Despite an El Nino winter and lower gas liquids prices, NGCCorp. enjoyed a first quarter substantially better than one yearago. CEO Chuck Watson attributed the improvement to better gas andliquids marketing operations in the U.S. and the U.K.

“We estimate that the deterioration in market prices impactedour operating margin by $25-30 million on a quarter-to-quarterbasis,” said Watson. “During the quarter, we began to see thebenefits from the successful integration of the assets of Destecand Chevron into NGC and improved efficiency from the ongoingrestructuring of our liquids operation,”

The company had net income of $12.3 million, or $0.07 per shareon a diluted basis, compared with $4.6 million, or $0.03 per sharereported in the first quarter of 1997. Excluding certain charges inboth periods, net income for the first quarter of 1998 was $18.6million, or $0.11 per share on a diluted basis, compared to $26.6million or $0.16 per share in 1997.

The 1998 first quarter results include severance charges of $9.6million, $6.3 million after tax, or $0.04 per share, related to therestructuring of the gas liquids business. The 1997 first quarterearnings included net charges totaling $22.0 million, $0.13 pershare, primarily related to inventory positions in liquids andcrude oil, and a reserve related to an investment in the failedAvoca gas storage project.

The company’s consolidated operating margin for the firstquarter increased about $30 million. The marketing segment reportedits operating margin rose $4.1 million because of higher unitmargins in the gas business that offset a $2.4 million loss inelectric power marketing.

NGC’s U.S. gas sales volumes increased to 6.5 Bcf/d in the firstquarter from 6.2 Bcf/d for the first quarter of 1997. In addition,during the first quarter of 1998 NGC sold 2.1 Bcf/d in Canada and0.7 Bcf/d in the U.K. Electric Clearinghouse (ECI), NGC’s electricpower marketing subsidiary, reported sales volumes for the quarterof 25.0 million MWh, compared with 17.4 MWh in the first quarter of1997. Gas processing volumes averaged 127.5 thousand barrels/dgross during the first quarter of 1998 compared with 128.6 thousandbarrels/d during the first quarter of 1997. Crude oil marketingvolumes increased to 195.2 thousand barrels/d from 151.9 thousandbarrels/d in the first quarter of 1997.

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