ITEM 1. BUSINESS
MCN Energy Group Inc. (MCN), is a diversified energy holding company with markets and investments throughout North America and in Asia. The operating revenues, operating income, and identifiable assets of MCN's business segments are included in the financial statements, incorporated by reference in Item 8, "Financial Statements and Supplementary Data," on page 22. At December 31, 1997, MCN and its subsidiaries had 3,209 employees.
MCN operates through two major business groups, Diversified Energy and Gas Distribution.
- - Diversified Energy, operating through MCN Investment Corporation (MCNIC), is involved in the following businesses: Exploration & Production (E&P), with 1.3 trillion cubic feet equivalent (Tcfe) of proved gas and oil reserves at December 31, 1997 in the Midwest/Appalachia, Midcontinent/Gulf Coast and Western regions of the United States; Pipelines & Processing, with gathering, processing and transmission facilities near areas of rapid reserve development and growing consumer markets; Energy Marketing, with total gas sales and exchange gas delivery markets of 358.8 billion cubic feet (Bcf) for 1997; Electric Power, with investments in electric generation facilities in operation and under development with a combined 2,804 megawatts (MW) of gross capacity and investments in electric distribution facilities; and Gas Storage, with investments in storage facilities that have 52 Bcf of storage capacity, 42 Bcf of which is currently under development.
- - Gas Distribution consists principally of Michigan Consolidated Gas Company (MichCon), a natural gas distribution and intrastate transmission company serving 1.2 million customers in more than 500 communities throughout Michigan. MichCon is subject to the accounting requirements and rate regulation of the Michigan Public Service Commission (MPSC) with respect to the distribution and intrastate transportation of natural gas. Slightly less than half of MichCon's labor force is covered by collective bargaining agreements. In June 1998, bargaining agreements covering approximately 15% of the labor force are due to expire.
DIVERSIFIED ENERGY
Diversified Energy's operating revenues for 1997 totaled $951.3 million (including intercompany transactions), while operating and joint venture income was $112.7 million in 1997, nearly double 1996 operating and joint venture income. Diversified Energy contributed 43% of the company's earnings, up from 28% in 1996. The growth in earnings was driven primarily by increased operating and joint venture income as all of MCN's Diversified Energy business units turned in exceptional performances. Partially offsetting the growth in earnings were increased financing costs resulting from additional capital needed to fund investments.
Diversified Energy -- Operating Statistics - --------------------------------------------------------------------------------
* Includes MCN's share of joint ventures
EXPLORATION & PRODUCTION
MCNIC is engaged in natural gas and oil exploration, development and production through its wholly owned subsidiary, MCNIC Oil & Gas Company (MOG). At December 31, 1997, proved gas reserves totaled 1,166.2 Bcf and proved oil reserves were 155.1 Bcfe, up a combined 80.2 Bcfe, or 7%, from December 1996 levels. The increase in gas and oil reserves during 1997 was tempered by the sale of properties with 57.6 Bcfe of proved reserves and net downward reserve revisions of 32.8 Bcfe. Operating and joint venture income for 1997 increased by $24.9 million over 1996 to $58.1 million, reflecting a significant increase in gas and oil production during 1997 to 98.3 Bcfe from 63.7 Bcfe in 1996. Approximately $17.8 million in federal tax credits were generated in 1997 related to gas production from certain Antrim and coalbed methane gas wells. E&P operating results for 1997 reflect a $1.95 average gas sales rate per thousand cubic feet (Mcf), which declined $.01 per Mcf compared to 1996. Operating results for 1996 reflect a gas sales rate of $1.96 per Mcf, compared to $2.02 per Mcf in 1995. The average sales rates include the effect of hedging with commodity swap and futures agreements, which are used to manage Diversified Energy's exposure to the risk of market price fluctuations. As a result of strong gas prices in the marketplace, hedging agreements had the effect of reducing the average sales rate for 1997 by $.40 per Mcf and for 1996 by $.35 per Mcf. Conversely, hedging agreements increased the average sales rates for 1995 by $.51 per Mcf in a less favorable gas market. E&P operating results also reflect an average oil sales rate of $16.87 per barrel, which decreased by $3.31 per barrel compared to 1996. The average oil sales rate for 1996 increased by $3.94 per barrel compared to 1995.
MOG's strategy is to continue to grow its U.S. gas reserve base and production in known producing areas through drilling and acquisition, generating attractive returns. MOG is also pursuing international opportunities in areas with known hydrocarbons involving both lower risk, unconventional long-life reserves and higher risk conventional exploration and development prospects with substantial upside potential. Although MOG may increase its operating role in the future, currently it takes mainly a non-operated, but active role, investing
with operators with local expertise in each play. MOG anticipates that production will increase in the future through the continued development of its large inventory of unconventional and conventional drilling locations and from additional exploration and development of MOG's approximately 1.2 million net (2.6 million gross) acres of undeveloped property.
