Corporate

The panache of a “AA+” rating of the corporate parent by Standard & Poor’s Ratings Service apparently has failed to win over doubters, after UBS Warburg Energy switched off its online energy trading system (formerly EnronOnline) and announced it will terminate nearly all of its 380 Houston-based employees. Those not fired will be offered jobs in a UBS office in Stamford, CT, the company said Wednesday.

In the oil services sector, corporate earning estimates are down in 2003 while stock valuations are moving up — the first signs of an uptick in the cycle, which will lead to meaningful increases in the next 12 months as natural gas prices rise, according to analyst Marshall Adkins in Raymond James’ Stat of the Week.

With embattled CFO Andrew Fastow and other corporate executives joining him, Chairman Kenneth Lay attempted to answer yet again the growing list of questions that are swirling around Enron Corp.’s third quarter announcement of equity reductions and related-party transactions. However, it seemed in the end that listeners were still hungry for more information on the Houston-based company’s balance sheet, as well as its plans to stop the slide in stock prices.

Williams cut another 110 Tulsa employees Wednesday, including 60 from energy marketing and trading and 50 from corporate operations. So far, about 300 Williams marketing and trading employees have lost their jobs this year leaving about 500-550 today. Another 70 from the company’s London office are likely to suffer a similar fate early next month.

Williams Cos. took on more water Tuesday as Standard & Poor’s (S&P) lowered the energy giant’s corporate credit rating two notches to “BB+” (junk bond status) from “BBB.” The move followed the company’s second quarter outlook released Monday, which precipitated a stock price drop-off to a 20-year low in trading that day, and sparked speculation that cash-strapped Williams could become the target of a takeover (see Daily GPI, July 23). Williams Cos. stock closed at $1.19 after an 82-cent (40%) plummet in Tuesday’s trading.

Williams Cos. took on more water Tuesday as Standard & Poor’s (S&P) lowered the energy giant’s corporate credit rating two notches to “BB+” (junk bond status) from “BBB.” The move followed the company’s second quarter outlook released Monday, which precipitated a stock price drop-off to a 20-year low in trading that day, and sparked speculation that cash-strapped Williams could become the target of a takeover (see Daily GPI, July 23). Williams Cos. stock closed at $1.19 after an 82-cent (40%) plummet in Tuesday’s trading.

Standard & Poor’s Rating Services on Monday lowered its long-term corporate credit ratings of Dynegy Inc. and its subsidiaries to “BB” from “BBB-“, reflecting the company’s increased use of secured financing that “places the unsecured debtholders at a disadvantage.” The Houston-based company’s ratings also will remain on CreditWatch with negative implications. The “erosion in Dynegy’s core merchant energy business has become more pronounced,” S&P said of its rating. “Despite cutbacks in capital expenditures and costs savings, including a reduction in the common dividend payout, needed incremental cash flow has been slow to materialize.”

Standard & Poor’s Rating Services on Monday lowered its long-term corporate credit ratings of Dynegy Inc. and its subsidiaries to “BB” from “BBB-“, reflecting the company’s increased use of secured financing that “places the unsecured debtholders at a disadvantage.” The Houston-based company’s ratings also will remain on CreditWatch with negative implications. The “erosion in Dynegy’s core merchant energy business has become more pronounced,” S&P said of its rating. “Despite cutbacks in capital expenditures and costs savings, including a reduction in the common dividend payout, needed incremental cash flow has been slow to materialize.”

A Williams corporate spokesman said Thursday a Kern River bulletin board report, saying Jonah Field equipment problems had caused restrictions on field throughput to the Opal Plant operated by affiliate Williams Field Services, was in error. “There was a nominations snafu,” the spokesperson quoted a WFS dispatcher as saying, but no equipment problem. The plant was processing about 650 MMcf/d Thursday, which was pretty typical throughput, he said. Total Opal capacity is 730 MMcf/d.