Statoil Energy’s sale of 1.1 Tcf of gas reserves and 6,500 wellsin the Appalachian Basin to Equitable Resources earlier this monthfor $630 million was the first of three possible transactions, aspokeswoman said last week. The latter two, which would include thecompany’s top-30 trading operations, and growing power developmentarm, are expected to involve an eastern-U.S. electric utility buyerand take place before March, according to one inside source.
The company began moving its Houston operations to itsAlexandria headquarters last week in preparation for closing downthe Houston office. The Houston marketing and trading group isexpected to be operating at least through the end of the month andplans to come up with a transition plan to ensure service will notbe disrupted.
Although E&P was the company’s forte, its energy tradingoperations grew significantly over the past few years. While itsE&P assets were valued at about $674 million at the end of1998, Energy Trading and Energy Services assets combined werevalued at $336 million, up from only $143 million two yearsearlier.
Energy trading revenue nearly tripled in 1998 to $3.1 billion asmegawatt hours sold jumped almost five-fold to 66.4 million and gassales rose over 80% to 445 million MMBtu’s. Income from EnergyTrading operations, however, declined from $1.4 million in 1997 to$0.6 million in 1998 as a result of increased costs associated withramping up new trading activities.
Its Power Systems assets were valued at $107.8 million at theend of 1998 compared to $21 million two years prior, and thedivision posted $7.7 million in net income in 1998, compared to a$144,000 net loss the year prior. The division operates sevengenerating facilities with aggregate capacity of 192 MW and holdsequity interests in 115 MW. In addition, it has four gas-firedmerchant plant projects in various stages of development with anaggregate 1,700 MW of capacity.
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