Cross Timbers completed its previously announced $115 millionacquisition of 175 Bcfe of reserves on producing properties locatedin East Texas and Louisiana from Herd Producing of Tyler, TX. Theproperties are located in Freestone, Limestone and Robertsoncounties, TX, and Claiborne and Union parishes, LA. “We willimmediately begin to develop these properties in conjunction withour existing East Texas Freestone Trend exploitation program,”stated Cross Timber President Steffen E. Palko. “This trendcurrently has a resource potential of 1.2 Tcf of gas, whichincludes more than 500 potential drilling locations and a multitudeof recompletion projects.” Chairman Bob R. Simpson said theacquisition provides the additional inventory of opportunities forthe company to achieve its previously stated goals of increasinggas production by 20% per year. “As a result, we expect to increasegas production to 535 MMcf/d by the end of 2002, a 60% increaseabove the average rate for 2000.”

Pantellos, an online marketplace for utility products andservices, opened for business Jan. 1. Twelve new suppliers havesigned membership agreements. The site was founded seven months agowhen 21 leading utility companies came together to explore theviability of an online trading community. Cinergy and BrentonSafety, a San Francisco-based supplier of health, safety andenvironmental products, completed the first integrated commercialtransactions in the Pantellos marketplace. “Pantellos is changingthe way we do business,” said Craig Weida, Cinergy’s vice presidentof purchasing. “At its simplest, Pantellos provides us a much morecost effective and efficient way to conduct purchases with oursuppliers. We also see significant opportunities for savings andimprovements throughout the industry. Working with Pantellos is notabout aggregation and price transparency, it is about making betterdecisions and improving our competitiveness.” Initial offeringsinclude asset optimization, project collaboration and auctions.Pantellos will continue to build out the full suite of marketplacecapabilities such as logistics and fulfillment, demand planning,financial solutions and trading community services.

BP Amoco has agreed to pay the state of Alaska an additional $34million in royalties on North Slope oil and gas produced through1999, Gov. Tony Knowles announced this week. The payment concludesseveral audits of BP Amoco’s royalty obligations and represents2.6% of the total royalties paid by BP from 1993 through 1999.Payment was made on Dec 29. BP also paid the state $1.2 million toresolve outstanding royalty issues between the state and ARCO forthe period through Dec. 31 when BP assumed ARCO’s royaltyobligations as a result of the BP/ARCO merger.

Houston-based technology company TradeWell Systems said 35 gastrading companies have signed up to test its ExCellerator technologyprior to launch in late January. The software is designed tostreamline financial accounting and tracking of natural gas tradingtransactions across multiple ecommerce sites. A second phase willallow participating traders to manage positions in real-time directlyfrom their desktops. It includes interfaces to multiple on-lineexchanges and marketplaces that will pass the trading informationthrough TradeWell’s EnyWare technology and then deliver theinformation directly to the trading floor via TradeWell’sExCellerator, allowing traders and support personnel to manage tradingpositions (pricing, scheduling, deal tracking, etc.) directly fromtheir desktop with real-time trading data. “Streamlined informationflow is critical for success in energy trading,” said Ralph Currey,vice president of natural gas trading for Texaco Natural Gas, whichhas agreed to use the new technology. “We are looking forward to thebenefits that ExCellerator should provide to our natural gas tradingactivities in 2001.” ExCellerator is a product-oriented solutionderived to deliver information to an existing MicroSoft Excelspreadsheet from on-line exchanges and marketplaces via theInternet. For more information on TradeWell, contact Dave Crawley at(713) 541-5466 or visit www.TradeWellsystems.com.

FirstEnergy Services Corp. reported yesterday that it hasentered into a long-term master energy services agreement with theUniversity of Akron for an undisclosed sum. FirstEnergy will act asthe university’s energy manager, acquiring competitively pricedelectricity, natural gas and steam for the school’s main campus,and for the university’s regional Wayne College campus in Orrville,OH.. As part of the deal, the service provider will offer theuniversity energy-conservation audits, renovation and newconstruction options. “By packaging our energy needs together,we’re better positioned to secure more competitive prices,ultimately reducing our energy and related costs,” said Ted Curtis,vice president of Capital Planning and Facilities Management.

The Department of Transportation’s Office of Pipeline Safety(OPS) has scheduled a three-day public meeting in mid-February toaddress initiatives aimed at improving the integrity management andcommunication requirements for natural gas pipelines. The meetingwill be held Feb. 12-14 at the Crystal City Marriott in Arlington,VA. The agency requests that written comments relating to thepublic meeting be submitted on or before Jan. 29. Specifically, itis seeking comments on how integrity management principles can bestbe applied to improve the safety of gas pipelines, and onestablishing communication standards requiring pipe operators toshare information with community and state officials and the publicabout the risks facing pipelines. Written comments should besubmitted to the Dockets Facility, Department of Transportation,Room PL-401, 400 Seventh St. SW, Washington, D.C. 20590-0001.Comments also can be posted electronically to dms.dot.gov. Commentsaddressing integrity management should have the docket numberRSPA-00-7666, while comments on the communications initiativeshould carry the docket number RSPA-00-7408. For those wishing tomake an oral presentation at the meeting, contact Jenny Donohue byJan. 29 at (202) 366-4046. For further information, contact BethCallsen at (202) 366-4572, or e-mail her atbeth.callsen@rspa.dot.gov.

