- Earnings per share: $1.44 net vs. $1.45 from continuing operations in 1998
- Double-digit increases in oil and natural gas production, colder weather
benefit earnings
- Sharply lower wellhead prices offset positives
PITTSBURGH, April 20 /PRNewswire/ -- 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:
http://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
*Reflects operating losses and estimated costs resulting from the decision
to discontinue CNG's wholesale energy trading and marketing operations.
SOURCE Consolidated Natural Gas Company
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Related links:
http://www.cng.com
CONTACT:
Chet Wade of Consolidated Natural Gas,
412-690-1361
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