OGE Energy Corp. Reports 1st Quarter Results

Apr 23, 2001, 01:00 ET from OGE Energy Corp.

    OKLAHOMA CITY, April 23 /PRNewswire Interactive News Release/ -- OGE
 Energy Corp. (NYSE:   OGE) today reported a loss of $0.19 a share for the three
 months ended March 31, 2001, compared with earnings of $0.01 a share for the
 first quarter in 2000.  OGE Energy is the parent company of Oklahoma Gas and
 Electric Company (OG&E) and Enogex Inc.
     OG&E, a regulated electric utility, posted a loss of $0.01 a share,
 compared with a loss of $0.04 a share for the first three months of 2000.
 Enogex, a natural gas pipeline and energy marketing company, recorded a loss
 of $0.12 a share, compared with net income of $0.10 a share in the year-ago
 period.  The holding company posted a loss of $0.06 in the first quarter,
 compared to a loss of $0.05 a share a year earlier.
     The results for OG&E and the holding company are not unusual for the first
 quarter.  Enogex's loss in the quarter was primarily due to the depressed
 operating environment for the processing and sale of natural gas liquids.  The
 fractionation spread -- the value of liquids after they are processed out of
 natural gas, compared to the price of the gas itself -- was, on average,
 negative in the first quarter.
     OGE Energy has long recognized that the natural gas liquids business is
 subject to wide variations in fractionation spreads.  Enogex, in fact, has
 often profited from liquids prices that were high relative to natural gas.
 But the recent environment of unprecedented high natural gas prices, without
 corresponding price increases in natural gas liquids, has exerted strong
 downward pressure on fractionation spreads.
     Also in the first quarter, Enogex continued to resolve the under-recovery
 of pipeline system fuel expenses, reported with fourth-quarter 2000 results.
 Enogex filed for fuel-recovery rate adjustments with the Federal Energy
 Regulatory Commission.  The impact of this issue was minimal in the first
 quarter.
     "We are disappointed with our first-quarter results, but we are actively
 addressing the issues involved," said Steven E. Moore, chairman, president and
 CEO of OGE Energy.  "Meanwhile, our electric utility is making pre-season
 preparations to meet the growing demand for power during the summer cooling
 season, when OG&E accounts for the majority of our annual earnings."
 
     Discussion of First Quarter 2001
     OGE Energy consolidated operating revenues were $1 billion in the first
 quarter, up from $582 million in the first three months of 2000.  The first-
 quarter gross margin was $217.2 million, compared with $209.5 million in the
 year-earlier quarter.  Operating income was $6.6 million in the first quarter,
 compared with $32.2 million a year earlier.  The decrease was primarily due to
 increased operation and maintenance expenses.
     At OG&E, the electric utility, first-quarter revenues were $326.8 million,
 with a net loss of $1 million, or $0.01 a share, compared with revenues of
 $245.3 million and a net loss of $3.2 million, or $0.04 a share in the
 comparable period a year earlier.  The increase in revenues was due to
 increased customer demand, as well as higher fuel costs associated with
 record-high natural gas prices.  Changes in fuel costs are automatically
 passed on to customers through regulatory adjustment clauses.  Demand was
 driven primarily by colder weather.
     First-quarter revenues at Enogex were $750.5 million, compared with
 $365.1 million a year earlier, due primarily to higher commodity prices.
 Expenses were higher as well and the net loss at Enogex was $9.6 million, or
 $0.12 a share, down from net income of $7.9 million, or $0.10 a share in the
 year-ago quarter.  The decline is attributed primarily to a reduction in
 volumes and fractionation spreads in the processing segment, higher fuel
 expenses in the natural gas gathering and transmission segment, and reduced
 margins in the energy marketing business.
     Losses at the holding company in the first quarter and the year-ago period
 were primarily due to interest and tax expenses.
 
