MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WEDNESDAY, FEBRUARY 11, 1998 (7)
Countries (con't)
Trinidad/Tobago
Exxon Corporation (XON/NYSE) today announced that its Trinidad affiliates have signed two Production Sharing Contracts in Port of Spain, Trinidad and Tobago, with the Honorable Senator Finbar Gangar, Minister of Energy and Energy Industries. The new Production Sharing Contracts cover Blocks 25(b) and 26 which Exxon was awarded in Trinidad and Tobago's 1997 Phase 3 Tender Round, which attracted considerable industry interest.
Blocks 25(b) and 26, located 60-75 miles (100-125 kilometers) offshore Trinidad in 2500-4300 feet (750-1300 meters) of water cover approximately 350,000 acres and 300,000 acres, respectively.
Jon L. Thompson, president of Exxon Exploration Company, said, ''We are very pleased to be back exploring in Trinidad and Tobago. We look forward to working with the Ministry of Energy and Energy Industries and are confident that Exxon's expertise in deepwater operations will be applied to good use over these large blocks.''
Thompson noted that Exxon's acquisition of this significant new acreage in Trinidad is part of a larger story of success in the global deepwater. ''These large Trinidad blocks add to Exxon's already substantial portfolio of deepwater opportunities in some of the most prospective frontier areas in the world,'' he said.
SERVICE SECTOR
Nothing to report
PIPELINES
El Paso Energy International Company, a business unit of El Paso Energy Corporation (NYSE: EPG - news), announced today the final agreements have been signed by the partners of an international consortium to build the 325-mile Gasoducto del Pacifico pipeline from Argentina across the Andes mountains into Chile, roughly 300 miles
south of Santiago. Construction on the $380 million project hasalready begun and the pipeline is scheduled to be in service by late 1999.
The Gasoducto del Pacifico pipeline will transport natural gas from Argentina's Neuquen province to customers in central Chile, mainly around Concepcion, a city of about one million people. The pipeline will include 325 miles of 20- and 24-inch mainline and 65 miles of 10- and 12-inch lateral lines. The initial delivery capacity of the system is estimated to be 140 million cubic feet of gas per day (MMcf/d).
El Paso Energy International, through its Triunion Energy joint venture, owns 21.8 percent of Gasoducto del Pacifico, second only to NOVA's 30 percent stake. The other partners include Chile's Empresa Nacional del Petroleo (ENAP), Compania de Consumidores de Gas S.A. (GASCO), and YPF S.A. of Argentina.
"This pipeline project is the result of a strong consortium of partners all with the common goal of linking Argentine gas supplies to millions of Chilean customers," said John Hushon, president of El Paso Energy International Company. The project not only involves a consortium of producers selling gas from Argentina into Chile, it also includes plans to transport and market gas to large industrial customers and eventually provide power generation capabilities to the region as well.
The Gasoducto del Pacifico project includes a $44 million natural gas transportation and marketing company, known as Servicios de Gas Natural (SGN), which will serve industrial customers in the region. Gas Natural del Sur, a $14 million initial investment in a commercial and residential natural gas distribution system, will serve customers in and around Concepcion.
With over $9 billion in assets, El Paso Energy Corporation provides energy solutions through five business units: Tennessee Gas Pipeline Company, El Paso Natural Gas Company, El Paso Energy International Company, El Paso Field Services Company and El Paso Energy Marketing Company. The company owns the nation's only integrated coast-to-coast natural gas pipeline system and has operations in interstate natural gas transmission, international infrastructure development, gas gathering and processing, and energy marketing. Visit El Paso Energy's web site at www.epenergy.com.
EARNINGS
Anderson Exploration Ltd. (AXL/TSE)
Message 3407198
FINANCIAL
Oxbow Exploration Inc. (OXB/ASE)
Message 3408482
Stellarton Energy Corporation (SRT.A/ASE)
Message 3408320
Scimitar Hydrocarbons Corporation (SIY/ASE)
Message 3408624
Duff & Phelps Credit Rating Co. (DCR) has reaffirmed the senior debt rating for Pioneer Natural Resources at 'BBB-'(Triple-B-Minus). The rating affects approximately $804 million in debt.
Pioneer's announced intent to divest 95 percent of its domestic fields should enhance earnings as well as refocus the operating strategy on the company's higher-potential assets. The divestitures will reduce current production by 10 percent to 12 percent, although cost savings from reduced general and administrative, lease operating and depreciation expenses are anticipated to exceed the revenue declines with the current commodity price environment. Core operating regions will be reduced from eight to five, offering operating synergies in addition to the reduced costs. It should also be noted that 85 percent-90 percent of the current reserve base will be retained.
Exploration will continue to be limited to 25 percent of Pioneer's capital expenditures. However, with the divestiture of a portion of the reserves, exploration will receive increased emphasis as a vehicle for reserve growth. Management must show that it can grow the company with international and domestic exploration despite a track record that has been primarily based upon domestic acquisition and exploitation. The exploration staff has been significantly increased and improved toward this end.
Proceeds from the transaction will be used to reduce debt and to pursue a $200 million common stock repurchase program. Management intends to maintain the current level of financial flexibility and balance sheet strength. Capital expenditure plans for 1998 have been reduced to $500 million from $600 million to reflect the anticipated decline in short- term cash flows. The share repurchase program will also be restricted to available cashflows from operations and proceeds from the divestitures, which are in excess of the planned expenditures.
MISC.
Calibre Energy Inc. will be featured today on the Market in Profile segment of Canada's Business Report. President and Chief Executive Officer Dean Smith is the invited guest. Canada's Business Report is the nation's leading radio business program heard on Talk 640 in Toronto (6:30 p.m.), CKGL 570 AM in Kitchener (6:30 p.m.), CKTB 610 AM in St. Catharines (6:30 p.m.), and CIQC 600 AM in Montreal (5:00 p.m.).
Approximately 30 will be participating in An Exhibition of Junior Public Companies hosted by Small Cap Communications. This event will be held in Calgary at The Metropolitan Centre 333 - 4th Avenue SW, February 17th, 1998 and in Edmonton at The Centre Suite Hotel 10222 - 102 Street, February 18th, 1998. Event sponsors include Canada NewsWire, The Calgary Sun, The Edmonton Sun and QR 77 Talk Radio.
The Owners Companies of the Sable Offshore Energy Project will celebrate a significant milestone in the development of Nova Scotia's offshore natural gas reserves at a public function at the World Trade and Convention Centre, 1800 Argyle Street, Halifax, on February 11, 1998. The function will begin at 2pm in the Port Royal Room. Attendees will include the Premier of Nova Scotia and members of the Government, representatives of owner companies (Mobil Oil Canada, Shell Canada Limited, Imperial Oil Resources Limited, Nova Scotia Resources Limited, Mosbacher Operating Limited), and representatives of the SOEP Facilities Alliance.
The Financial Post is revising their web site and have currently omitted past sections. Here's their notice.
"Some regular features of this site have been temporarily removed to permit the reconstruction and refinement of the financial area. Among these are Hot Stocks, Buy & Sell, Bill Hanley's Market Eye, Patrick Bloomfield, the weekly mutual fund snapshot, Barry Critchley's column and Sector Watch."
Using this e-mail address, please send them a note letting them know that you miss these columns. swickens@canoe.ca
Quite a little "Oil & Gas Information" is provided in these columns.
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