In the aftermath of selling its bulk energy marketing arm,Consolidated Natural Gas (CNG) said it plans to shift its focus toCNG Producing, its New Orleans-based E&P arm, which willsignificantly increase over-all oil and gas production next year asthree key offshore pipeline projects come into operation. Much ofthe increase is expected to come from its production activities inthe Gulf of Mexico.
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Sempra Buys CNG’s Wholesale Gas Portfolio for $48M
Consolidated Natural Gas Co. followed through on its plan toexit wholesale energy marketing yesterday by selling its gasmarketing operations, including supply, sales, storage andtransportation agreements, to Sempra Energy for $48 million.
ConEd Buying O&R Utilities for $790 Million
Consolidated Edison and Orange and Rockland Utilities agreed tomerge with ConEd acquiring all the common stock of O&R for$58.50 per share in a deal worth about $790 million. O&R wouldbecome a wholly owned subsidiary of ConEd. The transaction would beaccounted for as a purchase and is expected to be accretive toConEd’s earnings per share after the first year.
CNG Earnings Hit By Wholesale Exit
As expected, Consolidated Natural Gas’ (CNG) decision to exitthe wholesale marketing business showed up in first quarterresults. Warm weather and lower wellhead prices also took some ofthe blame for the reduced earnings. CNG reported 1998 first quarteroperating income down $35 million, or about $0.31/share. Net incomewas down $94 million, or $0.92/share.
Citing Thin Margins, CNG Abandons Wholesale Market
Consolidated Natural Gas (CNG) blamed thin margins for its exitfrom wholesale marketing and trading to focus on retail. The shiftin strategy comes on the heels of the March announcement CNG willtake a $20 to $25 million loss in Energy Services to close outelectricity positions. The move could herald the beginning of amarketer shakeout, noted one analyst.
Winter Home Energy Consumption Down
Consolidated Natural Gas Co.’s CNG Energy Index calculatedresidential heating and cooling energy needs averaged 7.7% belownormal for the country over the winter heating season (Nov. 1-March31). There were wide variations across the country, however, withabove normal energy needs in the Southwest and Lower MississippiValley.
Industry Briefs
Consolidated Edison announced it plans to sell two-thirds (5,500MW) of its New York City electric generation plants in an auctionstarting this summer. Its plants will be divided into threebundles. Each bundle will include a major generating facility-theRavenswood Generating Station in Long Island City, the AstoriaGenerating Station in Astoria, or the Arthur Kill Station on StatenIsland-and gas turbine generating facilities in Queens andBrooklyn. The company plans to sell two of the bundles throughauction and retain the remaining bundle, which has not yet beenidentified. It expects to receive authorization from the New YorkState Public Service Commission (PSC) by July 1. The auctionprocess would begin later that month, with the winning bidders tobe announced in January 1999.