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Gas News Release
April 20, 1999
Consolidated Natural Gas Reports 1999 First Quarter Earnings
PITTSBURGH - Consolidated Natural Gas Company (NYSE:
CNG) today reported that 1999 first quarter net income was $139.0 million, or
$1.44 a share on a diluted basis, compared with $138.0 million from continuing
operations, or $1.45 a share on a diluted basis, a year earlier.
Operating results this quarter benefited from double-digit
increases in oil and natural gas production, as well as from colder weather
compared with 1998 in CNG's natural gas distribution territories. However, those
benefits were offset by the effect of sharply lower oil and natural gas wellhead
prices experienced nationwide in the first quarter.
Net income for the first quarter of 1998 was $77.9 million,
or 82 cents a share on a diluted basis, which reflects the operating loss and
exit costs related to discontinuing CNG's wholesale energy trading and marketing
operations.
"CNG Producing Company, our exploration and production
subsidiary, continues its track record as one of the premier independent E&P
operators in North America," said George A. Davidson, Jr., CNG chairman
and chief executive officer. "Coming off a record-setting year for production
and reserve additions last year, we increased production in the first quarter
by a healthy 13 percent on an energy-equivalent basis compared with a year earlier."
Looking forward, Mr. Davidson noted that market prices for
oil have been rising while natural gas prices have stabilized. "We have
positioned our E&P operation not only to weather the periodic downturns
that are inherent in the industry, but also to use CNG's financial strength
to grasp opportunities that become even more valuable in good times," he
said.
Mr. Davidson also cited the work by CNG's regulated businesses
in reorganizing management along business process lines. The restructuring is
expected to result in cost savings and improved growth opportunities starting
later in 1999. Results by Business Component
Here are the 1999 first quarter results for each of the company's
business segments:
Exploration and Production
Pretax operating income for exploration and production was
$18.0 million in the first quarter of 1999, down 48 percent compared with $34.7
million a year earlier. The benefits of increased oil and natural gas production
were more than offset by the negative impact of sharply lower wellhead prices.
Production of natural gas increased by 13 percent compared
with the first quarter of 1998, to 42.4 billion cubic feet (Bcf) from 37.5 Bcf.
The increase was due in large part to CNG's new gas-rich Nautilus/Atlantis/Nemo
complex that came on production in the Gulf of Mexico in late 1998.
Production of oil increased by 11 percent compared with the
first quarter of 1998, to 2.3 million barrels from 2.1 million barrels. The
increase was due primarily to higher production from Neptune, a deepwater project
in the Gulf of Mexico.
Combined oil and gas production was 56.2 billion cubic feet
equivalent (Bcfe) in the 1999 first quarter, up 13 percent from 49.9 Bcfe a
year earlier.
The average wellhead price for CNG's natural gas production
was $2.01 a thousand cubic feet (Mcf) in the first quarter of 1999, a decline
of 49 cents an Mcf from the first quarter of 1998. CNG's average wellhead price
for oil in the first quarter was $8.76 a barrel, down from $12.49 a year earlier.
Natural Gas Distribution
Pretax operating income for the company's four local gas
utilities was $156.6 million in the first quarter of 1999, up 14 percent from
$137.6 million a year earlier. Colder weather was the chief reason for the improvement:
it was 5 percent warmer than normal in CNG's service territories for the period,
but it was 20 percent colder than the first quarter of 1998.
Distribution throughput -- the amount of gas sold and transported
-- increased by 10 percent in the first quarter, to 173.0 Bcf from 157.9 Bcf.
Natural Gas Transmission
Pretax operating income for the company's interstate gas
pipeline and storage business was $68.3 million in the first quarter of 1999,
up 11 percent from $61.5 million a year earlier. Benefits of a rate case settlement
in the 1999 first quarter were the primary reason for the improvement. These
benefits were partially offset by lower prices for liquids.
Transmission throughput in the 1999 first quarter was 252.7
Bcf, up 17 percent from 215.7 Bcf a year earlier.
Consolidated Natural Gas Company is one of the nation's largest
producers, transporters, distributors and retail marketers of natural gas. The
company's natural gas transmission and distribution operations serve customers
in Pennsylvania, Ohio, Virginia, West Virginia, New York and other states in
the Northeast and Mid-Atlantic regions. CNG explores for and produces oil and
natural gas in the United States and Canada. The company also selectively participates
in energy businesses abroad.
CNG's recent news releases are available 24 hours a day on
the Internet, by fax machine, or by voice recording. On the Internet, use CNG's
Web site: www.cng.com. For faxing, call 1-800-758-5804 on a touch-tone phone
and enter CNG's extension number, which is 203456. From a menu, you will then
be able to select releases that will be faxed to you immediately without charge.
For voice recordings, call 1-888-CNG-NEWS. This line is toll-free.
This press release contains forward-looking statements. The
company wishes to caution readers that the assumptions which form the basis
for forward-looking statements with respect to or that may impact earnings for
fiscal 1999, and thereafter, include many factors that are beyond the company's
ability to control or estimate precisely, such as estimates of future market
conditions and the behavior of other market participants. Other factors include,
but are not limited to, weather conditions, economic conditions in the company's
service territory, fluctuations in energy-related commodity prices, conversion
activity, other marketing efforts and other uncertainties.
Consolidated Natural Gas Company (CNG)
Three Months Ended March 31, 1999 1998
Total operating revenues $1,046,448,000 $999,165,000
Income from continuing operations $138,987,000 $ 138,033,000
Discontinued operations* -- $(60,138,000)
Net income $ 138,987,000 $ 77,895,000
Earnings per common share -- diluted
Income from continuing operations $1.44 $1.45
Discontinued operations* -- $(0.63)
Net income $1.44 $0.82
Earnings per common share -- basic
Income from continuing operations $1.46 $1.48
Discontinued operations* -- $(0.64)
Net income $1.46 $0.84
Average common shares - diluted 96,216,000 96,471,000
Average common shares - basic 95,385,000 93,008,000
# # #
For further information contact:
Dan Donovan
412-690-1370
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