CMS Energy would boost its presence in the Midcontinent with thepurchase of Continental Natural Gas for $155 million. The companiesagreed for CMS to acquire 100% of Continental’s common stock andassume Continental debt. The deal is worth about $90 million indebt and $65 million in equity for an approximate total value of$155 million. The agreement is subject to Continental shareholderapproval, and majority shareholders have said they favor it.Closing is expected early in the fourth quarter.
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Positive contributions from gathering, processing andinternational activities helped boost El Paso Energy’s secondquarter earnings to $0.45/share, an increase of 22% from $0.37 in2Q97. Earnings before interest and taxes increased to $149 millionfrom $139 million in the year ago quarter.
The futures market received an early boost from hot weatherspreading up the East coast and a strong over-the-counter marketMonday morning, but the buying ebbed sending Nymex spiraling lowerthroughout the day. “We shot up to $2.20 in a hurry, but the marketcould offer no follow-through above that level. At that point itwas a where-do-we-go-from-here mentality and the answer to thatquestion was down,” an analyst said. That left the August contractoff 7 cents to $2.095.
With the exception of Western and Rockies delivery points,natural gas prices began the new week flat or leaning downward acouple of cents. There was support resulting from supplyconstraints in the San Juan Basin and forecasts for above normaltemperatures in the Rockies. However, cash prices for the rest ofthe country appeared to be held back by a weakening Nymex futuresscreen and moderate temperatures in major northeastern markets,sources said.
Aside from a mostly weather-related boost to cash prices inCalifornia and a supply-related recovery in San Juan prices, Juneincremental trading finished its last trading session flat to downa couple of cents almost across the board. Moderating temperaturesin areas experiencing record setting readings over the weekend andreduced end-of-month activity resulted in the minor softness.
Heavy air conditioning load and a tightening of supplyavailability not only generated a late rebound in bidweek pricesFriday but also pushed up last-of-May and early June aftermarketnumbers in nearly all Eastern, Gulf Coast and Midcontinent/Midwestmarkets. Waha and Permian Basin gas, supported by Texas andMidcontinent cooling demand, also was rising above index levels.But in the generally cool West, weekend and 1st-of-month swingprices tended to go down by a few cents.
Monday’s cash trading found support from record hightemperatures in the South and El Paso’s Blanco compressor stationoutage but were kept in check by softening futures prices. Mostspot market points managed modest gains of about 3-5 cents.Southwestern and Rockies points, however, logged gains of nearly adime.
Bammel Natural Gas Storage and its connections to Houston PipeLine are due for a major upgrade, Enron announced yesterday. Thecompany plans to drill four new storage wells and construct a12-mile, 30-inch diameter pipeline adjacent to an existing HPL linethat will increase Bammel’s withdrawal capacity nearly 20% to 1.4Bcf/d. The $28 million project is designed to enhance services forHPL’s Texas Gulf Coast industrial markets and Houston-based gasutilities, Enron said. It is expected to be completed by year end.