     2001 Outlook
     OGE Energy Corp. previously projected 2001 earnings at $2 to $2.10 a
 share.  Due to narrower fractionation spreads in natural gas liquids and
 expectations that this trend will continue, the company has revised its 2001
 earnings estimate to $1.70 to $1.80 a share.
 
     Conference Call Webcast
     OGE Energy Corp. will host a conference call for discussion of the results
 and the outlook for 2001 on Monday, April 23 at 8 a.m. CDT.  The conference,
 hosted by James R. Hatfield, senior vice president and chief financial officer
 of OGE Energy, will be simulcast and archived at
 http://www.videonewswire.com/OGE/042301/.
     OGE Energy is the parent company of Oklahoma Gas and Electric Company
 (OG&E), Oklahoma's largest electric utility with 700,000 customers in a
 service territory spanning 30,000 square miles in Oklahoma and western
 Arkansas, and of Enogex Inc., a natural gas pipeline and energy marketing
 business operating one of the nation's 10 largest pipeline systems,
 principally in Oklahoma, Arkansas and Texas.
     Some of the matters discussed on this news release may contain forward-
 looking statements that are subject to certain risks, uncertainties and
 assumptions.  Actual results may vary materially.  Factors that could cause
 actual results to differ materially include, but are not limited to: general
 economic conditions, including their impact on capital expenditures; business
 conditions in the energy industry; competitive factors; unusual weather;
 regulatory decisions and other risk factors listed in the Company's Form 10-K
 for the year ended December 31, 2000 and other factors described from time to
 time in the Company's reports to the Securities and Exchange Commission.
 
     OGE Energy Corp.
     consolidated statements of income
     (unaudited)
                                Three Months Ended       Twelve Months Ended
                                     March 31                  March 31
                                2001          2000         2001        2000
                                       (thousands except per share data)
 
     OPERATING REVENUES     $ 1,063,587   $   581,581   $3,780,733  $2,375,810
 
     COST OF GOODS SOLD         846,381       372,083    2,647,324   1,384,632
 
       Gross margin
        on revenues             217,206       209,498    1,133,409     991,178
 
       Other operation
        and maintenance         148,632       116,275      569,108     424,166
       Depreciation
        and amortization         45,324        44,919      176,549     171,697
       Taxes other than income   16,650        16,108       63,527      59,029
 
     OPERATING INCOME             6,600        32,196      324,225     336,286
 
     OTHER INCOME (EXPENSES), NET  (250)         (201)       2,546         (37)
 
     EARNINGS BEFORE INTEREST
      AND TAXES                   6,350        31,995      326,771     336,249
 
     INTEREST INCOME (EXPENSES):
       Interest income              869         1,609        3,107       3,954
       Interest
        on long-term debt       (26,441)      (25,387)    (106,579)    (71,092)
       Interest on trust
        preferred securities     (4,317)       (4,317)     (17,326)     (7,675)
       Allowance for borrowed
        funds used during
        construction                183           148        2,264         584
       Other interest charges    (3,706)       (5,614)     (10,193)    (38,967)
        Net interest income
        (expenses)              (33,412)      (33,561)    (128,727)   (113,196)
 
     INCOME (LOSS) BEFORE TAXES (27,062)       (1,566)     198,044     223,053
 
     INCOME TAX EXPENSE
      (BENEFIT)                 (12,093)        (2,342)     66,754      82,150
 
     NET INCOME (LOSS)      $   (14,969)   $       776   $ 131,290   $ 140,903
 
     AVERAGE COMMON SHARES
      OUTSTANDING                77,922         77,863      77,878      77,817
 
     EARNINGS PER AVERAGE
      COMMON SHARE          $     (0.19)    $     0.01    $   1.69   $    1.81
 
 
     consolidated statements of retained earnings
     (unaudited)
                                 Three Months Ended     Twelve Months Ended
                                      March 31                March 31
                                  2001        2000        2001        2000
                                          (dollars in thousands)
 