The Northwest River Forecast Center reports that water availablefor hydroelectric generation in the U.S. Northwest will be belownormal the first half of the year, with stream flows at The Dalleshydroelectric dam on the Columbia River between January and July at75% of normal. The Dalles is a major measure of the water availablebecause it is one of the last dams before the Columbia River meetsthe Pacific Ocean, and it measures the water supplies thorughoutthe Columbia and Snake River systems. The forecast center’s “earlybird” or preliminary forecast set inflows to the Mica reservoir inBritish Columbia from April to September 2000 at 86% of normal. TheBritish Columbia system was a major electricity supplier to thePacific Coast areas of the United States last summer. U.S.hydroelectric turbines in the Northwest produce up to 25,000 MW,but the water amount on the Columbia and Snake rivers determineshow much power will actually be produced in spring and summermonths. The stream flows are measured by the amount of snowaccumulation in the Cascade Mountains.

TrueQuote LLC last week announced that truequote.com, itsInternet platform for over-the-counter trading of energy-basedcommodities, has received notification from the Commodity FuturesTrading Commission (CFTC). As a result of the Commodities FuturesModernization Act of 2000, TrueQuote can assure its customers withlegal certainty that the contracts for financial products offeredfor trade on truequote.com will be permissible and enforceable.”This notification confirms the legality of transactions beingconducted on our online platform,” said TrueQuote CEO Dennis Crum.”We want our customers to be aware of the CFTC’s statement and thevalidity it provides to the assurance of operations ontruequote.com.” The platform began operations earlier this quarterwith the assistance of APB Energy. The system was developed incollaboration with EnFORM Technology and Microsoft Corp.Truequote.com is a real-time, broker-assisted system for theelectricity, natural gas and coal wholesale marketplace.

In its largest development program ever, North Coast EnergyInc., based in Twinsburg, OH, has begun drilling the first of 37natural gas development wells on leaseholds in Ohio, Pennsylvaniaand West Virginia, and plans to have five rigs to complete thedrilling by March 31. CEO Omer Yonel said investor partners hadcommitted more than $6 million to drill the prospects. “It is ourplan to drill, complete and pipeline as many of the wells beforethe end of winter to meet the rising demand of our industrial andcommercial customers,” said Yonel. North Coast, organized in 1981,develops gas and oil reserves principally in the Appalachian Basin.

Port Huron, MI-based gas distributor Semco Energy expects its2000 earnings to fall 10% below analysts’ estimates because ofweather-related construction problems at its businesses in Michiganand Alaska. Wall Street estimates, according to First Call/ThomsonFinancial, had expected the company to earn $1.02 per share for2000, but Semco said the figure would be closer to $0.92. Thecompany said construction service revenues had been negativelyaffected by bad weather in November and December in the Midwest,which had delayed project completions, and had slowed down cableand fiber-optic installations. CEO William Johnson said the companywould focus on internal revenue growth along with making “selectacquisitions” in energy engineering, construction and informationtechnology.

Penn Virginia Corp., based in Radnor, PA, has closed the sale ofits non-strategic gas properties to Energy Corporation of Americafor $59.4 million, and will use the proceeds to pay off long-termdebt. The properties are located mostly in Kentucky and WestVirginia, and the effective date of the sale was Oct. 1, 2000. Theproperties are estimated to contain 70 Bcfe of proved reserves andcurrently produce 7 MMcf/d. Penn Virginia CEO A. James Dearlovesaid the sale would allow the company to begin 2001 with a “strongbalance sheet,” and said the company now will begin developing itscore assets in Appalachia and Mississippi. “Our ambitious naturalgas exploration efforts will continue and we will go on evaluatingadditional acquisition opportunities in both our oil and gas andcoal royalty business.”

High natural gas prices have forced the indefinite closure ofone of Mexico’s largest steelmakers, Hylsamex, which closed thelast of its four sponge-iron plants this week. Hylsamex is the ironand steelmaking unit of Alfa, and said it closed its final plant onMonday because natural gas prices had risen 150% last year. Theplant, located in Monterrey, had a production capacity of 700,000tons a year, and is worth about $100 million. Alfa’s othersponge-iron plants, in Monterrey and Puebla, were closed in 2000because of escalating natural gas prices. Hylsamex said it wouldimport sponge iron, used for steel production, to make up forshortfalls with the plants’ closures.

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