Business

Hanover Compressor completed its previously announced acquisition from Schlumberger Ltd. of the Production Operators Corp. natural gas compression business as well as ownership interests in certain joint venture projects in South America and related assets for $761 million. Schlumberger received $270 million in cash, $150 million in long-term subordinated notes and 8.7 million shares of newly issued restricted Hanover common stock having a nominal value of $283 million. It also is entitled to receive a distribution of up to $58 million upon the occurrence of certain events relating to one of the joint ventures acquired by Hanover in the transaction. Hanover management reconfirmed its belief that the transaction will add annual revenue and EBITDA of at least $200 million and $90 million, respectively, within one year. As a part of a five-year alliance, Schlumberger has agreed to hold its ownership stake in Hanover for at least three years. In addition, Hanover has agreed to add a senior executive of Schlumberger to its board of directors. The initial designee is Rene Huck, president of reservoir evaluation and development for Schlumberger Oilfield Services. The transaction considerably enhances Hanover’s position in the global compression services and gas handling industry, significantly extends its reach and anticipated growth in large, newly opened markets overseas, and adds 900,000 hp to its compression fleet and an additional 800,000 hp through the South American joint ventures. “We believe this accretive multi-faceted transaction will generate strong revenue growth for Hanover over the next five years,” said Hanover CEO Michael J. McGhan.

Houston-based El Paso Corp. increased its earnings per share (EPS) in the second quarter by 36% with earnings up from all of its business segments, topping analysts’ predictions despite the downturn in commodity markets of late. EPS were $0.79 compared with an adjusted $0.58 in the second quarter of 2000. Second quarter adjusted net income also jumped 40% to $413 million, compared with an adjusted $294 million for the same period a year ago.

Houston-based El Paso Corp. increased its earnings per share (EPS) in the second quarter by 36% with earnings up from all of its business segments, topping analysts’ predictions despite the downturn in commodity markets of late. EPS were $0.79 compared with an adjusted $0.58 in the second quarter of 2000. Second quarter adjusted net income also jumped 40% to $413 million, compared with an adjusted $294 million for the same period a year ago.

President George W. Bush, addressing business leaders and Gov. Gray Davis in Los Angeles Tuesday, delivered a public and unmistakable ‘no’ to price caps as a way out of the western energy crisis, and called for an end to finger-pointing. “Blame shifting is not action,” Bush said. “It is distraction.”

Texaco Energy Systems Inc. has teamed up with Reliant Energy Power Systems to develop a space-age sounding energy system for residential and business use. TESI plans to tailor its existing fuel processing technology for REPS’ proton-exchange-membrane (PEM) fuel cell system prototype. Called the “fuel reformer,” the system would deliver personal power to homes and businesses during peak demand periods.

Texaco Energy Systems Inc. has teamed up with Reliant Energy Power Systems to develop a space-age sounding energy system for residential and business use. TESI plans to tailor its existing fuel processing technology for REPS’ proton-exchange-membrane (PEM) fuel cell system prototype. Called the “fuel reformer,” the system would deliver personal power to homes and businesses during peak demand periods.

Rep. Lindsey Graham (R-SC) Wednesday unveiled legislation seeking to promote nuclear power as a viable energy source by making it eligible to receive the same benefits as other zero emissions power generating facilities and spurring utilities to complete unfinished nuclear reactors, among other things.

Enron Energy Services (EES) continued on its quick pace of business in 2001 as it reported that it has entered into two long-term agreements to manage energy supplies with large retailers last week. EES will manage the energy needs for all of Saks Inc.’s store locations, distribution facilities and administrative offices in 39 states. EES also teamed with J.C. Penney Co. to cover the acquisition of about $600 million in energy-related commodities for its retail locations. Terms of the Saks deal were not disclosed.

Enron Energy Services (EES) continued on its quick pace of business in 2001 as it reported that it has entered into two long-term agreements to manage energy supplies with large retailers over the last two days. EES will manage the energy needs for all of Saks Inc.’s store locations, distribution facillities and administrative offices in 39 states. EES also teamed with J.C. Penney Co. to cover the acquisition of about $600 million in energy-related commodities for its retail locations. Terms of the Saks deal were not disclosed.