     BALANCE AT BEGINNING
      OF PERIOD                $  621,010  $  577,532  $  552,419  $  515,031
     Net Income (loss)            (14,969)        776     131,290     140,903
     Cash dividends declared
      on common stock             (25,928)    (25,889)   (103,596)   (103,515)
     BALANCE AT END OF PERIOD  $  580,113  $  552,419  $  580,113  $  552,419
 
 
     OGE Energy Corp.
     financial and
     statistical data         Three Months Ended      Twelve Months Ended
     (unaudited)                   March 31                March 31
                               2001       2000         2001         2000
                                         (dollars in thousands)
     UTILITY
       Electric revenues:
         Residential         $ 129,826   $ 96,688    $ 608,794    $ 510,322
         Commercial             75,810     53,492      378,136      314,395
         Industrial             64,380     56,252      295,886      242,589
         Public authorities     29,332     20,481      143,369      115,779
         Sales for resale       14,223     11,814       60,526       45,228
         Other                  10,189      4,312       34,647       24,075
           Total system
            revenues           323,760    243,039    1,521,358    1,252,388
         Sales to other
          utilities              3,075      2,293       13,730       29,644
           Total electric
            revenues         $ 326,835   $245,332   $1,535,088   $1,282,032
 
       Sales of electricity
         (millions of kwh):
         Residential             1,906      1,581        8,298        7,427
         Commercial              1,249      1,148        5,751        5,378
         Industrial              1,524      1,817        6,786        6,786
         Public authorities        559        538        2,549        2,417
         Sales for resale          366        447        1,690        1,680
           Total system sales    5,604      5,531       25,074       23,688
         Sales to other
          utilities                 67         80          244          438
           Total electric sales  5,671      5,611       25,318       24,126
 
       Number of customers                             705,763      698,664
 
       Average cost of energy
        per KWH (cents):
         Fuel                    2.504      1.427        2.350        1.616
         Fuel and purchased
           power                 3.337      2.269        3.026        2.350
 
       Degree days:
         Heating
           Actual                2,091      1,539        4,160        2,757
           Normal                2,028      2,048        3,636        3,656
         Cooling
           Actual                  ---          5        2,168        1,964
           Normal                    9          9        1,864        1,864
 
     ENOGEX INC.
     Operating revenue       $ 750,537   $365,114   $2,497,023   $1,296,795
     Operating income        $  (2,213)  $ 26,640   $   50,155   $   88,428
     Net income (loss)       $  (9,615)  $  7,946   $    2,138   $   26,073
     Cash flow (excluding
      working capital)       $  12,168   $ 34,384   $  101,885   $  128,437
     Total capital
      expenditures           $  23,586   $ 10,922   $   59,875   $  750,786
     Physical System
      Supply * (MMcfd)           1,889      2,059        2,037        1,685
     Natural gas
      processed ** (MMcfd)         742        828          787          715
     Natural gas liquids
      sold *** (000 gallons)   114,426    169,182      607,658      544,110
     Average sales price
      per gallon             $   0.631   $  0.455   $    0.555   $    0.360
     Frac Spread price
      per MMBtu              $  (0.200)  $  2.987   $    1.462   $    2.149
     Natural gas marketed
      (BBtu)                    83,430    111,600      406,407      351,554
     Average sales price
      per BBtu               $   7.108   $  2.519   $    5.002   $    2.440
     Power marketed (MWH)      310,911    122,821    1,258,424    1,388,124
     Average sales price
      per MWH                $  43.710   $ 25.360   $   47.899   $   36.129
     Natural gas produced
      (MMcfe)                    1,469      2,331        7,564       10,092
     Average sales price
      per Mcfe               $   4.993   $  2.407   $    3.798   $    2.443
 
