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Comments about Columbia Energy Group

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John Wells says...

On 11/08/18
at 06:38 AM

This article leaves out all of the fine details of some of the real reasons for the existence of Mountaineer Gas. Mountaineer was formed by the forced break-up of Columbia Gas by the PUHCA laws of 1935 because of the monopoly they held over the industry. Also, Columbia Gas had entered into several bad “take or pay” style, long term supply contracts with companies like Mark West that they desperately needed to change the terms of or cancel altogether because they were a losing proposition. Court battles to break those contracts lasted for years during which time Columbia began forming sub chapter S corporations for several different divisions of the company [ hence CNR was born to protect their production assets ]with the eventual goal of filing for bankruptcy to put an end to their court battles involving the take or pay contracts. The new strategy worked but Columbia was still struggling to turn a profit, considering that natural gas prices were at bargain basement prices. The change in upper level management at Columbia was like a revolving door, but most of the new managers didn’t stay long, as nobody wanted to be the captain a sinking ship. Henry Harmon was a previous President at CNR before stripping the company of a great deal of its top staff to form his own company, essentially “gutting” CNR’s operating staff at their Charleston, WV headquarters. This led to many of the lesser ranked managers & staff also abandoning ship. In an effort to plug the holes in the sinking ship, NiSource, the new owner, began cutting budgets, personnel, maintenance programs, drilling programs, etc., offered early retirement to a great many workers and then restructured a brand new benefits & retirement program for potential new employees. Every conceivable cost cutting measure imaginable was implemented to repair the sinking ship but it was too late. Profit margins were not acceptable to stock holders and company accountants and the decision was made to put the company on the auction block again. Chesapeake Energy was the “lucky” recipient but soon saw the reality of the situation [there was no more drillable acreage to replenish dwindling reserves], and they sold the company to the current owner, C.O.R.E Energy based in Michigan. There is always more details in the book than what’s shown on the cover. I know this because I was there.

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