Continues

Massachusetts’ Eastern Enterprises clearly has embraced theconcept of consolidation and is doing deals to prove it. Fresh fromits acquisition of Essex County Gas, the Boston Gas parent lastweek said it will buy nearby Colonial Gas Co. for nearly half abillion in stock, cash, and assumed debt. The deal grants a 27%premium to Colonial’s closing price preceding the deal’sannouncement.

Along with disappointing 3Q earnings announced by The WilliamsCos. came an acknowledgement by management that the companycontinues to achieve disappointing results in several of itsbusinesses. With results reduced by energy market conditions and bypre-tax charges and write-downs of about $70 million, or 10cents/share, Williams reported unaudited net income of $32.1million, or 7 cents/share on a diluted basis, for the thirdquarter. This compares to unaudited restated net income of $13.7million, or 3 cents/share, for the same period of 1997, a quarterin which results were reduced by 17 cents/share for the cost ofdebt restructuring.

Along with disappointing 3Q earnings announced by Williams camean acknowledgment by management that the company continues toachieve disappointing results in several of its businesses. Withresults reduced by energy market conditions and by pre-tax chargesand write-downs of about $70 million, or 10 cents/share, Williamsreported unaudited net income of $32.1 million, or 7 cents/share ona diluted basis, for the third quarter. This compares to unauditedrestated net income of $13.7 million, or 3 cents/share, for thesame period of 1997, a quarter in which results were reduced by 17cents/share for the cost of debt restructuring.

While neighboring LDC Oklahoma Natural Gas continues its attemptto stave off unbundling, Arkla moved forward last week with acollaborative process involving stakeholders that is intended toproduce a downstream unbundling plan next April with full retailcompetition by October 1999.

Union Pacific Resources Group (UPR) continues to march aheadwith its de-leveraging program, announcing last week that it agreedto sell interests in certain South Texas oil and gas properties toCollins &amp Ware Inc. for $148 million. The sale is scheduled toclose Oct. 30, subject to conditions, with an effective date ofSept. 1.

In the wild final hours of the California state legislature’s1998 session Monday (August 31), another bill aimed at curbing theleeway of the state energy regulators was passed (Senate Bill 1757)and is now awaiting the governor’s signature. A California PublicUtilities Commission representative at the state capitol said theregulators’ remain neutral on the bill, but may take a positionwhen they meet for a regularly scheduled commission conferenceThursday (Sept. 3).

The futures market traded lower for most of the day Thursdaybefore cratering in the last 10 minutes of the trading session,leaving the market at its lowest level in years. The Septembercontract plumbed the lowest of any of the contracts, printing lowsat $1.61 just after 3:00 EST. However, an average of all tradesduring the last 30 minutes produced a final settlement of $1.672, a9-cent loss for the day and 27.5 for the week.

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The softening trend that developed about halfway through bidweekcarried over to the fledgling August aftermarket. In swing dealsdone Friday for the weekend, quotes at nearly all points were downseveral cents from index levels and often near the bottom end ofbidweek ranges.