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Despite a stinging second quarter net income loss of $17.3million, or $0.07 per share, compared to last year’s second quarternet income of $74 million, or $0.30 per share, Union PacificResources noted the addition of Norcen Energy assets helped pushdiscretionary cash flow up 20% ($56 million) to $332 million ($1.34per share). Producing property volumes increased to nearly 2.8Bcf/d, a 72% increase over the same period last year. The drop innet income was a result of lower commodity prices, higherexploration expenses and interest expense from the Norcenacquisition, UPR said. Included in the company’s second quarterresults were a pre-tax gain of $26 million on the sale of DJ Basinproperties, a settlement of gas supply agreements which addedpre-tax income of $30 million and an $11 million pre- tax gain on aforeign currency exchange.

Positive contributions from gathering, processing andinternational activities helped boost El Paso Energy’s secondquarter earnings to $0.45/share, an increase of 22% from $0.37 in2Q97. Earnings before interest and taxes increased to $149 millionfrom $139 million in the year ago quarter.

Cash prices emerged from the weekend with widespread gainsMonday. Most were of the small-to-medium variety at 2-6 cents, buta scorching West tended to see a lot of double-digit increases. SanJuan Basin and the Southern California moved in near-lockstep,rising about a quarter each. However, a basis relationship gap ofnearly 50 cents between the two points remaineduncharacteristically wide compared to traditional levels,reflecting the inroads made by Canadian and Rockies supplies intothe California market in recent years.

The usual slump in weekend demand and moderating weather hadcash prices softening Friday, but for the most part losses weresurprisingly small considering how weak the market had seemed inthe face of record-setting heat waves earlier in the week. The onlyreally big declines hitting double digits occurred at opposite endsof the U.S.: Transco Zone 6 citygates in the Northeast, andCalifornia and San Juan Basin numbers in the Southwest.

The futures market rebounded Friday, recapturing some of thelosses registered earlier in the week as light position squaringearly in the day gave way to moderated short-covering ahead of theweekend. That left the August contract above the critical $2.00level, closing up 8.3 cents at $2.031.

A decision by the 10th Circuit U.S. Court of Appeals giving theSouthern Ute Indian tribe rights and royalties to natural gasproduced on about 200,000 acres in the San Juan Basin of Coloradopotentially could be used as a precedent impacting 2.4 millionacres of producing properties in six Western states, AmocoProduction Co. said last week.

The Maine Public Utilities Commission is allowing several gasdistribution companies to compete to provide new service tomultiple areas in the state. The commission approved, subject tocertain conditions, the formation of CMP Natural Gas by CentralMaine Power and Energy East Corporation (parent company of New YorkState Electric & Gas) last week and gave it authorization toplan gas distribution services in the Augusta, Waterville, Bangor,Windham, Bethel, Bath/Brunswick and the southern coastal areas, allof which would be receiving gas service for the first time.

A 14% increase in electric sales and the absence of $70 millionin merger-related costs (posted in 2Q97) sent Duke Energy earningsper share soaring 77% during the second quarter to 76 cents/share,well above analysts’ estimates. Duke reported earnings for commonstock of $274.4 million compared to $157.6 million in 2Q97.

While admitting that proliferating pipeline projects arecreating a tall order for marketers, the Canadian natural gascommunity is not only talking optimistically – it is acting onexpectations that its hopes for increased exports will come true.