from 292 MMBOE atyear-end 1998 to 415 MMBOE as of Dec. 31, 1999. Proved gasreserves, which comprise 56% of total proved reserves, reached1,387 Bcf and crude oil reserves totaled 184 million bbl. Of theseproved reserves, 68% are located domestically and 32%internationally.

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