Houston

Representatives of the major utility industries, natural gas,electricity and telecommunications, met in Houston this week tojointly address Y2K issues. Gary Gardner, chief information officerof the American Gas Association (AGA) cited interlocking activitiesas the basis for the meeting. For instance electricity powers manyof the pipeline compressor stations that keep the natural gasflowing. “Although gas companies have manual overrides that can beused in the event of an electrical power shortage or outage, fieldpersonnel posted at the compressor stations will rely ontelecommunications devices to communicate with their headquarters.

Houston-based Seagull Energy Corp. said it garnered about $52.5million in gross proceeds from asset dispositions made during thefinal months of 1998. The money will be used to cut debt.

“That’s what 20 inches of snow in Chicago will do for you,” aHouston-based producer said Monday in reference to the severeholiday weekend blizzard in the Midwest that propelled cash pricesupward by 20 cents or more at many points. What was being calledthe region’s worst winter storm in more than three decades leftfreezing temperatures across the eastern three-fourths of thenation and very strong heating load.

Florida Power Corp. has joined in the flurry of new energyprojects spurred by this summer’s record-setting heat wave, filingplans with the Florida Public Service Commission to accelerate thebuilding of a second generation unit at its Hines Energy Complex inPolk County. The unit will provide additional capability to meetgrowing demand for electricity well into the next century. Thecompany has offered to absorb construction costs for the plant inits current customer rates.

The stock merger of Kerr-McGee and Oryx Energy creates the No. 4U.S. independent producer with market capitalization of $4 billionand is symptomatic of an industry pushed headlong intoconsolidation by sharply depressed oil and gas prices.

ARCO announced a major cost reduction program last week thatwill chop $500 million in before-tax expenses and 900 employeesfrom it operations over the next two years. The majority of thecut-backs, $350 million, are expected in 1999.

Arthur L. Smith resigned as chairman and CEO of Torch EnergyAdvisors Inc. effective immediately. Smith joined the Houston-basedcompany June 1, 1998 from John S. Herold Inc. Torch PresidentKenneth E. White Jr. said the board of employee-owned Torch andSmith “concluded that their operational and strategic differenceswould best be resolved by going in separate directions.” Torchintends to focus on providing outsourcing services and capital tothe upstream oil and gas industry. Smith plans to focus his effortson personal energy investments in North America, the company said.Torch founder J.P. Bryan became senior managing director.

Technology and deregulation are viewed as the preeminent driversfor change in the energy industry by executives speaking last weekin Houston at the 17th congress of the World Energy Council.Indeed, change – of the fast-paced and relentless variety – seemedto be regarded as a given by most at the congress.

Amoco announced a gas discovery in the Cotton Valley Reef Trendnorth of Houston. The company said it expects to bring its No. 1 J.W. Vanderbeek on production this month. Amoco holds a strongposition in the Cotton Valley Reef Trend, with drilling rights inmore than 100,000 acres, primarily in Leon County. Amoco has acontract with Koch Midstream Services to use their pipelines in thearea to gather the gas for treatment and delivery to marketsthroughout the Texas Gulf Coast region.