Copyright 2000 The Buffalo News
The Buffalo News
July 28, 2000, Friday, FINAL EDITION
SECTION: BUSINESS, Pg. 7C-
LENGTH: 394 words
HEADLINE:
NATIONAL FUEL'S EARNINGS INCREASE 22% IN QUARTER
BYLINE: DAVID ROBINSON; News Business Reporter
BODY:
Rising oil and
natural gas prices helped National Fuel Gas Co. increase its
third-quarter profits by 22 percent, the Buffalo-based energy company said
Thursday.
The higher energy prices, coupled with a 20 percent increase
in oil production stemming from National Fuel's acquisition this spring of a
Canadian oil producer, led to sharply higher earnings from the company's oil and
gas exploration and production business.
National Fuel's utility and
timber businesses also strengthened their earnings, while its international
operations narrowed its losses and losses at its energy marketing business
widened. The earnings improved even though the company had an $ 8.3 million
after tax charge against its profits to reflect a drop in the value of options
used by National Fuel as part of its hedging program.
National Fuel
officials said the charge reflects the value of the options contacts at the end
of June, when natural gas prices were peaking. Because gas prices have fallen
considerably since then, the value of those contracts had rebounded by about $ 4
million by the end of last week.
National Fuel's profits rose to $ 14.5
million, or 36 cents per share, from $ 11.8 million, or 30 cents per share, a
year ago.
Earnings from its exploration and production business more
than doubled to $ 6 million because of the higher oil and natural gas prices,
coupled with the increase in production from the Tri-Link Resources Ltd.
acquisition last month. The options-related charge trimmed about $ 4.8 million
from the business' earnings.
The company's utility business increased
its profits by 60 percent to $ 5.6 million, mainly because last year's profits
were depressed by costs associated with an early retirement incentive and a
state mandated gas restructuring reserve fund.
National Fuel's timber
business doubled its earnings to $ 1.2 million because of higher log and lumber
sales. Profits at its pipeline and storage business rose 4 percent to $ 7.3
million, partly because of lower operating costs.
The company's
international operations trimmed its loss to $ 1.4 million from $ 2.5 million a
year ago because of lower operating costs and a higher payment on the sale of a
previous project. Its energy marketing business lost $ 4 million, mostly because
the options-related charge chopped $ 3.4 million off its earnings.
GRAPHIC: Buffalo News; Graphic-Profits improve
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