Dominion Power 2004 Annual Report Download - page 13

Download and view the complete annual report

Please find page 13 of the 2004 Dominion Power annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

D 2004/Page 11
Last year I said
we’d target
$50 million in new
savings from
Six Sigma process
improvement pro-
jects for 2004. Our
team likes a
challenge. It easily
beat this ambitious
goal, racking up
nearly $100 million
in hard savings.
In 2004, Devils
Tower, the world’s
deepest spar
platform, began
operating in
the Gulf of Mexico.
and certified as an executive green belt.
In 2005, we’ll spread Six Sigma deeper
into our organization, expanding the
number of employees trained, including
even our board of directors.
Hit: More Natural Gas and
Oil Production
Meanwhile, our profitable natural gas
and oil operations continue to grow.
Our proved gas and oil reserves total
nearly 6 trillion cubic feet equivalent
(Tcfe). Daily production from more than
26,000 wells is nearly 1.2 billion cubic
feet equivalent (Bcfe). Based on these
measures,
Oil & Gas Journal
, a top trade
publication, ranked us seventh in U.S.
gas production and reserves and 13th in
oil and gas assets. We ranked second
in the total number of U.S. wells
drilled, according to the most recently
available industry data.
In 2004, Devils Tower, the world’s
deepest spar platform, began operating
in the Gulf of Mexico more than
4.9
6.1 6.4
Proved Gas and Oil Reserves*
Trillion Cubic Feet Equivalent (Tcfe)
20022001
2.8
2000 2003
5.9
2004
* Includes reserves owned by the Dominion Exploration & Production segment and
Dominion Transmission, Inc., part of the Dominion Energy business segment.
7
3.5
0
Will we terminate above-market
power purchase contracts? Yes we will,
at a moment’s notice when the econom-
ics work. Last year, we paid $153 million
and assumed $213 million in debt, to buy
out three old uneconomic power con-
tracts at Dominion Virginia Power. These
successful negotiations, now complete,
are expected to reduce annual capacity
payments by $75 million.
Discussions with other parties are
under way. By early 2005, we’d bought
out another contract expected to reduce
annual capacity payments by $18 million.
Hit: Six Sigma Savings Continue
Last year I said we’d target $50 million in
new savings from Six Sigma process
improvement projects for 2004. Our team
likes a challenge. It easily beat this ambi-
tious goal, racking up nearly $100 million
in hard savings. Our black belt experts
completed more than 400 projects that
uncovered new ways to work smarter
and take cost savings to the bottom line.
Forgive me for bragging, but I’m proud to
be the first Dominion officer to be trained