MCN Energy Group said it is planning a new direction for itspreviously released strategic plan that will emphasize steadygrowth in core operations, more predictable earnings and moderatecapital investments.

CEO Alfred R. Glancy III said the plan “entails more modest -but still substantial – capital investment levels of approximately$600 million to $700 million annually, compared with previous plansexceeding $1 billion a year. Those investments will be allocatedapproximately 25% within the Gas Distribution segment, 35% withinPipelines & Processing and 40% within Energy Marketing, Storageand Electric Power, primarily in North America.”

The company said it posted a third quarter net loss, excludingunusual items, of $8 million, or $0.10 per diluted share, comparedwith earnings of $1.2 million, or $0.02 per share, in the 1997third quarter. Including special items the net loss totaled $177.2million, or $2.24 per diluted share. MCN attributed the poorresults mainly to continued weak energy prices, partially offset byreduced seasonal losses from lower operating costs in its gasdistribution segment.

Following a second quarter net loss of $210.1 million, or $2.67per share, related to low oil and gas prices and poor performanceof certain Midcontinent and Gulf of Mexico producing properties,MCN warned investors in September that it’s not likely to meetanalysts’ 1998 and 1999 earnings expectations of $1.64/share and$2.02/share. MCN said it would take a year-end, one-time charge of$10 million for the first phase of its corporate reorganization,which should remove $15 million a year from its current operatingexpenses (see daily GPI Sept. 29, 2998). It also announced plans tosell its exploration and production business. The plannedrealignment is designed to establish a more streamlinedorganizational structure to enhance efficiency, lines of authorityand internal customer responsiveness. It also would include areorganization of some upper management positions, including theretirement, effective next April, of its Vice Chairman and CFOWilliam K. McCrackin.

For the thrid quarter, MCN’s Diversified Energy group recordedbreak-even earnings compared with $17.8 million, or $0.23 perdiluted share, a year earlier. Excluding a ceiling test write-down,exploration and production operating and joint venture income was$6.5 million, compared with $16.0 million for the 1997 thirdquarter. Gas and oil production was 24.3 Bcfe, down from 25.6 Bcfein the third quarter of 1997, primarily due to the sale ofproducing oil properties since late 1997. Pipelines &Processing operating and joint venture income, excluding a chargefor the company’s coal fines project and write-down of a Midwestpipeline investment, was $3.5 million in the 1998 third quarter,compared with $7.8 million in the corresponding period last year.

Energy marketing, gas storage and electric power – excluding a$2.5 million restructuring charge – had operating and jointventure income of $8.3 million compared with $8.1 million in the1997 third quarter. Gas sales and exchange deliveries rose 42% to114.5 Bcf mainly due to increased volumes marketed in theMidcontinent/Gulf Coast supply area and in the Midwest.

The gas distribution group reported a third-quarter loss of $7.8million, or $0.10 per diluted share, compared with a net loss of$16.6 million, or $0.21 per share, in the same period a yearbefore. Total gas sales and transportation volumes in the 1998third quarter fell to 175.3 Bcf from 207.6 Bcf a year earlier.

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