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Wednesday July 6th, 2005

Zions buying Amegy in $1.7 billion deal…Nearly 30 Texas chemical plants on Congressional Research Service list of potential terror targets…Tropical Storm Cindy prompts platform shutdowns in Gulf… Salt Lake City-based Zions Bancorp said today it’s agreed to buy Houston-based Amegy Bancorp for $1.7 billion in cash and stock. Amegy Bancorp is the third-largest independent commercial […]

Zions buying Amegy in $1.7 billion deal…Nearly 30 Texas chemical plants on Congressional Research Service list of potential terror targets…Tropical Storm Cindy prompts platform shutdowns in Gulf…

Salt Lake City-based Zions Bancorp said today it’s agreed to buy Houston-based Amegy Bancorp for $1.7 billion in cash and stock. Amegy Bancorp is the third-largest independent commercial bank in Texas. Zions operates in eight western states and now makes a move to enter the Texas market. Under terms of the deal, Amegy shareholders will get a combination of cash and stock valued at $23.32 for each Amegy share. That’s a one-and-a-half percent premium over Tuesday’s closing price. The deal is subject to approval by Amegy shareholders and banking regulators. Zions says it expects the transaction to close during the fourth quarter of 2005. Houston-based Amegy will continue to operate as a separate company under its current brand name and management team. Zions Utah Bancorp operates about 400 bank branches in eight western states under such names as Nevada State Bank and California Bank and Trust. It has about 8,000 employees. Amegy has about 2,100 workers and more than 80 branches in Texas.

Officials say they are concerned that at least 100 U. S. plants that store large amounts of lethal chemicals are tempting targets for militants. A Congressional Research Service report says many of those plants are near population centers of at least one million people. The tally of plants is one of the first public state-by-state breakdowns of how closely potentially deadly chemical stores are to cities. The Environmental Protection Agency refuses to release its own list fearing it could aid terrorist plans. House Democrat Edward Markey says “chemical facilities are at the top of the terrorists’ target list.” He says the report was needed to help raise awareness.

The survey by the Congressional Research Service did not specify the facilities’ names or the cities where they are located. Plants in Texas and 22 other states that store lethal chemicals are in some of the nation’s most populous communities. Ranges are listed for four states–California, Illinois, Indiana and Texas–because the service said it did not have updated information on some facilities, such as the types and quantities of chemicals made or stored there. That includes Texas, which has 28 or 29 facilities on the list. The Environmental Protection Agency is not releasing the exact locations of the plants for security reasons.

Houston’s 50-mile-long ship channel is the heart of one of the world’s largest petroleum-processing centers. More than 300 plants sprawl from the ship channel’s banks. Chemical plants line the Texas Gulf Coast from Corpus Christi to Beaumont. A 2003 database compiled by environmental watchdog groups said chemical facilities near major American population centers include six plants that store chlorine and sulfur dioxide in Houston.

As Tropical Storm Cindy makes it way through the Gulf of Mexico, Houston-based Marathon Oil has shut down three oil and natural gas-producing platforms to evacuate workers, according to Reuters. Some 45 workers were being evacuated from the South Pass, Ewing Banks and Vermillion platforms.

Oil futures hit a new record today, settling above 61 dollars a barrel for the first time. Traders say the market reacted to the prospects for a slowdown in production in the Gulf of Mexico with the approach of Tropical Storm Dennis. As the rapidly weakening Cindy moved inland, the National Hurricane Center says Tropical Storm Dennis is expected to make its way into the Gulf this weekend and is already strengthened to the point that it’s being called a minimal hurricane. Before being downgraded to a tropical depression, Cindy forced at least 23 petroleum production platforms and six drilling rigs to be evacuated, interrupting more than three percent of the Gulf of Mexico’s normal oil and natural gas production. While there have been some storm-related power outages disrupting some refinery operations in the Gulf, traders describe the snags as minor and temporary.

The U. S. Army signed a deal with Halliburton in May for another $4.97 billion in new work in Iraq, according to Reuters. The Houston-based company’s logistics work with the Army so far has been worth about $9.1 billion. A spokeswoman for the U. S. Army Field Support Command in Rock Island, Illinois says the deal was not made public at the signing because the Army did not consider such an announcement necessary.

The services sector of the economy was expanding rapidly last month, according to a purchasing managers’ trade group. The Institute for Supply Management says along with business activity picking up, employment was also on the rise. The report was issued by Ralph Kaufmann, chairman of the ISM Non-Manufacturing Business Survey Committee and coordinator of the Supply Chain Management Program at the University of Houston–Downtown. The group’s non-manufacturing index is put at 62.2, up nearly four points from May and the 27th consecutive month of increase. Inflation remains a concern. The group’s members report rising prices, reflecting recent increases in energy costs.

BP Products North America has leased nearly 100,000 square feet of space to open a Texas City office. The space is in the former K-Mart building on Palmer Highway, and will be occupied by about 400 BP employees and contractors who currently work at the company’s refinery and chemical plant in Texas City. Most of the staff to be housed there are in the Projects and Engineering Group, along with other services supporting BP Texas City operations such as Procurement, Learning and Development and Community Affairs. BP says one of its highest priorities has been to relocate people who do not need to be stationed near their manufacturing facilities. The site will be ready for occupancy in early October.

