MCN Energy Group Inc. said yesterday it will take a year-end,one-time charge of $10 million for the first phase of its corporatereorganization, which should remove $15 million a year from itscurrent operating expenses. The realignment establishes a morestreamlined organizational structure to enhance efficiency, linesof authority and internal customer responsiveness. It includes areorganization of some upper management positions, including theretirement, effective next April, of its Vice Chairman and CFOWilliam K. McCrackin.

Lee Dow, senior vice president, treasurer and CFO at MCN’sMichigan Consolidated Gas Co. (MichCon) subsidiary, assumes theadditional post of senior vice president and treasurer at thecorporate level and will add the corporate CFO title followingMcCrackin’s departure. Stewart Lawrence, previously manager ofexternal communications, has been named director of investorrelations, replacing Thomas Connelly, who has been appointed MCNgeneral auditor.

Still to come is MCN’s plan to sell off part or all of itsexploration and production company, which holds more than 1.3 Tcfof proved gas reserves, making the company among the top 20 largestindependent producers in the nation. The E&P propertiescurrently are being grouped into four packages to be presented forbids from interested buyers by year-end.

The corporate realignment was prompted by a second quarter netloss of $210.1 million, or $2.67 per share, related to low oil andgas prices and poor performance of certain Midcontinent and Gulf ofMexico producing properties. MCN Energy Group warned investors inSeptember that it’s not likely to meet analysts’ 1998 and 1999earnings expectations of $1.64/share and $2.02/share.

“The realignment is designed to place MCN back on a course ofearnings growth,” MCN Chairman, President and CEO Alfred R. GlancyIII said. “The cost savings will improve margins not just for thecoming year, but for the long term.” Glancy said the realignmentwill consolidate functions previously conducted at the MCN, MCNICand MichCon levels.

MCN’s share price fell $0.50 yesterday and closed at$17.88/share, $1.44 more than its 52-week low.

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