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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (14757)	1/12/1999 2:50:00 AM
From: Kerm Yerman	Read Replies (6) \| Respond to of 15196

IN THE NEWS / Lost Hills Update JAN. 9, 1998 The Bakersfield Californian LOST HILLS - Crews working to stop the flow of natural gas, light oils and water from a blown out well near this western Kern County town will try to finally stop the uncontrolled flow on Monday. A crew from Halliburton Co. will try to pump cement into the well to stop the flow, said Jim Fox, principal of Driltek of Bakersfield, who is supervising the control operations. It the procedure works, a relief well now passing 12,000 feet will become a replacement well for the failed drilling effort. The Halliburton crew is using a “snubbing unit,” which allows access to out of control well bores, in the attempt. The well, which blew out and caught fire Nov. 23, blazed for nearly two weeks before water flowing from deep underground put out the fire. A diverter assembly was then installed, and the water is being trucked off and the gas flared. Previous Update: techstocks.com Previous Related Stories bakersfield.com Operator's News Releases 192.139.81.46@dockeyword... Market Reaction (changes daily) techstocks.com

To: Kerm Yerman who wrote (14757)	1/12/1999 3:31:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

IN THE NEWS / Canada Energy Board Staff Appear Set To Strike CALGARY, Jan 11 - Almost a third of the employees at Canada's National Energy Board, the country's main energy regulator, are ready to walk off the job over a wage dispute later on Monday and both sides held out little hope of a settlement before the deadline. The union local representing 105 of the NEB's 280 Calgary-based staff said it planned to start a series of rotating strikes by Tuesday after talks aimed at reaching a wage settlement broke off over the weekend. A board official acknowledged energy companies requiring its services could expect delays and reduced service in the case of a strike, but that major regulatory hearings, such as one over an export natural gas pipeline slated for early next week, would proceed. The NEB is responsible for such energy industry regulatory activities as approving oil and gas pipeline projects and natural gas exports. "We'll be implementing a number of rotating strike exercises that we can commence as early as midnight tonight (Mountain time/0200 EST/0700 GMT Tuesday)," said George Kealey, president of the Public Service Alliance of Canada union local representing the workers. The union staff, which hold such positions as clerks, communications officers and pipeline inspectors, have been without a contract since March 1998. Kealey said the wages of the employees, which are on the Canadian federal government payroll, have been frozen for seven years. Union members voted 92 percent in favor of giving their bargainers a strike mandate. The board refused to accept a conciliator's recommendation of a 2 percent wage hike in the first year of a new contract and a 2.5 percent increase in the second year, he said. He also said the board balked at providing pay equity to female staff, which comprise 80 percent of the unionized workers. "Friday and Saturday we put in the better part of two full working days with these people and all they offered us was a shell game -- moving the same money in and out," Kealey said. "It was just like shuffling the deck chairs on the Titanic." Board spokeswoman Sylvia Farrant said her side was willing to resume talks, but noted the union walked away from the table and it was up to its negotatiators to make the first move. "We would have expected they would have tried to contact us today and they haven't. We've certainly made ourselves available to them," Farrant said. A hearing over the proposed Vector gas pipeline from Chicago, Illinois to Dawn in southern Ontario slated to start in London, Ontario next Monday would proceed regardless of the labor dispute, she said. "Our goal is to maintain normal services. All the hearings have been reviewed and contingency plans have been put in place. All the hearings are to prceed as normal," Farrant said.

