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OIL PATCH INSIDER
Blunder — what blunder? TransAlta closes Annapolis office TransAlta, Canada’s largest investor-owned power generator, has booted a trader and closed down its Annapolis, Md., trading office.
But don’t think for a minute that the decisions stemmed from an earlier goof by the office that cost TransAlta a pre-tax charge of C$33 million for the second quarter.
“It is unrelated to the bidding error situation,” Chief Executive Officer Steve Snyder told a conference call July 24.
TransAlta Executive Vice President Thomas Rainwater insisted “it really was more of a strategic business decision” and had nothing to do with a “witch-hunt.”
The Calgary-based company disclosed in June that human error at the Maryland office resulted in an electronic filing of bids to transit power in the New York market that misaligned rows of data on a spreadsheet, boosting the bid to 15 times the amount of transmission it required.
Analysts expected some fallout, but Snyder insisted that the employee saddled with the blame “was not terminated because of that error” and will receive a severance package, along with 19 others who have departed or soon will. Four others will be relocated.
He said the Maryland trading operations will be moved to Calgary as a cost-cutting measure and to improve efficiency.
Meanwhile, TransAlta is under more fire in the United States, with the Federal Energy Regulatory Commission ordering it to answer allegations that it manipulated western U.S. energy prices during 2000 and 2001.
“We continue to believe we followed all rules and regulations at the time and that we are well-reserved against potential damages,” Snyder said. New RCA chair named Mark Johnson was elected chair of the Regulatory Commission of Alaska at the commission’s June 25 meeting. He succeeds Dave Harbour who was elected earlier this year to finish the term of Nanette Johnson when she resigned.
Under commission rules, the chair can serve a maximum of three consecutive years. Johnson’s term runs from July 1 through June 30, 2004.
Harbour, Johnson and Kate Giard were appointed to the commission by Gov. Frank Murkowski. James Strandberg and Nanette Thompson also serve on the five-member regulatory body.
Sold before they’re bought?
Aside from some very impressive numbers, Denver-based Evergreen Resources’ second quarter earnings conference July 30 produced one tidbit of news that should interest today’s acquisition-oriented market.
CEO Mark Sexton said Evergreen had received an offer to buy the U.S. properties of Denver-based Carbon Energy. Evergreen announced it was acquiring Carbon Energy in March. The $90 million deal is expected to close in August, provided the U.S. Securities and Exchange Commission clears the merger.
Carbon’s Canada and U.S. properties are expected to contain a total of 88 billion cubic feet of gas.
Oil Patch Insider is compiled by Paula Easley and Kay Cashman with news coming from a variety of sources. If you have a news tip or press release for Oil Patch Insider, please email [email protected], phone (907) 245-2297, or fax (907) 522-9583.
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