Revises

Reliant Resources Inc. (RRI), wobbling as a stand-alone retail and wholesale services company, last week said it had identified a series of four more related natural gas financial swap transactions that should not have been recorded. The transactions decreased RRI net income by $13 million in 2000 and increased net income by the same amount in 2001. After meeting with its independent auditors and the Securities and Exchange Commission, RRI determined that a restatement would not be required, but it will file an additional footnote disclosure as an amendment to its 2001 Form 10-K/A.

Reliant Resources Inc. (RRI), wobbling as a stand-alone retail and wholesale services company, revealed Tuesday that a review of its energy trading activities has identified a series of four related natural gas financial swap transactions that should not have been recorded.

Despite affirming its “BBB+” rating on Dallas-based TXU Corp., Standard & Poor’s Ratings Services (S&P) said that it has revised the outlook for the electricity and gas provider and its subsidiaries to “negative” from “stable.” The rating agency pointed out that the company has about $18.7 billion in debt outstanding.

Mexico’s state oil and gas monopoly Petroleos Mexicanos (Pemex) last week revised downward its estimates of proven natural gas and crude oil reserves. It also revised its unaudited financial statements for 2000 and 2001, following a review by the U.S. Securities and Exchange Commission (SEC).

Mexico’s state oil and gas monopoly Petroleos Mexicanos (Pemex) on Monday revised downward its estimates of proven natural gas and crude oil reserves. It also revised its unaudited financial statements for 2000 and 2001, following a review by the U.S. Securities and Exchange Commission (SEC).

With a brief explanation in its Securities and Exchange Commission (SEC) 10-Q filing, Duke Energy Corp. in late August reduced the before-tax earnings of its Duke Energy North America (DENA) unit by $17 million, and cut another $2 million from other units that were associated with the trading unit in the second quarter.

September natural gas futures spiked all the way up to $2.80 from $2.67 in about five minutes Thursday morning after the Energy Information Administration (EIA) reported a 33 Bcf storage injection, which was well below most expectations (centered on 45-50 Bcf). EIA also issued a downward revision for its data from the previous week. Despite the bullish news, however, the September contract managed only an 8.5-cent gain for the day and closed at Tuesday’s high of $2.745, leaving some observers unconvinced that the downtrend is over. October gained 8 cents, ending the day at $2.784 and the winter strip rose 5.7 cents to $3.46.

Coming as no surprise Thursday, Aquila Inc., which shut down its marketing and trading business earlier this week (see Daily GPI, Aug. 7), reported a loss of $5.69 per share for the second quarter, compared to earnings per share of $1.21 in the second quarter of 2001. The troubled Kansas City-based company took its lumps on its Quanta Services investment, company restructuring and lower commodity trading volumes and prices.

Calpine Corp., the San Jose, CA-based power plant developer, announced last week that it increased its credit line to $2 billion and has downsized its aggressive natural gas turbine-buying program by up to $3 billion over the next two years. The reaction from Fitch Ratings was to lower the ratings on Calpine’s senior unsecured debt from BB+ to BB and the company’s convertible trust preferred from BB- to B, but also to remove its “watch negative” rating.