Fraud trial of two former Houston-based energy traders continues…ConocoPhillips and IPIC consider UAE refinery…U.S. Senate panel approves compromise over the flight-restricting Wright Amendment…
A former El Paso natural gas trader testified he was shocked when ordered to delete price reporting data on his computer, according to the Houston Chronicle. Randall Richards is a government witness in the criminal trial of former Dynegy and El Paso traders Michelle Valencia and Greg Singleton. The two face charges of conspiracy and fraud for filing false gas trading data and withholding data to trade publications between 2000 and 2001. The data was used to create indexes used to price gas and power contracts.
Authorities in Colorado say an autopsy confirms convicted Enron founder Ken Lay died of heart disease. The Pitkin County Sheriff’s Office in Aspen says Lay’s death was natural. The immediate cause of death was classified as heart disease. Lay died at an Aspen-area home July 5th. He faced sentencing this fall for fraud and conspiracy convictions after one of the biggest business scandals in U.S. history. The postmortem report says the 64-year-old Lay collapsed after waking up in the middle of the night. His wife says she heard a “thump” after Lay went to the restroom–and she found him lying on the floor.
ConocoPhillips and the International Petroleum Investment Company have agreed to explore the expansion of their global refining businesses and jointly develop new Middle East opportunities, according to the Houston Business Journal. They’ve agreed to a feasibility study for construction of a world-scale refinery in Fujairah, United Arab Emirates. If the project proceeds, ConocoPhillips and IPIC would form a joint venture to own and operate the refinery. IPIC is owned by the government of the Emirate of Abu Dhabi.
Hundreds of jobs are expected to be created in the Beaumont area with the sale of Trinity Island to The Woodlands-based Chicago Bridge and Iron. A company subsidiary–called 850 Pine Street–has purchased the property from Trinity Industries. The deal closed June 29th. The company plans to make and sell modular buildings at the 74-acre site. Vice President Lee Murphy told the Beaumont City Council yesterday that eventually, as many as 1,000 jobs will be created over three years. Trinity Industries stopped its railcar manufacturing at the island in late 2001.
Prosperity Bancshares will pay $357.1 million to acquire Texas United Bancshares, which operates La Grange-based State Bank, Gainesville-based GNB Financial, Dallas-based Gateway National Bank and Roanoke-based Northwest Bank. The deal has been approved by the boards of directors of both companies and is expected to close in the first quarter of 2007.
A U.S. Senate panel today approved a compromise over the flight-restricting Wright Amendment. The measure involving Dallas Love Field now goes to the full Senate. U.S. Senator Kay Bailey Hutchison says the bill she introduced was okayed by the Senate Commerce, Science and Transportation Committee. The compromise was reached last month by leaders of Dallas, Fort Worth, Love Field and Dallas-Fort Worth International Airport. Southwest Airlines is based at Love Field. American Airlines calls DFW home. The plan–over eight years–would repeal the Wright Amendment, which was approved in 1979 to bolster then-fledgling DFW Airport. The overhaul would allow airlines to have through-ticketing at Dallas Love Field. Current restrictions limit direct flights to Texas, New Mexico, Oklahoma, Kansas, Arkansas, Louisiana, Mississippi, Missouri and Alabama.
Two Texas-based airlines today reported higher second-quarter earnings. Southwest Airlines says its second-quarter profit more than doubled–despite higher fuel costs. Dallas-based Southwest says the numbers were driven by higher passenger traffic and capacity. The low-cost carrier earned $333 million in the three months that ended June 30th. That compares to year-ago earnings of $144 million. The parent of American Airlines announced its best earnings for an April through June period since 1998. Fort Worth-based AMR was helped by full airplanes and higher fares at the start of the summer travel season. AMR earned $291 million in the second quarter. That matched the forecast of analysts surveyed by Thomson Financial. One year ago AMR earned $58 million. Revenue rose more than 12 percent, which American says was enough to offset high fuel prices. The nation’s largest carrier and its regional affiliate, American Eagle, spent $374 million more on fuel than it would have spent at mid-2005 prices. American has been culling fuel-guzzling planes in its fleet. Chairman Gerard Arpey welcomed the quarterly profit, but says there’s more work to do to return AMR to financial health.
