Reserved

Union Pacific Resources Group sold its interests in theWattenberg area of Colorado’s Denver-Julesberg Basin toDenver-based United States Exploration Inc. for $41 million. Theproperties, which are in Adams, Arapahoe, Elbert and Weld counties,consist of 336 producing wells, which produced about 5.5 MMcf/d ofgas and 640 barrels of liquids/d in 1997. UPR retained its royaltyinterest in the properties. The transaction closed May 15 and waseffective Jan.1.

NGC Corp. and Texaco signed a memorandum of understandingyesterday to create a new joint venture company that will useexisting gas liquids pipelines to create a 290-mile, bi-directionalnatural gas liquids (NGL) transportation system, extending fromSorrento, LA, to Mont Belvieu, TX.

NGC Corp. struck its first wholesale electric marketing alliancewith an electric utility in a deal with Florida Power Corp. (FPC).The alliance would capitalize on developing wholesale energymarkets in Florida and other regions, NGC said. It combines theenergy marketing, trading and risk management skills of NGC withthe current power marketing capabilities and over 8,500 MW of powersupply assets of Florida Power. The alliance will allow NGC and FPCto offer wholesale customers in Florida and the southeast a fullspectrum of wholesale power services, and maximize theopportunities for commercial management of FPC’s generation assets.

GFI Energy Ventures of Los Angeles, Caminus Energy Ltd. ofCambridge, England, SS&C Technologies, Oaktree CapitalManagement and RIT Capital partners plc are combining forces toform GFI Caminus, a new enterprise that will provide comprehensiveconsulting services and software technology to the power and gastrading industry.

Lomak Petroleum and Domain Energy Corp. said they will merge toform a company with a reserve base of nearly 1 Tcf in gasequivalents, reserve life of 12 years and extensive development andexploration opportunities. The company to be created will be calledRange Resources Corp. and will have total assets exceeding $1.1billion.

The amount of nuclear plant capacity that has been eitherpermanently shut down or has been slated for closure in the Midwestand Northeast will create a potential new market of up to 1.55 Tcfper year for natural gas in those two regions, according to anupdated Washington International Energy Group (WIEG) study due tobe released Wednesday.

MichCon announced plans yesterday to give all of its 1.2 millionretail gas customers a choice of suppliers over the next threeyears. The Detroit-based distributor filed an application with theMichigan Public Service Commission for the program earlier thisweek. It is designed to begin next January with 225,000 customers.The plan also would reduce gas costs by 7% to $2.95/Mcf and freezethem for three years for those customers who continue to useMichCon as their gas provider.

The less-than-sensational first quarter earnings reported byPacific Enterprises, holding company of Southern California Gas,were reflective of the thinner margins that have so farcharacterized the transition to restructured energy markets fornatural gas and electricity. In brief, the regulated utility isproducing all of the earnings; the unregulated businesses are stillproducing only red ink.

Consolidated Natural Gas (CNG) blamed thin margins for its exitfrom wholesale marketing and trading to focus on retail. The shiftin strategy comes on the heels of the March announcement CNG willtake a $20 to $25 million loss in Energy Services to close outelectricity positions. The move could herald the beginning of amarketer shakeout, noted one analyst.