     *   Reflects all natural gas entering the Enogex, Ozark and Transok
         pipeline systems from wellheads and interconnects.
     **  Includes Enogex's net interest in sales at each plant owned either
         wholly or partially by Enogex (Nustar is shown at 100%).
     *** Includes Enogex's net interest in sales at each plant owned either
         wholly or partially by Enogex.
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE OGE Energy Corp.
    OKLAHOMA CITY, April 23 /PRNewswire Interactive News Release/ -- OGE
 Energy Corp. (NYSE:   OGE) today reported a loss of $0.19 a share for the three
 months ended March 31, 2001, compared with earnings of $0.01 a share for the
 first quarter in 2000.  OGE Energy is the parent company of Oklahoma Gas and
 Electric Company (OG&E) and Enogex Inc.
     OG&E, a regulated electric utility, posted a loss of $0.01 a share,
 compared with a loss of $0.04 a share for the first three months of 2000.
 Enogex, a natural gas pipeline and energy marketing company, recorded a loss
 of $0.12 a share, compared with net income of $0.10 a share in the year-ago
 period.  The holding company posted a loss of $0.06 in the first quarter,
 compared to a loss of $0.05 a share a year earlier.
     The results for OG&E and the holding company are not unusual for the first
 quarter.  Enogex's loss in the quarter was primarily due to the depressed
 operating environment for the processing and sale of natural gas liquids.  The
 fractionation spread -- the value of liquids after they are processed out of
 natural gas, compared to the price of the gas itself -- was, on average,
 negative in the first quarter.
     OGE Energy has long recognized that the natural gas liquids business is
 subject to wide variations in fractionation spreads.  Enogex, in fact, has
 often profited from liquids prices that were high relative to natural gas.
 But the recent environment of unprecedented high natural gas prices, without
 corresponding price increases in natural gas liquids, has exerted strong
 downward pressure on fractionation spreads.
     Also in the first quarter, Enogex continued to resolve the under-recovery
 of pipeline system fuel expenses, reported with fourth-quarter 2000 results.
 Enogex filed for fuel-recovery rate adjustments with the Federal Energy
 Regulatory Commission.  The impact of this issue was minimal in the first
 quarter.
     "We are disappointed with our first-quarter results, but we are actively
 addressing the issues involved," said Steven E. Moore, chairman, president and
 CEO of OGE Energy.  "Meanwhile, our electric utility is making pre-season
 preparations to meet the growing demand for power during the summer cooling
 season, when OG&E accounts for the majority of our annual earnings."
 
     Discussion of First Quarter 2001
     OGE Energy consolidated operating revenues were $1 billion in the first
 quarter, up from $582 million in the first three months of 2000.  The first-
 quarter gross margin was $217.2 million, compared with $209.5 million in the
 year-earlier quarter.  Operating income was $6.6 million in the first quarter,
 compared with $32.2 million a year earlier.  The decrease was primarily due to
 increased operation and maintenance expenses.
     At OG&E, the electric utility, first-quarter revenues were $326.8 million,
 with a net loss of $1 million, or $0.01 a share, compared with revenues of
 $245.3 million and a net loss of $3.2 million, or $0.04 a share in the
 comparable period a year earlier.  The increase in revenues was due to
 increased customer demand, as well as higher fuel costs associated with
 record-high natural gas prices.  Changes in fuel costs are automatically
 passed on to customers through regulatory adjustment clauses.  Demand was
 driven primarily by colder weather.
     First-quarter revenues at Enogex were $750.5 million, compared with
 $365.1 million a year earlier, due primarily to higher commodity prices.
 Expenses were higher as well and the net loss at Enogex was $9.6 million, or
 $0.12 a share, down from net income of $7.9 million, or $0.10 a share in the
 year-ago quarter.  The decline is attributed primarily to a reduction in
 volumes and fractionation spreads in the processing segment, higher fuel
 expenses in the natural gas gathering and transmission segment, and reduced
 margins in the energy marketing business.
     Losses at the holding company in the first quarter and the year-ago period
 were primarily due to interest and tax expenses.
 
     2001 Outlook
     OGE Energy Corp. previously projected 2001 earnings at $2 to $2.10 a
 share.  Due to narrower fractionation spreads in natural gas liquids and
 expectations that this trend will continue, the company has revised its 2001
 earnings estimate to $1.70 to $1.80 a share.
 
