Examine

The Department of Interior’s Minerals Management Service (MMS)must carefully examine the option of including promising areas inits new 5-year leasing plan that have been subject to moratoria inthe past, the National Ocean Industries Association (NOIA) said.

Analyzing and following industry “best practices” can helponshore gas producers reduce operating costs and achieve greateroperating efficiency. Two studies recently completed by Ziff EnergyGroup suggest producers in South Texas and the Midcontinent can dowell by turning to their peers for advice.

Marketers hoping to capitalize on the deregulating energymarketplace would be wise to examine the strategies used in otherderegulated businesses, according to a paper by The Paladin Group.Paladin said energy marketers could fail by repeating mistakes ofthe past.

Union Pacific Resource has reiterated its intention to examine apossible sale of its gas gathering and processing business orselected non-core assets as part of a “deleveraging” programfollowing its recent $3.5 billion purchase (including assumption ofdebt) of Norcen Energy. At the time of the Norcen deal, UPR said itintended to sell $500-$700 million in assets to cut its debt toequity ratio, which ballooned to 73% following the Norcen deal fromabout 40%. But the company has valued its midstream assets, whichare located in Texas, Louisiana, Wyoming and Colorado, at about $2billion. The assets produced about $150 million in pretax operatingincome in 1997. The company has 25 operating plants and relatedpipeline facilities. A UPR spokesman said the company is justbeginning to evaluate its options but noted the market formidstream assets has been hot. UPR’s announcement follows similarplans announced recently by Aquila Gas Pipeline and EquitableResources. “These assets have been selling at a much higher cashflow multiple than E&P assets.”

FERC has scheduled a public conference for April 15-16 toexamine the future of ISOs in administering the electrictransmission grid on a regional basis. The Commission isconsidering whether policy changes are necessary “in order topromote competition and reliability in bulk power markets.”