In 1997, MOG participated in the drilling of 696 wells (412 net), bringing the total drilled to 2,273 wells (1,477 net) since it began operations in 1992. The 1997 drilling program achieved an overall drilling success rate of 91% and added approximately 269 Bcfe of proved reserves. MOG's success rate in its drilling program since its inception in 1992 has averaged approximately 91%. In 1997, about 26% of these wells were drilled in Michigan Devonian (Antrim) shale formations. Even though the potential natural gas recovery from an average Antrim well is less than the recovery from wells drilled in other types of formations, wells drilled in the Antrim shale formations have a high success rate and are therefore considered relatively low risk. MOG's average working interest in Antrim shale E&P wells is approximately 80%. Exploratory activities in the Midcontinent/Gulf Coast and Western regions involve greater risk of dry holes or unproductive wells, but there is also a greater potential for finding larger gas reserves. MOG's average working interest in these wells is approximately 30%. Average finding cost in 1997 was $.90 per Mcfe, up from $.83 per Mcfe in 1996. Average production cost in 1997 was $.70 per Mcfe, down from $.76 in 1996.
Approximately 42% of MOG's production and 71% of its proved reserves were associated with the Midwest/Appalachia region in 1997, as MOG added 257 net wells in the region. MOG continued as the largest Antrim producer, holding interests in approximately 20% of the area's estimated 5,950 producing wells. MOG's success in the Antrim shale formation provided them with the foundation to begin a thorough evaluation of similar nonconventional reservoirs (fractured shales, coal seams and tight sands) throughout the United States. Coalbed methane production from MOG's CONSOL properties and partnership with Equitable Resources, Inc. continued to place it among the largest players in the region. MOG participated in 162 coalbed wells in this area during 1997.
About 33% of production and 14% of reserves were from the Midcontinent/Gulf Coast in 1997. MOG owns a 41% working interest in the Broughton Joint Venture, a partnership that is actively drilling in the Cotton Valley pinnacle reef play in east Texas. The partnership made a significant natural gas discovery during the third quarter 1997. The Camp Cooley #2R natural gas well, in which MOG holds a 24% net interest, has been producing since October at rates in excess of 30 million cubic feet per day (MMcf/d). With an absolute open flow potential calculated at 48 MMcf/d, it is one of the largest discoveries in the play to date. The Cotton Valley pinnacle reef play continues to attract national attention for its high-potential drilling prospects despite difficult drilling and completion conditions that have driven up exploration costs. Broughton holds one of the biggest positions in this major play, with numerous large anomalies identified through three-dimensional (3-D) seismic on its more than 300,000 gross acres concentrated within the three-county heart of the known producing area. As a result, Broughton can be selective in choosing only the largest and most prospective reef targets. The Broughton partnership participated in the drilling of 10 wells during 1997, and 18 since entering the play in 1996.
Also on the Gulf Coast, MOG is involved in a number of high-potential 3-D seismic plays that appear promising. These include a 17.7% working interest in a 120,000-acre Sligo reef play and a 47% working interest in a 29,500-acre project in the successful Yegua and Wilcox plays, both in Texas, as well as a 43.8% interest in a 154,000-acre project in Louisiana.
In the Midcontinent, development drilling continued in the Anadarko and Permian Basins as MOG participated in 135 wells. Most notable were the 35 wells completed in the Delaware Sands play in southeast New Mexico. These wells boosted MOG's net production from the play and set up a number of development locations for future drilling. In 1997, MOG added 65 net wells in the Midcontinent/Gulf Coast region, while divesting of its interests in more than 500 mature Midcontinent wells and selling its ownership interest in an offshore Gulf of Mexico venture.
The Western region became a significantly larger piece of the business in 1997, accounting for 25% of production and 15% of reserves, compared with only 6% and 9%, respectively, in 1996. In the Western region during 1997, MOG participated in 200 wells and achieved a 93% drilling success rate that resulted in the
addition of 51 net wells. Production from the region is expected to increase at double-digit rates again in 1998 with about 250 new wells planned for drilling. Western region production has grown rapidly due to the Venoco and Jonah Field partnerships.
