The company began moving its Houston operations to its Alexandria headquarterslast week in preparation for closing down the Houston office. The Houstonmarketing and trading group is expected to be operating at least throughthe end of the month and plans to come up with a transition plan to ensureservice will not be disrupted.
Although E&P was the company’s forte, its energy trading operationsgrew significantly over the past few years. While its E&P assets werevalued at about $674 million at the end of 1998, Energy Trading and EnergyServices assets combined were valued at $336 million, up from only $143million two years earlier.
Energy trading revenue nearly tripled in 1998 to $3.1 billion as megawatthours sold jumped almost five-fold to 66.4 million and gas sales rose over80% to 445 million MMBtu’s. Income from Energy Trading operations, however,declined from $1.4 million in 1997 to $0.6 million in 1998 as a resultof increased costs associated with ramping up new trading activities.
It’s Power Systems assets were valued at $107.8 million at the end of1998 compared to $21 million two years prior, and the division posted $7.7million in net income in 1998, compared to a $144,000 net loss the yearprior. The division operates seven generating facilities with aggregatecapacity of 192 MW and holds equity interests in 115 MW. In addition, ithas four gas-fired merchant plant projects in various stages of developmentwith an aggregate 1,700 MW of capacity.
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