The faculty of El Tech de Monterrey is partnering with Houston Community College for a Summer Business Institute focusing on doing business in Mexico and Latin America. This is the first offering of eight 12-hour seminars offered through the partnership. The seminars are geared to business managers and administrators involved in international trade or managing Hispanic employees and executives with companies already doing business in Mexico or Latin America.

Memorial Hermann Healthcare System has a sponsorship agreement with the Houston Rockets, Houston Comets and Houston Aeros, becoming the official health care partner for the teams. The hospital’s name will be posted throughout the Toyota Center and players will attend public appearances at Memorial Hermann facilities. The system hopes to increase its exposure to paying customers, noting it provided $440 million in free care last year, compared to $344 million the previous year.

Houston Northwest Medical Center plans to finish its emergency room expansion by the end of the month. It’s the first phase of a multi-million dollar project at the 498-bed facility on FM 1960. Phase two begins in January, adding 47 private treatment rooms to double the facility’s current capacity.

MetroNational has broken ground on its fourth professional office building in Memorial City. It’s a $36 million, six-story tower to be built at the southwest corner of I-10 and Gessner, slated for completion in the spring. It includes a seven-story parking garage, and the first tenant is an outpatient imaging center operated by Memorial Herman Memorial City Hospital.

Powell Industries has acquired Switchgear & Instrumentation Limited for $18.4 million. Switchgear is a UK division of NG Bailey Organisation Limited. Powell is a Houston-based manufacturer of equipment and systems for the management and control of electrical energy and other critical processes. S&I is a supplier to the international oil, gas and petrochemical sectors and to UK-based engineering procurement and contracting firms.

Houston-based Mission Resources has agreed to sell non-operated interests in the Goldsmith and Wasson oil fields to Fort Worth-based XTO Energy for $56.5 million. The fields are in Ector and Yoakum counties. Houston-based Petrohawk plans to acquire Mission for $135 million.

The Nigerian subsidiary of Houston-based Global Energy has begun production at its Cawthorne Channel gas processing plant in Nigeria. Global Gas and Refining Limited operates from a barge-mounted facility, and is the first indigenous-owned and operated LNG processing plant in Africa. Shell Petroleum and Development of Nigeria is supplying the plant with associated gas, and Global will extract the liquid from the gas. Residual gas will be returned to Shell for delivery to Nigeria LNG.

Close to 1,500 union workers are striking today at one Asarco copper-mining facility in Texas and five in Arizona. Workers at the Amarillo refinery were the last to go out. They set up picket lines after a storm blew through the area around midnight. Nearly 300 hourly workers are on the payroll at the Amarillo facility, and some 250 belong to unions. Some 750 workers in Kearny and Hayden, Arizona walked off the job a day after their contract expired. Nearly 750 more workers in Sahuarita and Marana, Arizona and Amarillo began voting the next day to support the strike, then started walking off. Those employees had been working without a contract for the past year. Union negotiators accused the company of failing to bargain in good faith, asserting violations of fair labor practices. Asarco said it regretted and was disappointed that the unions had chosen to strike “rather than continue trying to negotiate a new contract.” Among other things, the company has asked workers to accept a three-year salary freeze and medical benefit and pension reductions. That’s despite copper prices reaching $1.74 a pound last week before falling back. Asarco says it has not recovered fully from previous low copper prices. It’s net first-quarter 2005 profits were above $2 million compared to just over $16 million a year earlier.

The Alabama government is asking that state’s Supreme Court to uphold a record $3.5 billion judgment against Exxon Mobil. In legal papers, the state’s attorneys say Exxon had a “secret scheme to cheat the state out of its bargained-for royalties.” The state’s legal arguments were in response to Exxon Mobil’s request in May for the Supreme Court to throw out the largest verdict in state history. Irving-based Exxon Mobil argued that the judgment wasn’t based on facts and was unconstitutionally excessive. Company spokeswoman Susan Reeves says Exxon Mobil will file a reply with the Supreme Court in August.

Regional carrier ExpressJet Airlines has reached a tentative four-year pact with its 1,200 flight attendants. The union representing those employees of the Houston-based airline made the announcement today. The International Association of Machinists and Aerospace Workers said the potential deal includes pay raises of up to 35 percent over four years, an enhanced 401-K plan and job security. Flight attendants for ExpressJet can vote on the pact through July 24th. ExpressJet is a provider for Continental Airlines.

Continental Airlines reports that it flew 82.2 percent full on its full systems, 82.9 percent on its mainline and 84.7 percent full on domestic main routes in June–all above last year’s rates at this time. But its international mainline flew 80.8 percent full, slightly down from the same time last year. The Houston-based air carrier flew 7.2 billion revenue passenger miles compared to 6.7 billion at this point last year.

Subaru will invest in a Texas dealership to learn more about consumer tastes in the sun belt. The dealership to be built in the Dallas suburb of Plano will become Subaru’s first U. S. “antenna” store. Subaru will buy the land between two other dealerships and pay for the facilities, then lease them to the dealer. In turn, the dealer will tell Subaru how to improve the vehicles and the sales process. Subaru plans similar antenna stores on the east and west coasts. Subaru builds only all-wheel-drive vehicles. The vehicles sell well on the east coast and in the midwest and Pacific northwest where winter driving conditions are difficult. Sales have been weak in the south and southwest.

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