Entergy today announced it expects a slight drop in second-quarter earnings, but still expects its annual profit to meet projections. Entergy has regulated electricity businesses in Texas, Arkansas, Louisiana and Mississippi. Entergy says special items will include results from the company’s Entergy New Orleans unit, which is in bankruptcy protection, and a gain on the sale of the company’s competitive retail unit.
Lawyers for a doctor and two nurses say they’re innocent of charges over deaths at Memorial Medical Center in New Orleans after Hurricane Katrina. Ten were patients of the hospital’s owner Dallas-based Tenet Healthcare. The doctor and two nurses were booked yesterday with being “a principal to second-degree murder”–a charge that carries a mandatory sentence of life in prison. The arrest of Dr. Anna Pou and nurses Cheri Landry and Lori Budo, brings to an end months of speculation about so-called “mercy killings” at Memorial. The storm slammed the Gulf Coast August 29th. At least 34 patients died at the hospital, which became a death trap as temperatures soared past 100 degrees and floodwaters rose.
The Houston Chronicle and the San Antonio Express-News are merging their statehouse bureaus in Austin to boost their print and online reporting resources. Both are Hearst newspapers. Chronicle Bureau Chief Clay Robison will serve as chief of the seven-person bureau. Express-News Bureau Chief Peggy Fikac will become deputy chief. The Chronicle and Express-News are two of 12 daily newspapers published by Hearst. Other Hearst papers in Texas include the Beaumont Enterprise, Midland Reporter-Telegram, Laredo Morning Times and Plainview Daily Herald.
The proposed route of the nation’s largest natural gas pipeline in about 25 years would travel through 14 Ohio counties as it snakes from the west. Houston-based Kinder Morgan Energy Partners is building the pipeline with San Diego-based Sempra Energy. They’ve begun seeking federal approval for the $4 billion pipeline that would stretch more than 1,600 miles through eight states. Private property owners in the path of the Rockies Express Pipeline would be paid a one-time fee for the use of their land. Environmentalists are raising concerns about possible disruption of natural areas.
The Los Angeles Times reports a campaign adviser to California Governor Arnold Schwarzenegger is being paid to provide marketing strategy to San Antonio-based AT&T. Government watch dogs say Matthew Dowd’s dual role presents a possible conflict of interest. It comes at a time when the California governor’s office is involved with legislation that could be worth billions of dollars to the telecommunications giant. But the campaign told the Times that neither Dowd nor his Austin-based consulting firm, Vianovo, had acted improperly. A campaign spokeswoman says the firm does no work for AT&T in California and has had no conversations with the governor’s campaign or state staff regarding the company. AT&T is lobbying for passage of a California bill that would ease the financial and regulatory burdens of installing the new technology for the industry. Dowd and his consulting firm are assisting AT&T with the rollout of its U-Verse Service in Texas.
AT&T today is launching a satellite TV set-top box that also connects to the Internet for movie downloads. The box, called AT&T Homezone, will be initially available in Ohio and San Antonio to new customers of the co-branded AT&T/Dish Network satellite TV service. AT&T says the unit will cost just under $10 per month, in addition to Internet and satellite service fees. AT&T plans to expand the service area in coming months, positioning Homezone as an alternative for those who can’t yet receive its premier service, U-Verse. U-Verse transmits video over phone lines. AT&T earlier this summer launched U-Verse service in parts of San Antonio. The Dish Network is operated by Echostar Communications.
While there’s general agreement that families with school-aged kids will increase their back-to-school spending this year, there’s a difference among economists over the size of any increase. A new survey conducted for the National Retail Federation estimates the total will come to $17.6 billion, versus $14.8 billion in 2005–a jump of nearly 19 percent. Clearview Economics economist Ken Mayland takes issue with that. He says that because high fuel costs may serve as a sort of tax during the back-to-school shopping season, the increase will more likely be on the order of five-to-six percent. America’s Research Group Chairman Britt Beemer thinks the increase could be even smaller. He says with 40 percent of consumers citing high gas prices as affecting their spending, the increase could be just three-to-four percent.
