There appears to have been a minor shake-up at the Natural GasSupply Association (NGSA) this week. It comes during Skip Horvath’sfirst week as president of the producer group that’s stillrecovering from an embezzlement scandal uncovered earlier in theyear.
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CNG Posts 2Q Loss After Large Merger Charges
Consolidated Natural Gas paid a hefty price during the secondquarter for its proposed merger with Dominion Resources. Thecompany took a one-time $165.3 million, $1.12/share, charge relatedprimarily to cash-out of stock options and awards to about 700employees and took another $6.3 million charge, $0.04/share, for aworkforce reduction related to the merger. CNG reported a secondquarter loss from continuing operations of $80 million, or 83 centsa diluted share, compared with income of $46.8 million, or 49 centsa diluted share, a year earlier. The comparison was made worse by a$13.9 million, or $0.15/share, gain in 2Q98 related to a favorableregulatory decision. Excluding special items for both periods,income from continuing operations was 33 cents a diluted share in2Q99, compared to 34 cents in 2Q98. Wall Street consensus had CNGpegged quite a bit higher at $0.39/share.
Industry Briefs
Allentown, PA-based electric utility PP&L said it set acompany record Monday for delivering summertime power. During hightemperatures and heavy humidity in central and easternPennsylvania, PP&L delivered 6,128,000 kWh of electricity tocustomers between 1 and 2 p.m. Monday. The company’s formersummertime record of 6,046,000 kWh was set July 15, 1997. PP&Lsaid it was able to set the delivery record without anyinterruption or curtailment of service to customers. In otherregional power news the New England Independent System Operatorcanceled a power warning that had been set through last night andsaid customers could resume normal power usage.
Bears Shrug Off Storage, Deposit Market Lower
After a brief uptick during the Wednesday night Access tradingsession, natural gas futures continued lower yesterday at the NewYork Mercantile Exchange and settled below key support levels. Julyfinished at $2.285, after carving out a $2.27 low early Thursdaymorning. Estimated volume of 95,938 was almost double that ofMonday and Tuesday.
Transportation Notes
TransCanada yesterday was continuing to evaluate an electronicfailure on its 36-inch Western Alberta System. A tool used duringan in-line inspection run failed. Arrival of a de-watering pig atthe Knight compressor station has been delayed until about noonmountain time today. Work on the system between the Miekle Riverand Knight compressor station in northwestern Alberta began May 31,impacting receipt capacity by about 1 Bcf/d. The system should beup to regular flows again some time by Saturday, a spokesman said.The outage had been scheduled to end June 9.
Shareholders Approve Santa Fe-Snyder Merger
The shareholders of Santa Fe Energy Resources and Snyder OilCorp. approved the merger of the two companies during specialmeetings yesterday. More than 99% of the voting shareholders ofeach company voted in favor of the merger. The new Houston-basedcombined company, which will be called Santa Fe Snyder Corp., willhave a market capitalization of $1.6 billion, with reserves of 315million boe. Combined production for 1999 is expected to be 105,000boe/d, 55% of which will be gas and 70% of which will be producedin the U.S.
Overseas Strength Boosts UtiliCorp’s Results
International operations enabled UtiliCorp United to post higherearnings during the first quarter despite sharply lower resultsfrom Aquila Energy’ midstream activities. UtiliCorp reportedearnings of $51.9 million, up from $43.3 million a year earlier.Diluted earnings per share for the quarter were $.57 in 1999compared to $.53 in 1998.
Exxon’s First Quarter Profits Down 40%
Exxon was hit and hit hard during the first quarter, posting a40% drop in profits, the company announced yesterday. Earningsdropped to $1.02 billion from $1.82 billion in 1Q98. Revenue fellto $26.884 billion from $29.964 billion in 1Q98. The results fromthe first three months of 1999 also included a $120 million chargefor restructuring Japanese operations.
Senate OKs Producer Relief; Clinton Veto Likely
The Senate unanimously passed two economic relief measures forindependent oil and gas producers last week. The bad news, however,is that the initiatives are part of a supplemental spending billthat President Clinton has threatened to veto because theexpenditures – mostly for foreign aid efforts – would cut intospending for domestic programs that he supports.
PA Gas Deregulation Bill to Meet Opposition
The Pennsylvania Gas Deregulation bill, which was introduced tothe state legislature last week, will meet steadfast oppositionduring the upcoming Senate Consumer Protection committee hearing onMarch 23. The hearing will be the first time the bill goes up fordebate.