To: Kerm Yerman who wrote (14757)	1/12/1999 3:53:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / More Tough Times Predicted For Canadian Oil Sector CALGARY, Jan 11 Difficult times for Canadian energy companies are set to get tougher as the industry struggles for another year with low oil prices, constrained capital spending and less drilling, a Canadian brokerage predicted on Monday. Calgary-based FirstEnergy Capital Corp. cut its outlook for benchmark West Texas Intermediate oil in 1999 by $1 a barrel to $15. It also forecast wells drilled in western Canada would fall by 18 percent from 1998 and more than 50 percent from 1997. This year's predicted 8,373 wells in the western provinces and territories would be the lowest number since 1993. "The implications are that it's grim news for oil and gas service companies that are levered to drilling activity, particularly those that are levered to oil drilling activity," said FirstEnergy analyst John McAleer, who prepared the report. Oil and gas drilling and service contractors, which depend on the shrinking producer spending for their livelihoods, saw revenues decline throughout 1998 as oil prices fell to their lowest levels in 12 years. Canadian oil service stock prices were hit even harder than those of the producing companies during the last year, falling 66 percent from their high in the autumn of 1997. Companies struggling through the tough times include such names as Precision Drilling Corp. <PD.TO>, Ensign Resource Service Group Inc. <ESI.TO> and CE Franklin Ltd. <CFT.TO> FirstEnergy said it believed capital spending among producing companies would decline 17 percent this year from 1998 levels to C$14.4 billion. A strong outlook for natural gas prices -- the brokerage's average Canadian gas price outlook remains at a healthy C$2.55 per thousand cubic feet -- would mean an 18-percent increase in producer cash flow to C$14.6 billion. However, lower predicted equity financing levels and some debt repayment among companies were expected to translate into the reduced spending, it said. Of the total number of wells drilled this year, just 1,999 were expected to be oil wells. That would be the lowest number since 1991 and a 32 percent drop from 1998. Despite strong gas prices, reduced capital spending would result in 6,447 gas wells drilled, down 12 percent from last year, FirstEnergy said. McAleer pointed out that 1998 gas production in Canada would come in at about flat with 1997 levels because of reduced drilling activity. He said less drilling this year would likely mean reduced output and even higher Canadian prices. Despite the gloomy prediction for average 1999 oil prices, the reduced production will likely cause a lessening of the current glut, not only in Canada but throughout the world. Prices would gradually rise throughout the year as a result. "We think it will be driven from a lack of supply worldwide and (Canada) is kind of a microcosm of that."

To: Kerm Yerman who wrote (14757)	1/12/1999 4:34:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

IN THEW NEWS / Lasmo Plc & Enterprise Oil Talks Signal E&P Pain LONDON, Jan 11 (Reuters) - Lasmo Plc <LSMR.L> and Enterprise Oil Plc's <ETP.L> merger talks show the intensity of the pain inflicted on the exploration and production industry by the collapse in oil prices, analysts said on Monday. Analysts are forecasting $11-14 a barrel for Brent crude in 1999, after the $9.55 12 year low plumbed in 1998. At that forecast level, E&P companies, mostly U.S. and UK groups, are not profitable. An operating "breakeven" price is seen at $7-9 a barrel, but that assumes no investment in a very capital intensive industry -- and therefore a sector doomed to shrink or be swallowed. "At these prices they (E&P companies) are not financially competitive. That means they are not generating cashflow, paying competitive dividends or delivering satisfactory returns on capital", said E&P specialist Tim Whittaker at Commerzbank. Keith Palmer, vice chairman of investment banking at Rothschild and a specialist in the oil industry agrees. "Bluntly, if oil prices remain at current, very depressed levels for much longer, the smaller E&P companies have a very bleak future", he said in a recent presentation. So the pressures for E&P groups to run into each other's arms are real -- but analysts note big is not necessarily beautiful and not every combination will create a more financially competitive model. Analysts are not convinced a Lasmo-Enterprise combination would deliver. A tie-up might be seen as a desperate attempt to ward off predators and put a floor under plummeting market value, rather than a plan to produce significant cost saving synergies, they said. Enterprise's assets in the North Sea and other developed zones do not overlap now with Lasmo's more far flung empire in Libya, Pakistan and Venezuela "any more than they did in 1994", when Enterprise failed in a 1.5 billion pound takeover bid for Lasmo, one expert said. Even in the UK, there is no real fat to trim, because Lasmo more or less abandoned its London operation with a cost cutting move involving 200 job cuts late last year. "It's hard to see where the synergies are", said Barney Gray of Williams de Broe. "You have to wonder about what the motivation is". Another UK-based analyst said "The combined group would just make a bigger oil company. They are still going to be in the same financial condition". Lasmo Chief Executive Joe Darby said only last week that "making E&P companies twice as large does not necessarily create more value". Integrated oil companies can survive sustained oil price weakness, protected by the vertical integration that offers a trade off on refined products as well as by their size, analysts said. Many have the cash resources to acquire companies if they can identify value. Groups like Lasmo and Enterprise have no such protection and are vulnerable. "In the UK, investor sentiment for the E&P sector is so poor and concern about future prospects so great that acquisition for cash may be achieveable at relatively low premia over current trading values," said Rothschild's Palmer. Analysts said Lasmo and Enterprise are considered probably too small for the giants like BP Amoco and Exxon to consider, but France's Elf Aquitaine <ELFP.PA> and ENI <ENI.MI> of Italy are said to have run their eyes over Enterprise, while BG Plc <BG.L> of the UK has also been linked to the group, a former stablemate under the state-owned British Gas banner. U.S. mid-sized E&P groups among whom consolidation is already under way may be more interested in Lasmo, whose oil finding costs and asset spread are attractive relative to their own, analysts said.