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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 16, 1998
CONSOLIDATED NATURAL GAS COMPANY
________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-3196 13-0596475
________________________________________________________________________
(State of incorporation) (Commission (IRS Employer
File Number) Identification No.)
CNG Tower, 625 Liberty Avenue, Pittsburgh, PA 15222-3199
________________________________________________________________________
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (412) 690-1000
Not Applicable
________________________________________________________________________
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
IMPAIRMENT OF CANADIAN OIL PRODUCING PROPERTIES
As described in the consolidated financial statements for the year ended
December 31, 1996 which are included in Exhibit 99 to the 1996 Annual Report
on Form 10-K, the Company follows the full cost method of accounting for
its gas and oil producing activities prescribed by the Securities and
Exchange Commission (SEC). Under the full cost method, all costs directly
associated with property acquisition, exploration, and development activities
are capitalized, with the principal limitation that such amounts, net of
related deferred taxes, not exceed the present value of the estimated future
net revenues to be derived from the production of proved gas and oil reserves.
The estimate of future net revenues is determined under guidelines established
by the SEC and is not necessarily indicative of the future economic value of
the Company's proved reserves. However, if net capitalized costs exceed the
estimated value at the end of any quarterly period, then a permanent write-down
of the assets must be recognized in that period. The limitation test is
performed separately for each cost center with cost centers established on a
country-by-country basis.
Due primarily to the significant decline in market prices for heavy oil
production, the Company is expected to recognize an impairment of its
Canadian oil producing properties at December 31, 1997. The actual effect
on earnings will not be known until the completion of the year-end closing.
However, based on current estimates, the impact of this noncash charge is
not expected to exceed $7 million, or about 7 cents per share. The Company's
proved gas and oil reserves in Canada represent less than 4 percent of
the Company's total reserves. For the United States cost center, a write-down
of properties will not be required at December 31, 1997.
FORWARD-LOOKING INFORMATION
Certain matters discussed in this Form 8-K are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe
the Company's future plans, objectives or goals are also forward-looking
statements. Such statements may address future events and conditions
concerning capital expenditures, earnings, litigation, rate and other
regulatory matters, liquidity and capital resources, and financial accounting
matters. Actual results in each instance could differ materially from those
currently anticipated in such statements, due to factors such as: natural
gas and electric industry restructuring, including ongoing state and federal
activities; the weather; demographics; general economic conditions and
specific economic conditions in the Company's distribution service areas;
developments in the legislative, regulatory and competitive markets in which
the Company operates; and other circumstances affecting anticipated revenues
and costs.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
________________________________
(Registrant)
By D. M. WESTFALL
______________________________
(D. M. Westfall)
Senior Vice President
January 16, 1998 and Chief Financial
Officer
