Woes

Baker Hughes and Schlumberger plan to create a new seismicventure called Western GECO that would combine and own the seismicacquisition assets, data processing assets, and multi-clientseismic libraries and other assets of their existing subsidiariesWestern Geophysical and GECO-Prakla. The transaction is expected tobe completed before the end of the year and is subject toregulatory approvals. Upon formation of the venture, Baker Hugheswould receive from Schlumberger $500 million in cash. Thetransaction would also allow Baker Hughes to make certain workingcapital and asset reductions valued at $100 million. Baker Hughesand Schlumberger would own 30% and 70% of the venture,respectively. The companies have made filings under theHart-Scott-Rodino Antitrust Improvements Act of 1976, and areresponding to requests for additional information from theDepartment of Justice. In addition, Baker Hughes and Schlumbergerintend to make additional filings with regulatory authorities incertain European and other countries.

Despite being labeled the main cause of California’s powermarket woes by the Governor, independent power producers say theyare willing to cooperate with any investigation by the FederalEnergy Regulatory Commission (FERC) into the wholesale powermarket.

Two retail marketer bankruptcies in Georgia and the legislativeand regulatory retrenchment in California should take most of theblame for the slowdown in gas deregulation nationwide, according toMarie Lihn, principal economic analysis manager for the GasTechnology Institute (GTI) (see related stories this issue). Anationwide preoccupation with electric restructuring has not helpedthe gas cause either, she said in an interview regarding a new GTIstudy on gas deregulation.

Two retail marketer bankruptcies in Georgia and the legislativeand regulatory retrenchment in California should take most of theblame for the slowdown in gas deregulation nationwide, according toMarie Lihn, principal economic analysis manager for the GasTechnology Institute (GTI). A nationwide preoccupation withelectric restructuring has not helped the cause either, she said inan interview regarding a new GTI study on gas deregulation.

Despite large increases in both operating income and income fromcontinuing operations, Columbia Energy Group’s 1999 bottom lineregressed from 1998, as a hostile takeover bid from NiSourcecombined with severe losses caused by Columbia’s marketingoperations to undermine the company’s overall performance.

Those bemoaning the lackluster performance of integrated gas andutility stocks can blame their woes, at least in part, on theInternet and the technology revolution, according to one analyst.Prudential Securities’ Carol Coale said investors have beenshifting their attention, and their dollars, from the “old economy”to a new one. “Whether it’s Internet or high-tech, we’re seeing amajor sector shift,” she told NGI. Also to blame, Coale said in aPrudential research note, is bearish gas market sentiment.

Those bemoaning the lackluster performance of integrated gas andutility stocks can blame their woes, at least in part, on theInternet and the technology revolution, according to one analyst.Prudential Securities’ Carol Coale said investors have beenshifting their attention, and their dollars, from the “old economy”to a new one. “Whether it’s Internet or high-tech, we’re seeing amajor sector shift,” she told Daily GPI. Also to blame, Coale saidin a Prudential research note, is bearish gas market sentiment.

The woes of Philadelphia’s main gas utility, Philadelphia GasWorks (PGW), have grown to embarrassing levels as computer systemproblems, debt, and customer unhappiness continue to dominate thescene. The situation came to a head last week, as the hierarchy ofPGW testified before the Philadelphia Gas Commission during publichearings of the utility’s budget process.

No major headway was made in resolving the jurisdictionalchallenges associated with the proposed TriState Pipeline projectduring a FERC technical conference on Tuesday, according to a majorsponsor of the project.