KeySpan filed an application with the New York State PublicService Commission to expand the generating capacity of itsRavenswood power plant in Long Island City by 250 MW. Whencompleted in 2003, the expanded power plant, which will beprimarily fueled by natural gas, will be the cleanest and mostefficient generating station in New York City. Today, Ravenswood isthe city’s largest power plant with a capacity of 2,168 MW, or 28%of the electric generation located in New York City. “New York Cityhas a critical need for electric power,” said Chairman Robert B.Catell. “An expanded Ravenswood power plant would help ensure thatthe city has adequate capacity to meet the ever-increasing demandfor electricity.” This year, New York City is 300 MW short ofmeeting its reliability requirement for in-city electric-generationcapacity, and the city’s demand for electricity continues to growat the rate of 150 MW per year, the company said.

Mariner Energy entered into an agreement to buy ShellExploration and Production’s 50% stake in the “King Kong” DeepwaterGulf of Mexico development project. The project is located in 3,900feet of water in Green Canyon Blocks 472, 473 and 517, which areabout 150 miles southeast of New Orleans. Mariner purchased Shell’sinterest for an undisclosed amount of cash and overriding royaltyinterest in the field. Mariner will be named operator. Agip ownsthe remaining 50% interest. Mariner intends to develop gas reservesfrom two separate reservoirs discovered by three exploration wellsthat were previously drilled in the project. The initialdevelopment plan calls for completing a previously drilled well anddrilling an additional development well, with both subsea wellstied back 16 miles to the Allegheny mini-TLP operated by Agip.Mariner also plans to drill its “Yosemite” exploration prospectlocated adjacent to King Kong in Green Canyon Block 516 before theend of the year. If successful, the company expects Yosemite to bejointly developed with King Kong. Mariner anticipates productionfrom the project to commence by Dec. 31, 2001. Mariner is majorityowned by an affiliate of Enron North America Corp., which alongwith a group of Mariner employees provided equity financing for amanagement-led buyout in 1996.

Atlanta Gas Light said it has recalculated the capacity chargesthat appear on the bills sent by marketers to the nearly 1.5million natural gas customers in Georgia. The recalculation isbased on the amount of capacity needed to support the gas deliverysystem and is based on the gas usage at each customer premiseduring the most recent year. Updated calculations go into effectAug. 1. For most customers, this change is very small. “About halfof the customers will see a slight increase, and about half willsee a slight decrease,” said Hank Linginfelter, vice president ofrates for AGL.

Large one-time charges during the second quarter cutSouthwestern Energy’s earnings down considerably. A negative $109.3million judgment in the Hales royalty lawsuit ($66.7 millionafter-tax) and an extraordinary loss on early retirement of debtmore than offset a $3.2 million gain from the sale of the company’sMissouri utility properties, which closed May 31, and improvedresults from exploration and production operations. Southwesternreported a net loss of $64.2 million, or $2.57 per share. Excludingthe one-time charges, Southwestern net income would be $1.4million, or $0.05 per share compared to last year’s loss of $1.7million, or $.07 per share. “Our results for the first half of 2000reflect the growing momentum of our E&P business, even thoughthese positive results are overshadowed by the financial impact ofthe Hales verdict,” stated President Harold M. Korell. “Ourproduction is up and our drilling results have been excellent forthe first half of the year. As for the proposed sale of our utilitybusiness, we are moving forward in this process and are currentlysoliciting interested parties. Overall, we are very optimisticabout the progress of our E&P strategy and are focused oncreating value for our shareholders.”

Honeywell Power Systems has been awarded $10 million from theDepartment of Energy for research and development of a large-scaleadvanced microturbine for on-site power generation. With the award,Honeywell will further develop its next generation Parallon powersystem, a larger more advanced version of the company’s 75 KWParallon 75 turbogenerator. The Parallon 75 is designed to convertnatural gas or liquid fuels into electricity for on-site powergeneration. It is designed to help small-to mid-sized facilitiesreduce their energy bills, improve power quality, and minimize therisk of power outages. Work is expected to begin in October.Honeywell’s next generation unit will generate 350 KW and will bedesigned to bring highly reliable, energy efficient, low-cost powerto large-scale commercial and industrial customers.

DTE Energy Technologies signed a distribution agreement forstandby electric generators with Kohler Co., a manufacturer ofdistributed power systems. DTE will market the prepackaged Kohlerproducts on a non-exclusive basis in southeastern Michigan underthe “energy now standby power” brand. The standby power unitsoperate on natural gas or liquid propane, with rated power rangesof 7.5 KW to 2 MW. The units feature the Kohler line of electroniccontrols and transfer switches, which permit automatic startup whenemergency power is needed.

UtiliCorp United announced that its $US189 million joint bidwith United Energy for 45% of AlintaGas, a gas distribution utilityin Western Australia, has been accepted by the state’s government.The transaction is expected to close by the end of October.AlintaGas is based in Perth and serves 400,000 customers. It isWestern Australia’s principal gas distributor. The remaining 55% ofthe company will be offered to the public in Australia in a sharefloat scheduled for September.

TXU announced record financial results for the second quarter.Earnings for the second quarter were $0.87/share on record revenuesof $4.6 billion (a 23% increase) and record net income of $227million. This compares to $0.35 per share for the second quarter of1999. Excluding non-recurring items, operating earnings were$0.67/share compared to $0.52/share for the same period in 1999, a29% increase. “All of our operations continue to perform well, andthe outstanding results from our Australian operations provide yetanother example of the benefits of successful implementation of ourportfolio management business model,” said Chairman Erle Nye.

Houston’s EEX Corp. said yesterday that its Llano No. 3 well,located on Garden Banks Block 386 in the deepwater Gulf of Mexico,has been drilled to its planned total depth of approximately 25,500feet, encountering hydrocarbons in the Lower Pliocene- andMiocene-age sands. Based on a log analysis, the well encounteredapproximately 340 of net pay, which may indicate a “significantdiscovery,” said Tom Hamilton, CEO. EEX is the operator of Llanowith 30% working interest. ExxonMobil Corp. holds a 20% interest,PanCanadian Petroleum Ltd. holds a 20% interest and Enterprise OilPlc has a 30% interest. EEX announced it has entered into anagreement with Murphy Oil Corp. to farm out its 40% workinginterest in the Mason Prospect in return for a carried 18% workinginterest in the initial exploration well on the prospect. The MasonProspect on Garden Banks Block 562 is located about 10 miles southof the Llano area. The well will be operated by Murphy and targetspotential hydrocarbon accumulations in both Lowe Pliocene- andMiocene-age sands. Drilling is expected to begin soon. Otherpartners in the project are PanCanadian and Enterprise. EEXreported a second-quarter net loss of $16 million or $.038 pershare, compared to a net loss of $33 million or $.079 per share forsecond quarter 1999. Included in the results is a $12 millionimpairment for producing property resulting from an evaluation ofan Indonesian field. Revenues were $62 million compared with $44million last year in the second quarter, resulting from highernatural gas and crude oil prices, and higher natural gas salesvolumes.

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