Venezuela delays ban on U.S. air carriers; Exxon Mobil “not welcome” in Venezuela for resisting tax increases…Private equity and hedge fund managers bid for Enron’s international assets…Texas unemployment rate holds steady in February…
Venezuela has put off a ban on U.S. airlines that was meant to protest U.S. safety restrictions against its carriers. A ban prohibiting nearly all flights by American carriers to the country had been set to take effect today. The Ministry of Infrastructure announced late yesterday that it set a new deadline of April 25th. It insists that the U.S. Federal Aviation Administration drop restrictions against Venezuelan carriers or face retaliation. The change gives FAA officials visiting in Caracas this week time to finish their safety audit of the country and upgrade Venezuela’s safety ranking, it said. Venezuela threatens to ban all flights by Houston-based Continental Airlines and Atlanta-based Delta Air Lines, and restrict flights by Fort Worth-based American Airlines. Caracas is protesting the FAA’s safety ranking of Venezuela. That banned Venezuelan airlines from flying their own planes to the United States or from launching new services.
Venezuela Oil Minister Rafael Ramirez said that Exxon Mobil is no longer welcome in the oil-producing country. Irving-based Exxon Mobil has resisted tax increases and contract changes that are part of a policy by President Hugo Chavez’s government to “re-nationalize” the industry. The company declined to submit to new terms that will turn 32 privately run oil fields over to state control. Exxon Mobil late last year sold its stake to its partner, Spanish-Argentine major Repsol Ypf, in one field to avoid accepting the unfavorable terms. Ramirez, in an interview with a state-run TV station, says some companies prefer to leave–rather than accept the policy changes. Exxon Mobil was the only firm to publicly speak against a royalty increase on extra-heavy oil production in Venezuela’s Orinoco River Basin in 2004.
A group of private equity and hedge fund managers is the leading bidder for the international assets of Enron for close to $2 billion, according to the Wall Street Journal. The group includes London emerging markets fund manager Ashmore Investment Management Ltd. and U.S. hedge funds D.E. Shaw and Eton Park Capital Management. Enron operates its international assets under the holding company Prisma Energy. Assets include power generation plants, natural gas pipeline and distribution facilities and energy distribution units in Latin America, Turkey, Poland and the Philippines, according to the Journal.
Portland General Electric will issue new stock on April 3rd, becoming a stand-alone company once again. PGE is expected to be Oregon’s sixth-largest publicly-traded company, trading on the New York Stock Exchange under the ticker symbol “POR.” The former Enron-owned company generates electricity for some 775,000 customers. Most stock will go to creditors, 35 to 45 percent to those whose claims already are settled and the remainder to a fund to pay off creditors whose claims aren’t resolved.
Burlington Resources stockholders today approved the proposed sale of the company to ConocoPhillips. Both energy-related companies are based in Houston. Holders of about three-fourths of the outstanding Burlington shares voted in favor of the acquisition. The deal is expected to be finalized tomorrow.
A co-founder says Tivo shared details of its technology with Dish Network. Former chief executive Michael Ramsay yesterday told a federal jury in Marshall that Dish later used it in its own Tivo-like boxes that can pause and rewind live television programs. The testimony came in Tivo’s patent-infringement lawsuit against Echostar Communications–the parent of Dish Network. But lawyers for Echostar produced internal tivo documents that appeared to credit Echostar for developing its own technology. Tivo has not said how much it is seeking in damages. An opposing lawyer says the company would ask the jury to award it more than $100 million. Echostar has filed a countersuit against Tivo. That case is scheduled for trial next year in federal court in Texarkana.
The Texas unemployment rate held steady at five percent in February as the state added 25,400 jobs. The Texas Workforce Commission says that’s the 17th consecutive month of job growth. The state has added almost 280,000 jobs over the year–making for an annual growth rate of 2.9 percent. An estimated 586,600 Texans remained actively looking for work in February. That’s up 16,700 from February and a drop of 67,300 from the year-ago period. The statewide unadjusted unemployment rate was 5.2, down from 5.3 percent in January. The national unemployment rate is 5.1 percent. The Houston area registered 5.3 percent, down from last month’s 5.6. The figures were adjusted for seasonal trends in hiring and firing, which most economists believe gives a better picture of the job market. There were increases in every category except trade, transportation and utilities, which lost 1,000 jobs.
A new study is raising fears that thousands of hurricane evacuees in Houston could end up homeless when assistance runs out. The study was commissioned by the Texas Department of Housing and Community Affairs. It found a shortage of almost 14,000 rental apartments affordable to the largest group of Hurricane Katrina and Rita evacuees. That’s the income category made up of families of five earning up to $26,360 a year. City vouchers now cover rent for close to 35,000 hurricane evacuees. The vouchers will end this year and ensuing FEMA assistance is expected to last through next spring. An official with the Coalition for the Homeless of Houston-and-Harris County says the group is discussing how to deal with additional demand for services. Other housing advocates say federal programs to help the poorest families should be expanded.
