Houston’s economic growth slowing, according to purchasing managers…FEMA announces federal disaster relief for Texas…Gasoline prices remain steady, according to Lundberg Survey…
Tropical storm Alberto so far has had a limited impact on oil and gas drilling operators in the Gulf of Mexico. Parts of the Gulf are still recovering from last year’s deadly Hurricanes Katrina and Rita. As for Alberto, Anadarko Petroleum halted well-completion work on two drilling ships far out in the Gulf. Spokeswoman Susan Richardson says workers stayed on the ships and hope to resume drilling tomorrow. Devon Energy removed a painting crew from a rig about 75 miles east of Venice, Louisiana. Spokesman Chip Minty says the crew couldn’t work because they were painting near the waterline, which had risen. Minty says production of oil and gas continues. Chevron operates in the eastern Gulf, closest to Alberto’s expected path, but didn’t lose any production or face large-scale evacuations.
Houston’s economic growth slowed for the second consecutive month, according to the National Association of Purchasing Management. May’s Purchasing Manager’s Index of 62 is the lowest reported in 2006 and the lowest since October 2005. But the group says a PMI of over 60 is still indicative of a robust economy. The index is based on a monthly survey of some 80 purchasing executives in oil and gas exploration and production, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare. Components of the survey include sales, production, employment, purchases, prices paid and inventory levels.
The U.S. Department of Homeland Security’s Federal Emergency Management Agency announced that federal disaster aid in the form of Public Assistance has been made available to reimburse the state for disaster relief. FEMA has obligated funds for repairing roof and interior damage from Hurricane Rita to Baptist Hospitals of Southeast Texas and to Sabine Pass Independent School District to return facilities to pre-hurricane conditions. Families and individuals who suffered damage from Rita have been approved to receive more than $946 million in FEMA assistance and loans from the Small Business Administration. Some 479,939 individuals have registered for Individual Assistance. Meanwhile, FEMA has approved more than $5.5 million for families and individuals who suffered damage from Texas wildfires.
Gasoline prices have remained steady the last three weeks. According to the Lundberg Survey, the average nationwide price for a gallon of self-serve regular was $2.93 on Friday, a fraction of a penny lower than it was three weeks ago. Analyst Trilby Lundberg says the supply of gasoline is up, demand is not up and there’s been an “overall enhancement to the supply and demand balance.” As a result, she says, prices are no longer rising and may even fall soon. But she says that assumes that nothing extreme happens to the price of crude oil, and that there is no more storm damage to U.S. refining infrastructure.
BP’s chief executive says world oil prices could drop to about $40 a barrel in the medium term as new supplies are found. Lord Browne tells the German weekly Der Spiegel that prices might fall even further in the long term. He warns that the world can’t expect prices to drop sharply in the short term. But he notes that large new oil fields are still being found and that regions such as West Africa have significant oil supplies. Browne says sources such as Canada’s oil sands also can be tapped profitably. Oil prices have soared recently, pushed up notably by tensions over Iran’s nuclear ambitions. Iran said over the weekend it had accepted some parts of a western offer aimed at getting it to drop its nuclear program–but it rejected others.
San Antonio’s Tower of the Americas has undergone $11 million of renovation to reclaim former glory. It is set to reopen June 21st, more than a year after it closed for a makeover in granite and mahogany. Added features include a 1,500-square-foot gift shop and a four-dimensional ride that gives a simulated helicopter tour of Texas. The city council last year awarded Houston-based Landry’s restaurants a contract to operate the tower until 2019. The operating company and city officials hope the new look and attractions will draw more visitors to the tower. Its popularity waned in the decades after its initial opening for the World’s Fair in 1968. They also hope it will remind city residents of the attraction in their own backyard.
There’s some good news about the global economy. According to U.S. Treasury Secretary John Snow, the world’s top finance ministers see “strong growth, inflation well-contained, interest rates at the low end of the historic level and rising prosperity.” And Snow says there are no major crises and no major economies in recession. However, the Group of Eight ministers’ final statement over the weekend did focus on the dangers of galloping oil prices and “widening” global imbalances. It made no direct reference to the U.S. trade deficit. But the statement did recognize that tackling global imbalances is a “shared responsibility.” The G-8 ministers have been meeting in St. Petersburg, Russia, which is set to host the G-8 summit next month.
Treasury Secretary Snow says the United States and Russia have made progress in talks on Moscow’s bid to join the World Trade Organization. Snow told reporters the two nations could reach a deal before next month’s Group of Eight summit. Snow made his comments after a meeting in St. Petersburg of G-8 finance ministers. Moscow’s push for entry into the WTO has been stymied by disputes with the United States over financial market liberalization and protecting intellectual property, among other issues.
California-based Parsons Corporation has acquired Houston-based 3D International, according to the Houston Business Journal. 3D/I will become a subsidiary of Parsons Commercial Technology Group and will lead a division focused on education and public buildings. 3D/I has 485 employees in 14 U.S. offices.
Shares of Houston Exploration Company jumped today after a hedge fund announced it was bidding to acquire the oil and gas exploration and production company. The Houston-based company’s management urged shareholders to take no action on the $62-per-share offer from Jana Partners. The offer is a 13 percent premium over the company’s closing stock price Friday. The hedge fund’s offer would value the company at about $1.8 billion. Jana’s 12.3 percent stake makes it Houston Exploration’s second-largest shareholder. It expressed frustration with the company’s strategy of growing through acquisitions. The hedge fund said it had asked Houston Exploration to buy back $650 million of its own shares and consider putting itself up for sale, but that the company’s management declined. Houston Exploration operates in Texas and the Rocky Mountains.
