Houston

A room full of producers was asked yesterday in Houston whetherthey would contract to sell gas for $3.00 for 10 years, adjustedfor inflation. Only a small smattering of hands went up. Clearly,optimism has returned to the industry.

The recent sale of one million shares of Tom Brown Inc. stock toan undisclosed investor garnered Lakewood, CO-based KN Energy about$29 million in cash and should help the company digest itsacquisition of Kinder Morgan Inc.

Houston-based Reliant Energy Services Inc. will supply most ofthe gas needed by the Los Angeles Department of Water and Power(LADWP) and maximize the municipal utility’s gas assets. A one-yearagreement calls for Reliant Energy to provide a minimum of 9Bcf/year as well as administer the department’s interstate gastransportation agreements. The gas to be purchased is worth about$25 million.

The $2.5 billion acquisition of Poco Petroleums Ltd. of Calgarywould give Houston-based Burlington Resources Inc. (BR) a Canadianpresence and make the gas-focused company the third largest holderof gas reserves in North America. BR already ranks first among U.S.independent producers in terms of proved U.S. reserves. Late Mondaythe companies announced the stock and debt deal.

Cross Timbers Oil Co. of Fort Worth, TX, continues to grow itspresence in the Arkoma Basin with an acquisition from Houston-basedOcean Energy Inc. Ocean Energy agreed to sell its working interestin certain properties in the Arkoma Basin in Arkansas and Oklahomato Cross Timbers for about $235.3 million, which will be used toreduce debt. The transaction, which is subject to customary closingconditions, is scheduled to close by mid-September.

Southern Mineral Corp. of Houston sold its interests in theBrushy Creek Field in Lavaca and Dewitt counties of Texas to ANRProduction Co. for $15.2 million. Closing on the Texan Gardensfield has been extended for up to 30 days. The company earmarkedmost of the proceeds for cutting bank debt. Southern Mineral is anoil and gas acquisition, exploration and production company thatowns interests in oil and gas properties along the Texas GulfCoast, Canada and Ecuador. The company’s principal assets includeinterests in the Big Escambia Creek field in Alabama and the PineCreek field in Alberta, Canada. The company is listed on the NasdaqNational Market under the symbol SMIN.

Northern Border Partners of Houston can thank its recentlycompleted expansion for significant gains in net income andthroughput on Northern Border Pipeline in the second quarter. Thecompany posted a 26% increase in second quarter net income to $20.6million. That compares to $16.4 million for the same period in1998. The increase is primarily attributable to the completion inDecember of Northern Border’s Chicago Project, which increasescapacity by more than 40% and plays a key role in gastransportation to the upper Midwest.

Nuevo Energy, a Houston, TX-based exploration and productioncompany, bolstered its California position Tuesday by paying Texaco$61 million for interests in six oil and gas fields. Includingthese acquisitions, 87% of Nuevo’s total reserves and productionwill be based in California.

El Paso Power Services Co., a subsidiary of Houston-based ElPaso Energy, agreed to buy the interests of PSEG Global and ENPEXCorp. in the Newark Bay Cogeneration Partnership in a deal worthmore than $100 million and expected to close as early as July thismonth.