Previously

MCN Energy Group Inc. completed the previously announced sale ofits share of the Midland Cogeneration Venture Limited Partnership(MCV) in Michigan. Subsidiaries of Coastal bought MCN’s 23% interestin MCV for an undisclosed amount said to be near book value. MCV wasdesignated as a Qualifying Facility (QF) under the federal PublicUtility Regulatory Policies Act of 1978, or PURPA. PURPA requiresutilities to purchase power from QFs at the utilities’ avoided cost ofproducing power. MCN is selling its interests in three other QFs inanticipation of its pending merger with DTE Energy Co. (see Daily GPI,Oct. 6).

UtiliCorp subsidiary Aquila Energy renamed its gas assetdevelopment group Merchant Energy Partners. It previously was knownas Natural Gas Partners. The change follows a recent reorganizationin which Aquila realigned its asset development activities, placingboth gas and power asset development under one executive. Thecompany will use Merchant Energy Partners for both its gas andpower asset development groups. V.J. Horgan is president of MEP andan Aquila Energy senior vice president.

Markets in Atlantic Canada and New England won’t be getting anextra gas supply source as soon as previously expected. Maritimes& Northeast Pipeline LLC informed FERC this week that both530/360 MMcf/d Canadian/US pipeline project (Phase II) and theSable Offshore Energy Project (SOEP), which will be the source ofsupply for the pipeline, will not be in service on schedule.

Markets in Atlantic Canada and New England won’t be getting anextra gas supply source as soon as previously expected. Maritimes& Northeast Pipeline LLC informed FERC this week that both530/360 MMcf/d Canadian/US pipeline project (Phase II) and theSable Offshore Energy Project (SOEP), which will be the source ofsupply for the pipeline, will not be in service on schedule.

Previously stalled by depressed commodity prices, MitchellEnergy & Development Corp. is flying right again with 12%return on equity in exploration and production, 15 to 20% ingathering and 55 to 60% in natural gas liquids (NGLs), according toone analyst. For Chairman, CEO and gas and oil industry veteranGeorge P. Mitchell, 80, now might be the time to bail out.

Shareholders of Kinder Morgan, Inc. and KN Energy, Inc. approvedthe terms of the previously announced $925 million merger of thetwo companies. Ninety-eight percent of KN stockholders who voted onthe transaction approved a proposal to issue 41.5 million shares ofKN common stock pursuant to the terms of the merger agreement.Additionally, ninety-seven percent of KN shareholders votingapproved a proposal to amend the company’s articles ofincorporation to change the name of the company to Kinder Morgan,Inc. upon completion of the merger. Stockholders of Kinder Morgan,Inc., a privately held company, also approved the merger. RichKinder, chairman and CEO of Kinder Morgan and future CEO of thecombined company said the merger remains on track to be completedin early October. The planned merger will combine the generalpartner of the largest independent refined products pipelinecompany in the U.S. with one of the largest natural gas pipelineoperators.

After previously estimating that an outage of most production onMatagorda Offshore Pipeline System due to a line leak would last untilnext Wednesday (see Daily GPI, Sept. 10), MOPS operator Northern NaturalGas said leak repairs were completed Friday morning, two days afterthe outage began. Only about 15 MMcf/d remained shut in, a spokesmansaid, and that was expected to be restored late Friday afternoon.

MCN Energy followed through as planned on the previously announcedsales of its Midcontinent/Gulf Coast exploration and production(E&P) properties and subsidiaries. Undisclosed privately heldcompanies paid about $105 million for the assets, which are primarilylocated in Texas and Oklahoma. Proceeds from the sales will helpstrengthen MCN’s balance sheet by reducing its debt. At year-end 1998,these Midcontinent/Gulf Coast assets represented 144 Bcfe of reserves,or 12% of the 1.2 Tcfe of proved reserves on MCN’s books. About 80% ofthe reserves sold were gas. MCN announced earlier in August that,consistent with its new regional, operating strategy, the company willretain its natural gas producing properties in Michigan (see Daily GPIAug. 3). Negotiations continue on theremaining Appalachian E&P package.

Unocal Corp.’s Spirit Energy 76 unit completed the previously announced trade of most of its Rocky Mountain oil and gas assets to Tom Brown Inc (See NGI March 15, 1999). Unocal received 5.8 million shares of Tom Brown common stock (about 16.5%) and $5 million for the properties. The deal is worth about $76 million. Subject to certain restrictions and conditions, Unocal has the option to increase its stock ownership up to 19.5% through open market purchases. The sale agreement also entitles Unocal to nominate one director to the Tom Brown board.