Reveals

A survey of second quarter financial reports from 25 producersreveals a 0.5% decline in U.S. gas production compared to 2Q99. Outof 25 producers, fourteen reported lower production and basinexploration. Pioneer Resources, Ocean Energy, Union Pacific andKerr McGee showed the largest U.S. production declines.

The Inspector General of the Department of Transportation (DOT)has found severe shortcomings in the inspection practices andtraining of federal pipeline inspectors at DOT’s Office of PipelineSafety (OPS), according to a preliminary report. The unfavorableDOT report comes in the wake of a number of legislative measures onCapitol Hill seeking to reauthorize the Federal Pipeline SafetyAct.

Marking a significant increase from 1998, Burlington Resourcesestimated its replacement of reserves at 140% of total productionat a cost of 72 cents/Mcfe, the company said yesterday. Theseresults compare to 123% of replaced production at $1.10/Mcfe in1998. The bullish production news was dampened somewhat by theannouncement of a $225 million fourth quarter charge because ofperformance-related downward adjustments to some Gulf of MexicoShelf and Permian Basin assets.

A joint study to be released today reveals that the price datareported by the gas industry’s three major publications – NaturalGas Intelligence, Inside Ferc and Gas Daily – is both consistentand reliable.

Niagara Mohawk Power’s new holding company structure, which isexpected to receive regulatory approval in the first quarter of1999, will be called Niagara Mohawk Holdings Inc. William E. Davis,currently Niagara Mohawk Power chairman and CEO, will becomechairman and CEO of Niagara Mohawk Holdings. Niagara MohawkHoldings will succeed Niagara Mohawk Power as the sole entity inwhich common stock is held.