Development

Dynegy announced the second phase of development on theCalcasieu Generation Project, a gas-fired peaking facility nearLake Charles, LA. The addition of a 165 MW combustion turbine willbe completed during the second quarter of 2001, bringing the powerplant’s total generating capacity to a nominal 320 MW. Constructionon the initial 155 MW phase began during the fourth quarter of1999. Commercial operation will begin on June 1, 2000. “We’vedecided to expand the facility’s generating capacity in order tomeet the rapidly growing demands of the wholesale energy market inthe state of Louisiana and throughout the Southeast. If marketconditions warrant, this site could potentially see furtherexpansion beyond 2001,” said Steve Bergstrom, Dynegy president andCOO. The Calcasieu Generation Project is constructed on a 20-acresite within the Rose Bluff Industrial Area near Lake Charles. Gaswill be delivered through Koch Gateway and Sabine Pipe Line.Transmission access for power transactions will be delivered via a230-kV Entergy Services transmission line. In addition, Dynegyannounced it signed a five-year power purchase agreement with ClecoCorp., a regional energy services company based in Pineville, LA,to supply up to 310 MW of capacity and energy. The majority will besupplied by the Calcasieu Generation Project.

Gulf Midstream Services (GMS), a partnership between KeySpanEnergy Development Co. (KEDC) and Gulf Canada Resources, enlargedits Canadian midstream presence yesterday by announcing anagreement to buy Barrington Petroleum’s 38% interest in the PaddleRiver gas plant and related gas gathering systems. The $9 millionpurchase gives the partnership 76% interest of the only plant thatwill be directly connected to both the ATCO Pipeline system and theAlliance Pipeline.

Still up for sale, Mitchell Energy & Development Corp. beatanalyst earnings forecasts by 25% in the fourth quarter with netearnings of $35.3 million. This compares to a net loss of $47.3million in the prior-year period. The prior period’s loss wascaused by low commodity prices and included after-tax charges of$46.9 million for asset impairments and personnel reduction. Thecurrent quarter’s results included a $0.7 million after-taxreversal of previous litigation provisions.

Mitchell Energy & Development Corp. announced it enteredinto a letter of intent to purchase Conoco’s 50% interest in theJameson processing plant and an associated 2,600-mile West Texasgas gathering system for an undisclosed sum. The Permian Basinplant and facilities currently are owned evenly by Conoco andMitchell.

Mitchell Energy & Development Corp. announced it enteredinto a letter of intent yesterday to purchase Conoco’s 50% interestin the Jameson processing plant and the associated 2,600-mile gasgathering system for an undisclosed sum. The plant, located in WestTexas, is currently owned evenly by Conoco and Mitchell.

Prosper Business Development Corp., a Columbus, OH-basedconsulting and marketing firm, released an addendum to a previousreport on deregulating energy markets yesterday, citing a new listof pitfalls in the changing energy environment. The report,”Accelerating Energy’s Challenge to Change,” is intended to enhanceenergy marketers’ profitability as they enter deregulating markets.

Don’t put your duct tape and plywood away just yet. The lull inthe Atlantic hurricane season finally broke last week with TropicalStorm Bret and Tropical Depression Four throwing a one-two punch tothe gas market and triggering a more than 30-cent jump in NymexHenry Hub futures prices, which broke $3 early on Friday.Meanwhile, the National Oceanic and Atmospheric Administration(NOAA) and renowned Colorado State University forecaster Dr.William M. Gray both recently reiterated their predictions that thehurricane season will be a whopper despite the early lull.

Mitchell Energy & Development Corp. said the rebound inenergy prices raised its second quarter average gas pricerealizations 30% and pushed gas liquids price realizations up 25%compared to first quarter amounts. Combined with cost cutting gainsand other operating efficiencies implemented over the past year,Mitchell said the improvements should result in quarterly earnings(excluding oil and gas property sales) that will be three timesgreater than the First Call consensus estimate of 13 cents pershare.

Mexico’s energy regulatory commission (CRE) has defined a newgas distribution geographic zone and put out a call for bids fordevelopment of a distribution system expected to cost about $35million. The system will serve the region of North Bajio includingmunicipalities Aguascalientes-Jesus Maria-San Francisco de losRomo, Aguascalientes; San Luis Potosi-Soledad de Graciano Sanchez,San Luis Potosi; and Zacatecas-Guadalupe, Fresnillo, Calera andMorelos, Zacatecas.