The Houston City Council has approved a $3 ticket surcharge at Hobby Airport by year’s end. The fee must be approved by the Federal Aviation Administration. Most U.S. airports have passenger facility charges. The Houston fee would pay for $330 million in general renovations and the addition of five gates.
Houston-based Anadarko Petroleum and other independent natural gas producers and industrial customers are asking for immediate action to address dwindling U.S. natural gas supplies. In a Washington news conference, the alliance of CEOs this week urged Congress and the Bush administration to open up offshore waters where oil and gas exploration and drilling is currently prohibited. The companies are also calling for the reduction of permitting backlogs and the acceleration of permitting to explore and drill in onshore federal lands.
Noble Energy has acquired United States Exploration in a $411 million deal. The acquisition extends Noble Energy’s operations in the Rocky Mountains. Noble Energy also operates in Argentina, China, Ecuador, Equatorial Guinea, the Mediterranean Sea and the North Sea.
El Paso Corporation says President and CEO Douglas Foshee got about $1 million extra in compensation in 2005 than in the previous year. The Houston-based company says Foshee got restricted stock awards valued at more than $2 million for 2005. He’d gotten awards valued at $1.3 million the year before. In a filing yesterday with the Securities and Exchange Commission, El Paso said Foshee got a 2005 salary of almost $938,000, compared with $630,000 the year before. El Paso transports, produces and processes oil and gas.
Harris County is the only Texas county in the Top 10 on a ranking of millionaires compiled by TNS Financial Services, according to the Houston Business Journal. Harris County ranks sixth in the nation, with 96,593 millionaires. Los Angeles County is at number one, with 262,800 millionaires.
A Lone Star Funds spokesman says today the investment firm is cooperating fully with a South Korean investigation. That’s after South Korean prosecutors raided the Dallas-based firm’s Seoul offices today. The prosecutors are investigating the company’s 2003 purchase of a majority stake in Korea Exchange Bank, tax irregularities and alleged illegal overseas money transfers. The prosecutors also have a warrant to arrest Steven Lee. The former head of Lone Star Funds’ Korean office is wanted on suspicion of tax evasion and embezzlement. South Korean authorities have banned about ten officials with ties to Lone Star from leaving the country. Prosecutors plan to ask the United States to extradite Lee, but their spokesman says Lee’s whereabouts aren’t known. Lone Star is trying to sell its stake in Korea Exchange Bank.
Don’t bother looking for Pizza Hut or Domino’s at Six Flags this summer. The nationwide theme park operator has signed a deal with Papa John’s to become the exclusive pizza sold at about 60 locations inside Six Flags’ 29 parks. The deal, financial terms of which were not disclosed, includes joint Web and e-mail marketing initiatives and in-store promotions. During the summer season, Papa John’s will display Six Flags ads on its boxes at restaurants within 100 miles of a theme park and will distribute promotional DVDs. Six Flags customers will get Papa John’s coupons and other promotional materials. Among the Six Flags parks are theme parks in Arlington and San Antonio and water parks in Arlington and Houston.
Patterson-UTI Energy saw fourth-quarter profit more than triple today as strong demand led to pricing increases. The West Texas company said net income for the quarter ended December 31st rose to $134.2 million. The results included a charge of three cents per share for expenses related to the embezzlement scheme. Revenue climbed 84 percent to $531.2 million. Analysts surveyed by Thomson Financial had forecast revenue of $510.4 million. For 2005, income almost tripled to $373 million. Revenue climbed 74 percent to $1.7 billion. The Snyder-based company drills oil and gas wells for exploration and production companies in Texas, New Mexico, Oklahoma plus eight other states and Western Canada. Patterson-UTI recently ended an investigation into the alleged embezzlement of $77.5 million by former Chief Financial Officer Jonathan Nelson. It says it found no other officials knowingly took part in the scheme. Nelson resigned in November, and the Securities and Exchange Commission has since frozen his assets. His trial is scheduled for May.
As the owner of his family’s 28-year-old company, Kurt Summers is one of the few Texas businessmen that pay state business taxes. He pays roughly $8,000 a year for Austin Generator Service in a tax Governor Rick Perry recently called “voluntary.” Summers, who took over the North Austin business when his father retired in 2002, says he pays the tax because he feels “an obligation to do my part.” For years, lawmakers have been trying to fix the loophole-ridden franchise tax that most Texas businesses don’t pay–including Dell and SBC. The latest attempt, endorsed by Perry yesterday, will likely be the starting point for a 30-day special session on the issue set to begin next month. His hope for a new tax is that it would level the playing field so that the six percent of companies that do pay will “no longer shoulder it by ourselves.” Under the new plan, Summers calculated that he would come out even after savings from an accompanying property tax cut. The bill exempts company’s with annual gross receipts of $300,000 or less.