Billion

Backed up with a C$1 billion investment to recover at least 1Tcf, PanCanadian Petroleum Ltd. said it would immediately begincommercial development on its Deep Panuke offshore natural gasfield. Located about 250 kilometers southeast of Halifax, plateausales production from the field is expected to be 400 MMcf/dfollowing startup in early 2005.

Niagara Mohawk (NIMO) shareholders last week approved an $8.9billion merger with Britain’s National Grid Group plc a couple daysfollowing a major rate reduction deal that was offered to New Yorkratepayers and regulators in exchange for approval of the marriage.

Calgary-based Berkley Petroleum Corp. continues to fend off a C$1.4billion hostile takeover bid by Hunt Oil, announcing Monday that itwill open its data rooms next week to third parties in an attempt tolure a better buyer. Hunt, an independent based in Dallas, saw itsbid rejected last week by Berkley management (see Daily GPI, Jan. 2; Dec. 29,2000).

In response to Hunt Oil Co.’s unsolicited C$1.03 billion (US$710million) offer to buy Berkley Petroleum last week, Berkley announcedthat it has put together a special committee of independent members ofthe board to consider alternatives to the takeover offer itcategorized as “opportunistic and inadequate” (see Daily GPI, Dec. 29).

Saying it was as troubled by the public remarks of Alabamaofficials as it was of the $3.4 billion judgment, Exxon Mobil firedback yesterday, refuting what it called a “personal attack” on itsintegrity. A jury trial last week found the oil company haddefrauded the state and underpaid royalties on natural gas wellleases in state waters (see Daily GPI, Dec. 20).

Exxon Mobil Corp. said it will take “all legal steps” tochallenge a record $3.5 billion verdict announced last week by anAlabama jury, which found the oil company had defrauded the stateand underpaid royalties on natural gas well leases in state waters.The case centered on charges that the energy giant had underpaid upto $87.7 million in royalties on the Mobile Bay natural gas projectin the Gulf of Mexico.

Exxon Mobil Corp. will appeal a record $3.5 billion verdictannounced yesterday by an Alabama jury, which found the oil companyhad defrauded the state and underpaid royalties on natural gas wellleases in state waters. The case centered on charges that theenergy giant had underpaid up to $87.7 million in royalties on theMobile Bay natural gas project in the Gulf of Mexico.

If any of the growing number of producers delay coal bed methanegas drilling programs in the Powder River Basin, it won’t bebecause production has dried up. Most likely, it will be delayedwhile the Wyoming Department of Environmental Quality wrangles withrequested water pollution permits required for the projects, anddebates between business and environmentalists over jobs and cleanwater.

After being on the divestiture road for almost a year andshedding $3 billion worth of non-core assets, TransCanada PipeLinesLtd., reported that its first nine months of 2000 and third quartershowed progress over the equivalent time periods of 1999. Netearnings before asset sales and long-term natural gas contractlosses were $433 million ($0.91 per share) for the first ninemonths of 2000, compared to $402 million ($0.86 per share) duringthe same period last year. The company attributed the 8% increaseto higher income from the power and gas marketing businesses aswell as reduced financial and preferred equity charges. Beforeadding special items, the company posted third quarter net earningsof $151 million ($0.32 per share), compared to $141 million ($0.30per share) for the third quarter of 1999.Deliveries of natural gason the Canadian Mainline and the BC system were approximately thesame for the first nine months of 2000 and 1999. The CanadianMainline delivered about 7.3 Bcf/d for both periods, while the BCsystem delivered approximately 1.1 Bcf/d. The Alberta system didexperience a decline. For the first nine months of 2000 itdelivered an average of 12.2 Bcf/d, compared with the same periodduring 1999 when it delivered 12.4 Bcf/d. Marketing also stumbled abit, as the company marketed about 6.1 Bcf/d for the first ninemonths of 2000, compared to 6.6 Bcf/d for the first nine months of1999. TransCanada took a beating on some long-term natural gascontracts it had entered into to support various pipelineinvestments and other business initiatives. Due to growing naturalgas demand in Alberta, and excess pipeline capacity leaving theprovince, the price differential between the Western CanadaSedimentary Basin and eastern market areas continued to shrink.TransCanada was forced to enter into third party arrangements tocrystallize the negative value of its long term natural gascontracts and the company reported taking a $124 million after-taxcharge associated with the losses.