Houston-based U.S. Concrete has acquired the assets of Olson Precast of Lathrop, California in a $4.75 million deal. The acquisition adds to four existing precast concrete plants owned by U.S. Concrete in northern California. U.S. Concrete provides ready-mixed concrete and related products and services to the construction industry in several U.S. markets.
Houston-based Mattress Firm has completed its acquisition of Arizona-based Metropolitan Mattress, according to the Houston Business Journal. That brings Mattress Firm’s nationwide store count to 340.
Touchstone Resources USA has officially changed its name to Cygnus Oil and Gas. Stockholders of Houston-based touchstone approved the name change at the company’s annual meeting on May 23rd. The company’s common stock ticker symbol on the Nasdaq bulletin board changed from “TSNU.OB” to “CYNS.OB” with trading last Friday.
The Texas Attorney General’s Office says it’s reached an $8.5 million settlement with a drug maker for alleged Medicaid fraud. Illinois-based Baxter Healthcare was one of three drug makers State Attorney General Greg Abbott sued in 2004. Despite agreeing to the settlement, Baxter continues to deny any wrongdoing. A statement issued by the Attorney General’s office says the lawsuits against Illinois-based Abbott Laboratories and German drug maker B. Braun Medical continue. The lawsuits allege a scheme to falsely report wholesale prices of specific drugs and devices prescribed for Medicaid patients–thus defrauding the state Medicaid program. Baxter, specifically, was accused of falsifying wholesale prices of IV fluids and injectable medications.
A federal jury in Dallas today convicted the leader of an import-export company in a fraud investigation. Greg Setser was accused of cheating ministers and churchgoers out of $65 million by promising huge profits for doing God’s work. Setser is the 49-year-old former chief executive of IPIC International. He was convicted of 22 counts, including fraud and conspiracy, and could get up to life in prison. Greg Setser’s sister Deborah Setser was convicted on six counts, but acquitted on five. Setser’s daughter-in-law Charnelle and his business associate Thomas Henschke were acquitted. The trial featured about 100 witnesses, including televangelist Benny Hinn.
The government is turning to an 18-year-old prescription to fight counterfeit medicines. Drugs will have to be tracked every time they change hands from the factory to the pharmacy under provisions of a law the government is just now ready to enforce. The Federal Drug Administration had long put off enforcement in response to concerns from secondary wholesalers that the tracking requirement could put them out of business. FDA now says those concerns have either dissipated or no longer justify staving off enforcement any further. The FDA believes that radio-frequency identification technology is the most promising way to track drugs as they move through the supply chain. However, the FDA says it will hold off on requiring drug manufacturers and distributors to use the technology. For the time being, pedigree information is expected to be passed along by wholesalers in paper form.
Union workers at Bell Helicopter Textron have rejected by a three-to-one margin a contract proposal that the company called its best and final offer. United Auto Workers Local 218 voted 1,390 to 476 yesterday to reject the proposed three-year contract. That left the previous contract to expire last night. Bell says negotiations were to continue. After yesterday’s vote, the UAW Web site urged workers to report to their jobs as usual today. A Bell spokesman says the company proposal included a 21 percent cumulative wage increase over three years, ratification bonuses of 3,500 and a choice of three health plans. The company and union leaders both made health care costs a key issue. The company said its average health care cost per employee had tripled since 1999 to $18,000. The helicopter company is a unit of Providence, Rhode Island-based Textron Incorporated.
British jewelry retailer Signet Group today announced its short-lived merger talks with Texas-based Zale Corporation have ended. Signet is the parent of Kay Jewelers, Jared the Galleria of Jewelry and other regional names. In a single-sentence news release, Signet said that discussions regarding a merger with Irving-based Zale–“have been terminated.” The company provided no further detail. Signet earlier confirmed the existence of the talks in a terse, two-sentence statement to the London Stock Exchange. Zale officials weren’t immediately available for comment. The fact that the two companies were considering a merger was made public earlier today, after the talks were reported in the British press over the weekend. Signet operates more than 1,800 specialty retail jewelry stores, of which more than 1,200 are in the United States. It’s the largest specialty jewelry retailer in the U.S., with an 8.2 percent market share. Zale has 7.8 percent U.S. market share, with more than 2,300 stores in the United States, Canada and Puerto Rico. Zale stores trade under the names Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Bailey Banks and Biddle, Peoples Jewelers and Mappins Jewellers of Canada, and Piercing Pagoda.
Heritage Auction Galleries has sold the very first GI Joe action figure, the watch Buddy Holly wore when he died and letters from Abraham Lincoln. The Dallas company–which bills itself as the world’s largest collectibles auction house–built its success on the pop culture of coins, comics and memorabilia. It has carved out a populist niche in a field ruled by lofty houses like Sotheby’s and Christie’s. Employees say every piece has a story and that is what makes them so valuable. The company has been selling JFK’s bedroom rocker, kept by the assassinated president’s personal valet until the man’s death. Despite high expectations, the chair failed to reach its minimum price at auction Wednesday, but that same day, a historic flight plan claimed $23,900. A pilot’s relatives, not knowing what they were worth, brought in maps the pilot drew for Amelia Earhart’s famous trans-Atlantic journey. The company spends to promote and sell consigners’ objects, earning a commission on the sale. Heritage, founded in 1983, has grown to about 300 employees and $500 million in yearly sales. President Greg Rohan says the key has been using the Internet to open up auctions to more and more people.