MOG continues to develop its one-third partnership interest in a 52,000-acre block in and around the Jonah Field, located in the Green River Basin of Wyoming. This partnership, which originally began in May 1996, included 12 existing gas wells and a 42 MMcf/d gathering system. Through the end of 1997, MOG had drilled 28 additional wells, all of which were successful. As a result, total field production tripled to 54 MMcf/d and the gathering system was expanded to 65 MMcf/d. With 65 proved undeveloped locations identified and ready to drill, MOG's net proved reserves from this field are approximately 104 Bcfe. MOG's net natural gas volumes grew from 1.4 Bcfe of partial-year production in 1996 to 8.9 Bcfe in 1997.
In December 1996, MOG added California oil-producing acreage to the Western region through the formation of Venoco L.L.C. Development drilling and installation of secondary oil recovery facilities have increased the partnership's production as much as 5,300 Bbls per day during 1997 to over 7,000 Bbls per day. The Venoco venture contributed 11.7 Bcfe of oil and gas production in this region. In addition, the partnership acquired the South Ellwood properties that have provided MOG with 4,000 Bbls per day of production in 1997.
Other areas of interest within MOG's Western region include the Powder River Basin in Wyoming, where MOG has a 35% working interest in a coalbed methane project that drilled 61 wells during 1997, bringing the well count to 118. In the Uinta Basin in Utah, MOG has 50% interests in both a secondary oil recovery venture that drilled 50 successful producing wells in 1997 and a coalbed methane project that has begun a five-well pilot program in anticipation of full-scale development starting in 1999.
In 1997, MOG made significant investments in natural gas reserves, acquiring interests in more than 32 producing wells. At December 31, 1997, 2,917 wells were producing. An additional 384 wells were in various stages of completion and are expected to begin producing in 1998. Additional information on MOG's exploration and production activities is reported under Item 2.
ITEM 2. PROPERTIES
MCN, through its principal subsidiaries, owns or leases under long-term leases office space in Detroit and Grand Rapids, Michigan, Houston, Texas, Denver, Colorado, and Hartford, Connecticut.
GAS DISTRIBUTION
MichCon operates natural gas distribution, transmission and storage facilities in the state of Michigan. At December 31, 1997, MichCon's distribution system included 16,537 miles of distribution mains, 1,076,212 service lines and 1,190,314 active meters. MichCon owns 2,549 miles of transmission and production lines that deliver natural gas to the distribution districts and interconnect its storage fields with the sources of supply and the market areas. MichCon also owns properties relating to five underground storage fields with an aggregate storage capacity of approximately 130 Bcf. Additionally, MichCon owns district office buildings, service buildings and gas receiving and metering stations. In January 1998 MichCon purchased its principal office building in Detroit, The Guardian Building, ending its long-term capital lease obligation. MichCon occupies its principal office building in Grand Rapids under a long-term lease. Portions of these buildings are subleased to affiliates and others.
Most of MichCon's properties are held in fee, by easement, or under lease agreements expiring at various dates to 2006, with renewal options extending beyond that date. The principal plants and properties of MichCon are held subject to the lien of MichCon's Indenture of Mortgage and Deed of Trust under which MichCon's First Mortgage Bonds are issued. Some existing properties are being fully utilized and new properties are being added to meet the requirements of expansion into new areas. MichCon's capital expenditures for 1997 totaled $155.2 million. MichCon's capital requirements for 1998 are anticipated to be approximately $200 million for capital investments.
The Saginaw Bay Pipeline Company, a wholly owned subsidiary of MichCon Pipeline Co., owns a 66 2/3% interest in the Saginaw Bay Area Limited Partnership, which owns substantially all of the properties used in the conduct of its business, primarily a 126-mile transmission line. The Saginaw Bay Lateral Company, a wholly owned subsidiary of MichCon Pipeline Co., owns a 46% interest in the Saginaw Bay Lateral Limited Partnership, which owns substantially all of the properties used in the conduct of its business, primarily lateral lines related to the Saginaw Bay transmission line. Westside Pipeline Company, a wholly owned subsidiary of MichCon Pipeline Co., owns an 82.59% interest in Jordan Valley Pipeline, a 14-mile major gathering line and the Terra-Hayes Pipeline, a 18-mile major gathering line.
MichCon Gathering Company, a wholly owned subsidiary of MichCon Pipeline Co., owns substantially all of the properties used in the conduct of its business, including 44.7-mile, 8.6-mile, 11-mile and 25.2-mile transmission lines and a 2400 horsepower compressor station.
Thunder Bay Gathering Company, a wholly owned subsidiary of MichCon Pipeline Co., owns substantially all of the properties used in the conduct of its business, including 44 miles of gathering lines.
Citizens owns all of the properties used in the conduct of its utility business. Included in these properties is a gas distribution system, a two-story office building in downtown Adrian and a one-story service center.
