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In an effort to build a larger customer base, cut costs and offer a wider variety of commodities and services, Indiana Energy, parent of Indiana Gas, announced plans to merge with Sigcorp, the holding company for Southern Indiana Gas and Electric (Sigeco). The merger of equals will create a new $1.9 billion holding company called Vectren Corp.

Apache Corp. dramatically grew its asset base and shiftedattention away from its poor first quarter financial performancelast week by buying 22 fields in the Outer Continental Shelf of theGulf of Mexico (GOM) from Shell for $715 million and one millioncommon shares of stock. The acquisition will go into effectretroactive to March.

Combating its poor first quarter performance, Houston-basedApache Corp. dramatically grew its asset base Thursday, paying $715million and transferring one million common shares of stock toShell in exchange for 22 fields in the Outer Continental Shelf ofthe Gulf of Mexico (GOM). Apache expects the transaction to add 20cents/share of value in 1999. The acquisition will go into effectretroactive to March 1.

A group of 27 LDCs Monday proposed eliminating thestraight-fixed variable (SFV) rate design for all interstatepipelines in favor of a rate design for base or “recourse” servicethat recovers 35% of a pipeline’s fixed costs in the usage rate.

Midcoast Energy Resources Inc. grew its Texas asset base withthe acquisition of two gathering systems in two separate dealsworth a combined $4.55 million. Midcoast bought the Mendotagathering pipeline and processing plant from Seagull Energy Corp.for $3.75 million in cash. The Mendota facilities are in RobertsCounty, TX, and include about 35 miles of gathering pipeline, a 10MMcf/d cryogenic gas processing plant and compression facilitieswith a combined 2,400 horsepower. The system gathers gas from morethan 70 active wells and has a total throughput of 7,200 Mcf/d. TheMendota pipeline is located adjacent to the Anadarko system, whichMidcoast purchased from El Paso Energy Corp. in September 1998, andMidcoast plans to integrate the operations of the Mendota andAnadarko systems. Also as part of the transaction, Seagull hasdedicated production from all of its existing acreage in the areato Midcoast for the next five years.

Washington Water Power’s (WWP) energy marketing affiliate,Avista Energy, embarked on a two-day expansion spree last week byacquiring Vitol Gas and Electric Co. and Coast Pacific ManagementCo., and in the process became a top-10 power marketer. Supportingthese additions is WWP’s joint venture with Cogentrix Energy Inc.,announced Dec. 11, to build or buy gas-fired electric generationprojects in the Pacific Northwest. Terms for deals were notdisclosed.

In a surprise move announced Monday CMS Energy reached southfrom its Michigan distribution base to buy the Panhandle Easternand Trunkline Gas pipeline companies — pipes, storage and LNGterminal — from Duke Energy, solidifying its own supply line tothe Midcontinent and Gulf.

A newly released Gas Research Institute study examining theshift in perceptions of the U.S. gas resource base, titled”Changing Perceptions Of Remaining U.S. Conventional GasResources,” discusses how the move — from the shortage mentalityof the 1970s to today’s view that gas is abundantly available –has resulted from an interplay of factors. Factors discussedinclude increased exploration success rates in frontier plays,improved gas well recoveries and continued reserve appreciationactivity in existing fields. GRI, with Energy and EnvironmentalAnalysis Inc. of Arlington, VA, developed the study.