Revealed

With an informal inquiry under way by the Securities and Exchange Commission (SEC), Reliant Resources Inc. CEO Steve Letbetter revealed last week that the company suspended an employee in its accounting department and another employee in the risk management division who apparently were involved in the company’s earnings restatement, first announced in February. Reliant Resources said earlier this month that the SEC had launched in informal inquiry, but the CEO said he was unaware of any outstanding issues.

The Federal Energy Regulatory Commission revealed last Thursday that it has set up a mechanism so its staff can closely monitor operational flow order (OFO) activity on interstate natural gas pipelines to determine whether abuses may be occurring against pipeline shippers.

Oklahoma City-based Chesapeake Energy Corp. last week revealed it has sold its Canadian subsidiary, with approximately 175 Bcfe of proved reserves, to an unnamed “large Canadian energy producer,” for $150 million. It expects to record a pre-tax gain of about $35 million in the fourth quarter as a result of the transaction.

Oklahoma City-based Chesapeake Energy Corp. on Tuesday revealed it has sold its Canadian subsidiary, with approximately 175 Bcfe of proved reserves, to an unnamed “large Canadian energy producer,” for $150 million. It expects to record a pre-tax gain of about $35 million in the fourth quarter as a result of the transaction.

KeySpan Corp. (KSE) revealed that it will be taking a $30 million after-tax second quarter charge, or 22 cents per share, against earnings to tie up some recently discovered loose ends on several construction projects of its Roy Kay Companies subsidiary, which it purchased last year. CEO Robert Catell also said the recent declines in gas and power prices have forced a downward revision in full-year results for the company.

KeySpan Corp. (KSE) revealed yesterday that it will be taking a $30 million after-tax second quarter charge, or 22 cents per share, against earnings to tie up some recently discovered loose ends on several construction projects of its Roy Kay Companies subsidiary, which it purchased last year. CEO Robert Catell also said the recent declines in gas and power prices have forced a downward revision in full-year results for the company.

Transocean Sedco Forex Inc. revealed yesterday that Marathon Oil has decided to back out of an 18-month drilling deal because it believes Transocean hasn’t lived up to its end of the bargain. The contract is for Transocean’s recently constructed, ultra-deepwater semisubmersible Cajun Express drill ship. Marathon gave notice it wants out of the deal apparently in response to incidents of downtime relating to equipment failures. Transocean said it strongly disputes that Marathon has the right to terminate the contract and intends to “vigorously pursue all available remedies.”

A study unveiled in Anchorage this week revealed that south central Alaska could face natural gas shortages in just a few years unless new reserves are found. The report, issued by the Anchorage Economic Development Corp., found that the area’s short-term energy requirements are secure, but by the end of the decade, the region will have problems in winter when energy demand is highest.

El Paso Corp.’s securities filing late last week revealed thatits Merchant Energy segment, which includes the company’s tradingand risk management functions, posted an astounding increase in2000 earnings before interest and taxes over 1999. The segmentposted $3 million in EBIT in 1999, compared with $563 million for2000.