DIVERSIFIED ENERGY
MCNIC Oil & Gas Company has interests in properties used for gas production, including compressor facilities and small gathering lines. (See information on the following page on Exploration & Production Activities for further details).
MCN is involved in joint ventures that own property associated with gas storage, electric power, gas gathering and processing, and real estate.
MCN's facilities are suitable and adequate for their intended use.
EXPLORATION & PRODUCTION ACTIVITIES
MCNIC Oil & Gas Company (MOG), a subsidiary of MCN, is involved in various gas and oil producing activities. The following data, together with the financial information detailed in Note 15 to the Consolidated Financial Statements, incorporated by reference in Item 8 of this report, and the general data provided under the "Exploration & Production" section of Item 1 located on page 2, provide additional information regarding this activity. Information on estimated gas and oil reserves was obtained by MOG from the independent petroleum engineering consultants Ryder Scott Company, Miller and Lents, Ltd., Questa Engineering Corporation, S.A. Holditch & Associates, Inc., Netherland, Sewell & Associates, Inc., and Williamson Petroleum Consultants, Inc.
PRODUCTION
PRODUCTIVE WELLS AND ACREAGE
DRILLING ACTIVITY
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
In addition to the Gas Distribution's regulatory proceedings and other matters described in Item 1, "Business," MCN is also involved in a number of lawsuits and administrative proceedings in the ordinary course of business with respect to taxes, environmental matters, contracts, personal injury, property damage claims and other matters.
ENVIRONMENTAL
In 1994, MichCon received a general notice of liability letter from the U.S. Environmental Protection Agency (USEPA) stating that it was one of two potentially responsible parties at the Lower Ecorse Creek Superfund site in Wyandotte, Michigan. USEPA requested that MichCon conduct a remedial investigation and feasibility study at that site. MichCon investigated its prior activities in the area and USEPA's bases for its conclusion, and concluded that it was not responsible for contamination discovered at that site. MichCon informed USEPA of this belief and did not undertake the requested activities.
In September 1996, USEPA sent MichCon a second general notice of liability letter for the site and demanded reimbursement of approximately $2.3 million in past costs, plus interest. USEPA then issued MichCon and the other potentially responsible party a unilateral administrative order under section 106 of the Comprehensive Environmental Response Compensation and Liability Act to implement the remedy. USEPA estimates the cost of the remedy to be approximately $650,000. MichCon again reviewed USEPA's bases for determining that it is a potentially responsible party and concluded again that it was not responsible for contamination discovered at that site and informed USEPA of its decision. USEPA has not taken any subsequent action against MichCon. USEPA may sue MichCon to force compliance with the order or may implement the remedy and then sue MichCon for recovery of all incurred costs. If USEPA institutes and prevails in such a suit and if the court determines that MichCon did not have sufficient cause not to comply with the order, the court may impose civil penalties and punitive damages. Management believes MichCon was not responsible for contamination at the site and has sufficient cause not to comply with this order and that the resolution of this matter will not have a material adverse effect on MichCon's financial statements.
ENERGY CONSERVATION PROGRAMS
In December 1994, a suit was filed against MichCon in Wayne County Michigan Circuit Court by six customers who had participated in one of three energy conservation programs sponsored by MichCon. Under these programs, which had been approved by the MPSC and operated from 1990 to 1996, MichCon offered low-interest loans, rebates and other arrangements to assist approximately 46,000 qualified residential customers in purchasing high-efficiency furnaces. MichCon did not manufacture, sell or install any of the furnaces. The complaint alleged that MichCon induced the purchase of these furnaces through its conservation programs and that it had a duty to, but failed to, warn its customers that harmful levels of carbon monoxide could backdraft if a chimney was not properly sized and a chimney liner installed. No personal injuries were claimed. Plaintiffs sought injunctive relief, unspecified monetary damages and class action certification. The trial court denied such certification on two separate occasions; the Michigan Court of Appeals denied plaintiffs' request for an appeal of those rulings.
