Divestiture

El Paso Corp. added a little more flavor to its $2.25 billion divestiture plan for next year, pinpointing three major locations — the Gulf of Mexico, Midcontinent and the Rocky Mountains — as areas where assets will be sold by the second quarter of 2002. The plan, part of a massive overhaul by the management team within the past few days, comes as El Paso shores up its balance sheet triggered in part by Enron Corp.’s bankruptcy and a host of other problems that have hit the energy industry this year.

The terrorist attack on New York delayed a shareholder vote on Montana Power Co.’s planned sale of its gas and power distribution business to NorthWestern Corp. for $602 million in cash and assumption of $488 million in debt. The vote was scheduled to take place on Friday at 1:30 p.m. at the Mother Lode Theater in Butte, MT, however the New York company in charge of tabulating the votes was affected by the terrorist attacks. In addition, the New York Stock Exchange was closed and isn’t expected to open until today.

The terrorist attack on New York has delayed a shareholder vote on Montana Power Co.’s planned sale of its gas and power distribution business to NorthWestern Corp. for $602 million in cash and assumption of $488 million in debt. The vote was scheduled to take place on Friday at 1:30 p.m. at the Mother Lode Theater in Butte, MT, however the New York company in charge of tabulating the votes was affected by the terrorist attacks. In addition, the New York Stock Exchange is closed and isn’t expected to open until Monday.

Yankee Energy System, part of the Northeast Utilities system, has completed the divestiture of several non-regulated energy development businesses.

To meet its divestiture requirements and pay down some debt,American Electric Power Co. said it will sell a 500 MW naturalgas-fired plant in Texas to TECO Power Services for $265 million incash. Columbus, OH-based AEP was required by the Federal EnergyRegulatory Commission to sell the Frontera facility, located nearthe Texas-Mexican border, to complete its Central and South WestCorp. merger.

After being on the divestiture road for almost a year andshedding $3 billion worth of non-core assets, TransCanada PipeLinesLtd., reported that its first nine months of 2000 and third quartershowed progress over the equivalent time periods of 1999. Netearnings before asset sales and long-term natural gas contractlosses were $433 million ($0.91 per share) for the first ninemonths of 2000, compared to $402 million ($0.86 per share) duringthe same period last year. The company attributed the 8% increaseto higher income from the power and gas marketing businesses aswell as reduced financial and preferred equity charges. Beforeadding special items, the company posted third quarter net earningsof $151 million ($0.32 per share), compared to $141 million ($0.30per share) for the third quarter of 1999.Deliveries of natural gason the Canadian Mainline and the BC system were approximately thesame for the first nine months of 2000 and 1999. The CanadianMainline delivered about 7.3 Bcf/d for both periods, while the BCsystem delivered approximately 1.1 Bcf/d. The Alberta system didexperience a decline. For the first nine months of 2000 itdelivered an average of 12.2 Bcf/d, compared with the same periodduring 1999 when it delivered 12.4 Bcf/d. Marketing also stumbled abit, as the company marketed about 6.1 Bcf/d for the first ninemonths of 2000, compared to 6.6 Bcf/d for the first nine months of1999. TransCanada took a beating on some long-term natural gascontracts it had entered into to support various pipelineinvestments and other business initiatives. Due to growing naturalgas demand in Alberta, and excess pipeline capacity leaving theprovince, the price differential between the Western CanadaSedimentary Basin and eastern market areas continued to shrink.TransCanada was forced to enter into third party arrangements tocrystallize the negative value of its long term natural gascontracts and the company reported taking a $124 million after-taxcharge associated with the losses.

Significant strategic changes at Enron, including the sale ofEnron Oil & Gas and planned divestiture of Portland GeneralElectric, made the headlines in 1999, but its traditionaloperations more than carried the company flag.

Significant changes to Enron’s corporate structure, includingthe sale of Enron Oil & Gas and planned divestiture of PortlandGeneral Electric, made the headlines in 1999, but its traditionaloperations more than carried the company flag. Enron posted awhopping 37% increase in net income to $957 million and an 18% risein earnings per share to $1.18 for the year. Its revenues rose 28%to $40 billion and its marketed volumes jumped 19% to 32 trillionBtue/d. North American gas sales volumes reached 13 Bcf/d up from10.6 Bcf/d while U.S. power sales fell slightly to 380.5 millionMWh from 401.8 million MWh in 1998.

The Federal Trade Commission (FTC) approved the merger ofDominion Resources Inc. and Consolidated Natural Gas Co. (CNG)provided Dominion divests CNG subsidiary Virginia Natural Gas Inc.(VNG) to alleviate anticompetitive effects. Dominion, throughsubsidiary Virginia Power, accounts for more than 70% of allelectric power generation capacity in the Commonwealth of Virginia.CNG, through its ownership of VNG, is the primary distributor ofgas in southeastern Virginia. The proposed acquisition is valued atabout $5.3 billion.