With almost $800 million in debt payments due and its cash nearly depleted, Williams put together a mega-deal that will not only pay the bills, but ensure its liquidity through several cash and credit transactions totaling about $3.4 billion. New credit agreements were secured giving Williams about $2 billion, but to make those deals, Williams sold or guaranteed some of its solid income-producing assets — interests in two pipeline companies, Seminole and Mid-American, for $1.2 billion; natural gas properties in Wyoming for $350 million; gas properties in the Anadarko Basin for $37.5 million; and the Cove Point liquefied natural gas (LNG) facility for $217 million. Williams also backed a secured credit agreement, which was put together by Warren Buffett’s Berkshire Hathaway Inc., with “substantially all” of the assets of subsidiary Barrett Resources.
Daily GPI
Articles from Daily GPI
Duke Energy Admits to Engaging in 89 Round-Trip Trades
Duke Energy told federal regulators Thursday that it participated in 28 round-trip trades over the IntercontinentalExchange (ICE) trading platform, or five more than it previously disclosed in early July in an initial report. All of the sham energy transactions apparently were designed to boost trading volumes, according to the company.
SoCalGas Boosts Intrastate Capacity by 375 MMcf/d, But Demand Vanishes
Southern California Gas (SoCalGas) has bolstered its intrastate pipeline system with four expansions this year, adding 375 MMcf/d. The 11% increase in capacity was done to better prepare for extreme demand conditions, such as those of 2000-2001. Unfortunately, however, gas demand is expected to drop by 500 MMcf/d this year and by another 250 MMcf/d in 2003.
BP’s Browne Pledges $15 Billion to GOM Deepwater Development
BP CEO Lord Browne said Thursday that the company expects to spend at least $15 billion during the next ten years on deepwater natural gas and oil exploration, development and production activities in the Gulf of Mexico. Speaking at the Houston Forum, Browne said the bulk of expenditures will be spent drilling wells and developing fields that have already been discovered.
Exxon Mobil, Shell See Earnings Drop from 2Q 2001
Exxon Mobil Corp. and the Shell Group of companies had some good news and some bad news for their shareholders Thursday. The good news: they made a profit. The bad news: for each of them it was about 38-39% less than last year. Mitigating factor: last year’s 2Q set a record. The culprits: lower gas and oil prices and a drop in refinery returns.
Devon’s Revenues and Production Rise Overshadowed by 2Q Income Drop
Despite reporting record high second quarter oil and gas production and revenues, Oklahoma City-based Devon Energy Corp. said that lower oil and natural gas prices caused net earnings to fall below year-ago levels. In addition, “sharply lower” gas prices in Canada also resulted in a non-cash full cost ceiling adjustment of $371 million, net of an income tax benefit.
Peoples Energy Addresses ICC’s Trading Investigation
Responding to news accounts of a motion to compel that the Illinois Commerce Commission (ICC) staff recently filed as part of an annual review of gas purchasing practices for fiscal year 2001, Peoples Energy CEO Thomas M. Patrick said that the review involving the utility Peoples Gas “will show that the company conducted its business prudently and that none of our practices increased costs to customers.” He added that the case is on a typical procedural schedule that would bring it to conclusion early in 2003.
FERC Gives Green Light to Build Wisconsin Leg of Guardian
The Federal Energy Regulatory Commission on Wednesday gave Guardian Pipeline LLC the green light to begin construction on the Wisconsin portion of the 142-mile pipeline that will serve growing gas markets in the upper Midwest. Construction on the northern Illinois part of the line already is in process, according to Guardian sponsors.
Aquila: Dynegy’s Financial Trouble Could Derail Cogentrix Deal
Aquila. Inc. said late Wednesday that the recent credit ratings downgrades of Dynegy Inc., “together with other adverse circumstances and events, have decreased the likelihood” that its acquisition of privately held Cogentrix Energy can be completed as planned. Aquila charged that the downgrades by Standard & Poor’s, Fitch Ratings and Moody’s Investors Service “are expected to cause a Dynegy subsidiary to default under a sizeable agreement to purchase power from a Cogentrix subsidiary, calling into question the Aquila-Cogentrix agreement.”
Reliant Says Spin-Off on Track Despite Moody’s Downgrade
Reliant officials said the credit rating downgrade of subsidiary Reliant Resources (RRI) to junk status by Moody’s Investor Service Wednesday would not impact the proposed spin-off of RRI later this summer. The spin-off was approved Wednesday as a tax-free action by the Internal Revenue Service (IRS), but must be completed in six months. Reliant said the downgrade was inappropriate but expected given the state of the industry. Reliant shares fell 5% Wednesday to $10.06, and RRI shares tumbled 19% to $4.62.