MichCon impleaded, as third-party defendants, all of the manufacturers, contractors and installers of the plaintiffs' furnaces. On September 13, 1996, plaintiffs' third motion to certify the lawsuit as a class action was granted. MichCon appealed the granting of certification and, on December 2, 1996, the Michigan Court of Appeals granted MichCon's motion for immediate consideration and stayed all further proceedings until the Court issues its decision. MichCon believes that the plaintiffs' allegations are without merit and will continue to defend the case vigorously
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to all executive officers of MCN, as of February 27, 1998, is set forth below. Such officers are appointed by the Board of Directors for terms expiring at the next annual meeting of shareholders, scheduled to be held April 22, 1998.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MCN Common Stock is traded on the New York Stock Exchange. On February 19, 1998 there were 21,984 holders of record of MCN Common Stock. Information regarding the market price of MCN Common Stock and related security holder matters is incorporated by reference herein from the section titled "Supplementary Financial Information" in MCN's 1997 Annual Report to Shareholders, pages 67 and 68.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Information required pursuant to this item is incorporated by reference herein from the section titled "Supplementary Financial Information" in MCN's 1997 Annual Report to Shareholders, pages 67 and 68.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information required pursuant to this item is incorporated by reference herein from the section titled "Management's Discussion and Analysis" in MCN's 1997 Annual Report to Shareholders, pages 31 through 41.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required pursuant to this item is incorporated by reference herein from the following sections of MCN's 1997 Annual Report to Shareholders. The consolidated statement of income, cash flows and capitalization are for each of the years ended December 31, 1997, 1996 and 1995 and the consolidated statement of financial position is as of December 31, 1997 and 1996.
Consolidated Statement of Financial Position, page 43
Consolidated Statement of Income, page 42
Consolidated Statement of Cash Flows, page 44
Consolidated Statement of Capitalization, page 45
Notes to Consolidated Financial Statements, pages 46 through 66
Supplementary Financial Information, page 67 and 68; and
Independent Auditors' Report, page 69
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth in the section titled "Proposal 1 -- Election of Directors" in MCN's February 1998 definitive Proxy Statement is incorporated by reference herein.
Information concerning the executive officers of MCN is set forth in the section titled "Executive Officers of the Registrant" on page 21 in Part I of this Report.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth in the sections titled "Compensation of Directors and Executive Officers" and "Report of the Compensation Committee of the Board of Directors on Executive Compensation" in MCN's February 1998 definitive Proxy Statement is incorporated by reference herein.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth in the section titled "Beneficial Security Ownership of Directors, Nominees and Executive Officers" in MCN's February 1998 definitive Proxy Statement is incorporated by reference herein.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth in the sections titled "Executive Compensation" and "Other Compensation Matters" in MCN's February 1998 definitive Proxy Statement is incorporated by reference herein.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(A) LIST OF DOCUMENTS FILED AS PART OF THE REPORT:
1. For a list of financial statements incorporated by reference, see the section entitled "Financial Statements and Supplementary Data", on page 22 in Part II, Item 8 of this Report.
2. The Financial Statement Schedule for each of the three years in the period ended December 31, 1997, unless otherwise noted, are included herein in response to Part II, Item 8:
Independent Auditors' Report
SCHEDULE
II -- Valuation and Qualifying Accounts
Schedules other than those referred to above are omitted as not applicable or not required, or the required information is shown in the financial statements or notes thereto.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors:
We have audited the consolidated financial statements of MCN Energy Group Inc. and subsidiaries (the "Corporation"), as of December 31, 1997 and 1996, and for each of the three years in the period ended December 31, 1997, and have issued our report thereon dated February 12, 1998 (which expresses an unqualified opinion and includes an explanatory paragraph relating to the Corporation's adoption of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation"), such consolidated financial statements and report are included in your 1997 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of the Corporation, listed in Item 14. This consolidated financial statement schedules is the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
DELOITTE & TOUCHE LLP Detroit, Michigan February 12, 1998
SCHEDULE II
MCN ENERGY GROUP INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (THOUSANDS OF DOLLARS)
[CAPTION]
- ---------------
NOTES:
(1) Reference is made to Note 8b to the Consolidated Financial Statements MCN's 1997 Annual Report to Shareholders, page 54.
(2) During 1994, MCN established a reserve for the expected loss relating to the sale of a partnership interest in a gas marketing joint venture. The sale took place in 1995.
(3) During 1995, MCN reversed $1,607,000 of an uncollectible reserve on an advance made to a joint venture. The uncollectible provision was reversed upon the receipt of payments and credit support to ensure repayment of the remaining advance balance.
3. Exhibits, Including Those Incorporated by Reference.
- --------------- * Indicates document filed herewith.
References are to MCN (File No. 1-10070) for documents incorporated by reference.
References are to MichCon (File No. 1-7310) for MichCon documents incorporated by reference.
(B) REPORTS ON FORM 8-K:
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
MCN ENERGY GROUP INC.
-------------------------------------- (Registrant)
By: /s/ Harold Gardner
------------------------------------ Harold Gardner Vice President, Controller and Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the date indicated.
EXHIBIT INDEX
- --------------- * Indicates document filed herewith.
References are to MCN (File No. 1-10070) for documents incorporated by reference.
References are to MichCon (File No. 1-7310) for MichCon documents incorporated by reference.