State insurance regulators plan to liquidate the state’s sixth-largest home insurance company, after taking it over earlier this month and failing to find a buyer. Regulators are urging customers of San Antonio-based Texas Select Lloyds and its sister companies to find new coverage. Texas regulators earlier this month said Vesta Insurance Group of Birmingham, Alabama had defaulted on some loans. Texas authorities took over several of the company’s subsidiaries–Vesta Fire Insurance, Vesta Insurance, Shelby Insurance, Shelby Casualty Insurance and Texas Select Lloyds Insurance. Texas Insurance Commissioner Mike Geeslin appointed a receiver. The Texas Department of Insurance says unless there’s a last-minute solution–all policies will be canceled on August 23rd. Regulators also have started the liquidation process.
A class-action lawsuit challenging the fairness of Blackstone Group’s $870 million deal to take Austin-based Encore Medical Corporation private was filed late yesterday. In legal documents made public today, Encore Medical shareholder Robert Kemp alleges the $6.55-a-share offer from the private-equity investor is “unconscionable, unfair and grossly inadequate.” Chicago-based Blackstone Group and Encore Medical said they were unable to comment on the suit, which was filed in Delaware’s Court of Chancery. The shareholder complaint alleges Blackstone is taking advantage of a depression in Encore Medical’s share price to get control of the orthopedic-device company at a bargain price.
The World Trade Organization will investigate whether U.S. antidumping duties on shrimp imports from Ecuador violate international trade rules. WTO today announced it’s setting up a panel to review the matter. The U.S. last year imposed duties of up to almost 4.5 percent because it said Ecuadorian exporters were selling shrimp on the U.S. market at below cost price. But Ecuador argues that Washington had incorrectly calculated the duties because it had used a practice known as “zeroing” to calculate whether the shrimp was being dumped. Previous World Trade Organization panels have found that zeroing leads to artificial and inflated margins of dumping–and thus higher duties. Ecuador argues that if the U.S. Department of Commerce had not used zeroing, it would not have concluded that the shrimp was being dumped on the American market.
The C-27-J Spartan cargo plane will be assembled for the Army and Air Force at Cecil Field in Jacksonville, Florida. The C-27-J will be produced by Boeing Integrated Defense Systems of St. Louis, which is a subsidiary of Chicago-based Boeing and Global Military Aircraft Systems. The latter is a joint venture of l-3 Communications Integrated Systems of Greenville, Texas. The twin-engine turbo prop already is being built in Italy for military services in that country, Greece and Bulgaria. The U.S. military currently uses an earlier version of the Spartan, the Italian-made C-27-A. Officials say Cecil Field will be the U.S. assembly site. An engineering, logistics and support center for the aircraft will be in Madison, Mississippi. l-3 Communications Integrated Systems recently acquired Crestview Aerospace in Florida.
Rancher Dwyatt Bell’s pastures are so dry and brown that he can see heat-loving grasshoppers crawling across the bare earth. He’s had to sell off some cows and lease extra land just to give his small herd somewhere to graze. Bell of Sulphur Springs called the drought the worst he’s seen in 34 years. It’s a bleak yet familiar scene for ranchers and farmers in Texas, which leads the nation in cattle and cotton production. Texas is coming off its hottest first six months ever recorded. It’s in the midst of its worst drought since 1998 and is enduring 100-degree days all over the state. The National Weather Service says that there’s no immediate hope for relief. There’s little chance of rain through Friday and warmer-than-normal temperatures in coming months.
Schools in the Big 12 Conference want to attract more venture investment to their states—with football as the bait. The schools plan to hold a conference for venture capitalists in early December–held in conjunction with the Big 12 championship football game in Kansas City–to showcase technology developed at the various schools. Big 12 schools are mainly located in states like Iowa, Kansas, Missouri, Nebraska and Oklahoma that don’t attract much venture investment from traditional VC hotspots on the West and East Coasts. Colorado and Texas are the exceptions. Together, they accounted for about 90 percent of the $1.9 billion in venture capital invested last year in the seven states that are home to big 12 schools. That’s according to Pricewaterhousecoopers.