     Conference Call Webcast
     OGE Energy Corp. will host a conference call for discussion of the results
 and the outlook for 2001 on Monday, April 23 at 8 a.m. CDT.  The conference,
 hosted by James R. Hatfield, senior vice president and chief financial officer
 of OGE Energy, will be simulcast and archived at
 http://www.videonewswire.com/OGE/042301/.
     OGE Energy is the parent company of Oklahoma Gas and Electric Company
 (OG&E), Oklahoma's largest electric utility with 700,000 customers in a
 service territory spanning 30,000 square miles in Oklahoma and western
 Arkansas, and of Enogex Inc., a natural gas pipeline and energy marketing
 business operating one of the nation's 10 largest pipeline systems,
 principally in Oklahoma, Arkansas and Texas.
     Some of the matters discussed on this news release may contain forward-
 looking statements that are subject to certain risks, uncertainties and
 assumptions.  Actual results may vary materially.  Factors that could cause
 actual results to differ materially include, but are not limited to: general
 economic conditions, including their impact on capital expenditures; business
 conditions in the energy industry; competitive factors; unusual weather;
 regulatory decisions and other risk factors listed in the Company's Form 10-K
 for the year ended December 31, 2000 and other factors described from time to
 time in the Company's reports to the Securities and Exchange Commission.
 
     OGE Energy Corp.
     consolidated statements of income
     (unaudited)
                                Three Months Ended       Twelve Months Ended
                                     March 31                  March 31
                                2001          2000         2001        2000
                                       (thousands except per share data)
 
     OPERATING REVENUES     $ 1,063,587   $   581,581   $3,780,733  $2,375,810
 
     COST OF GOODS SOLD         846,381       372,083    2,647,324   1,384,632
 
       Gross margin
        on revenues             217,206       209,498    1,133,409     991,178
 
       Other operation
        and maintenance         148,632       116,275      569,108     424,166
       Depreciation
        and amortization         45,324        44,919      176,549     171,697
       Taxes other than income   16,650        16,108       63,527      59,029
 
     OPERATING INCOME             6,600        32,196      324,225     336,286
 
     OTHER INCOME (EXPENSES), NET  (250)         (201)       2,546         (37)
 
     EARNINGS BEFORE INTEREST
      AND TAXES                   6,350        31,995      326,771     336,249
 
     INTEREST INCOME (EXPENSES):
       Interest income              869         1,609        3,107       3,954
       Interest
        on long-term debt       (26,441)      (25,387)    (106,579)    (71,092)
       Interest on trust
        preferred securities     (4,317)       (4,317)     (17,326)     (7,675)
       Allowance for borrowed
        funds used during
        construction                183           148        2,264         584
       Other interest charges    (3,706)       (5,614)     (10,193)    (38,967)
        Net interest income
        (expenses)              (33,412)      (33,561)    (128,727)   (113,196)
 
     INCOME (LOSS) BEFORE TAXES (27,062)       (1,566)     198,044     223,053
 
     INCOME TAX EXPENSE
      (BENEFIT)                 (12,093)        (2,342)     66,754      82,150
 
     NET INCOME (LOSS)      $   (14,969)   $       776   $ 131,290   $ 140,903
 
     AVERAGE COMMON SHARES
      OUTSTANDING                77,922         77,863      77,878      77,817
 
     EARNINGS PER AVERAGE
      COMMON SHARE          $     (0.19)    $     0.01    $   1.69   $    1.81
 
 
     consolidated statements of retained earnings
     (unaudited)
                                 Three Months Ended     Twelve Months Ended
                                      March 31                March 31
                                  2001        2000        2001        2000
                                          (dollars in thousands)
 
