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Gas News Release
October 19, 1999
Consolidated Natural Gas Company Reports Third Quarter Earnings
PITTSBURGH – Consolidated Natural Gas Company
today reported 1999 third quarter income from continuing operations of $10.8
million, or 11 cents a diluted share, compared with income of $5.7 million,
or 6 cents a diluted share, a year earlier. Excluding costs related to the pending
merger with Dominion Resources, Inc. of $7.7 million, or 6 cents a diluted share
after taxes, income from continuing operations in the third quarter of 1999
was $16.4 million, or 17 cents a diluted share.
Primary reasons for the increase were higher prices and higher
production in CNG’s oil and natural gas exploration and production segment.
“CNG performed extremely well in the quarter,” said George
A. Davidson, Jr., CNG’s chairman and chief executive officer. “We are on target
to achieve our goal of a 25 percent increase in production. In addition, income
in our natural gas transmission and storage segment rose 19 percent in the quarter.”
Davidson said the company expects to have all regulatory approvals for its merger
with Dominion Resources by year-end.
Results by Business Component
Here are the 1999 third quarter results for each of the company’s
business segments:
Exploration and Production
Pretax operating income for exploration and production was
$34.8 million in the third quarter of 1999, up from $18.1 million a year earlier.
The improved results were due to higher prices and increased production of oil
and natural gas from the Gulf of Mexico.
The average wellhead price for CNG’s gas production was $2.25
a thousand cubic feet, up 20 cents from a year earlier. CNG’s average wellhead
price for oil was $14.71 a barrel, up $3.45 from a year earlier.
Production of natural gas rose to 45.8 billion cubic feet
(Bcf), an increase of 9.2 Bcf, or 25 percent, from the third quarter of 1998.
Oil production rose to 2.7 million barrels, an increase of 875,000 barrels,
or 48 percent, from a year earlier. The oil increase primarily came from the
new Nautilus/Nemo/Atlantis complex in the Gulf of Mexico. Oil and natural gas
production in the third quarter of 1998 was adversely affected by four hurricanes
and tropical storms that forced temporary shutdowns of wells in the Gulf of
Mexico.
Natural Gas Distribution
The company’s four local gas utilities recorded a pretax
operating loss of $23.3 million in the third quarter of 1999, compared to a
loss of $20 million last year. A third-quarter loss for this segment is considered
normal since customers use less gas during the summer months.
Throughput increased to 54.1 Bcf from 51.8 Bcf in 1998, but
the effect was more than offset by higher operating and maintenance costs. Workforce
reduction costs related to a previously announced restructuring of CNG’s regulated
businesses also reduced 1999 pretax operating results by $1.2 million.
Natural Gas Transmission
Pretax operating income for the company’s interstate natural
gas pipeline and storage business was $36.1 million in the third quarter of
1999, up from $30.4 million a year earlier. The increase was partly due to increased
prices for natural gas by-products.
Transmission throughput in the 1999 third quarter was 109.2
Bcf, up from 104.5 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.
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.
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.
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For further information contact:
Dan Donovan
412-690-1370
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