     BALANCE AT BEGINNING
      OF PERIOD                $  621,010  $  577,532  $  552,419  $  515,031
     Net Income (loss)            (14,969)        776     131,290     140,903
     Cash dividends declared
      on common stock             (25,928)    (25,889)   (103,596)   (103,515)
     BALANCE AT END OF PERIOD  $  580,113  $  552,419  $  580,113  $  552,419
 
 
     OGE Energy Corp.
     financial and
     statistical data         Three Months Ended      Twelve Months Ended
     (unaudited)                   March 31                March 31
                               2001       2000         2001         2000
                                         (dollars in thousands)
     UTILITY
       Electric revenues:
         Residential         $ 129,826   $ 96,688    $ 608,794    $ 510,322
         Commercial             75,810     53,492      378,136      314,395
         Industrial             64,380     56,252      295,886      242,589
         Public authorities     29,332     20,481      143,369      115,779
         Sales for resale       14,223     11,814       60,526       45,228
         Other                  10,189      4,312       34,647       24,075
           Total system
            revenues           323,760    243,039    1,521,358    1,252,388
         Sales to other
          utilities              3,075      2,293       13,730       29,644
           Total electric
            revenues         $ 326,835   $245,332   $1,535,088   $1,282,032
 
       Sales of electricity
         (millions of kwh):
         Residential             1,906      1,581        8,298        7,427
         Commercial              1,249      1,148        5,751        5,378
         Industrial              1,524      1,817        6,786        6,786
         Public authorities        559        538        2,549        2,417
         Sales for resale          366        447        1,690        1,680
           Total system sales    5,604      5,531       25,074       23,688
         Sales to other
          utilities                 67         80          244          438
           Total electric sales  5,671      5,611       25,318       24,126
 
       Number of customers                             705,763      698,664
 
       Average cost of energy
        per KWH (cents):
         Fuel                    2.504      1.427        2.350        1.616
         Fuel and purchased
           power                 3.337      2.269        3.026        2.350
 
       Degree days:
         Heating
           Actual                2,091      1,539        4,160        2,757
           Normal                2,028      2,048        3,636        3,656
         Cooling
           Actual                  ---          5        2,168        1,964
           Normal                    9          9        1,864        1,864
 
     ENOGEX INC.
     Operating revenue       $ 750,537   $365,114   $2,497,023   $1,296,795
     Operating income        $  (2,213)  $ 26,640   $   50,155   $   88,428
     Net income (loss)       $  (9,615)  $  7,946   $    2,138   $   26,073
     Cash flow (excluding
      working capital)       $  12,168   $ 34,384   $  101,885   $  128,437
     Total capital
      expenditures           $  23,586   $ 10,922   $   59,875   $  750,786
     Physical System
      Supply * (MMcfd)           1,889      2,059        2,037        1,685
     Natural gas
      processed ** (MMcfd)         742        828          787          715
     Natural gas liquids
      sold *** (000 gallons)   114,426    169,182      607,658      544,110
     Average sales price
      per gallon             $   0.631   $  0.455   $    0.555   $    0.360
     Frac Spread price
      per MMBtu              $  (0.200)  $  2.987   $    1.462   $    2.149
     Natural gas marketed
      (BBtu)                    83,430    111,600      406,407      351,554
     Average sales price
      per BBtu               $   7.108   $  2.519   $    5.002   $    2.440
     Power marketed (MWH)      310,911    122,821    1,258,424    1,388,124
     Average sales price
      per MWH                $  43.710   $ 25.360   $   47.899   $   36.129
     Natural gas produced
      (MMcfe)                    1,469      2,331        7,564       10,092
     Average sales price
      per Mcfe               $   4.993   $  2.407   $    3.798   $    2.443
 
     *   Reflects all natural gas entering the Enogex, Ozark and Transok
         pipeline systems from wellheads and interconnects.
     **  Includes Enogex's net interest in sales at each plant owned either
         wholly or partially by Enogex (Nustar is shown at 100%).
     *** Includes Enogex's net interest in sales at each plant owned either
         wholly or partially by Enogex.
 
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 SOURCE  OGE Energy Corp.