SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended September 30, 1999 Commission File No. 0-29812
BERKSHIRE ENERGY RESOURCES
Massachusetts 04-3408946
115 Cheshire Road, Pittsfield, Massachusetts 01201-1803
Registrant's telephone number, including Area Code 413:442-1511
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
At September 30, 1999, the Registrant had issued and outstanding 2,519,170
shares of Common Stock, no par value.
BERKSHIRE ENERGY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS Unaudited
(In Thousands Except Per Share Amounts)
Three Months Ended
--------------------
09/30/99 09/30/98
-------- --------
Operating Revenues $ 4,775 $ 4,837
Cost of Gas Sold 1,883 1,821
------- -------
Operating Margin 2,892 3,016
------- -------
Other Operating Expenses 3,205 3,350
Depreciation 546 415
Other Taxes 285 215
------- -------
Total 4,036 3,980
------- -------
Operating Loss (1,144) (964)
Other Income - Net 599 608
------- -------
Operating Loss and Other Income (545) (356)
Interest Expense 1,066 1,078
------- -------
Pre-Tax Loss (1,611) (1,434)
Income Tax Benefit (638) (558)
------- -------
NET LOSS (973) (876)
Retained Earnings at Beginning of Period 9,300 8,911
------- -------
Total 8,327 8,035
------- -------
Dividends Declared:
Preferred Stock 4 4
Common Stock 743 682
------- -------
Total Dividends 747 686
------- -------
Retained Earnings at End of Period $ 7,580 $ 7,349
======= =======
Loss Attributable to Common Shares $ (977) $ (880)
======= =======
Average Common Shares Outstanding 2,519.2 2,337.9
------- -------
Basic and Diluted Loss
Per Common Share $ (0.39) $ (0.38)
======= =======
See Independent Accountants' Review Report and Notes to Financial Statements.
BERKSHIRE ENERGY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS Unaudited
(In Thousands Except Per Share Amounts)
Twelve Months Ended
--------------------
09/30/99 09/30/98
-------- --------
Operating Revenues $50,671 $54,386
Cost of Gas Sold 22,547 26,591
------- -------
Operating Margin 28,124 27,795
------- -------
Other Operating Expenses 14,156 14,390
Depreciation 4,568 4,384
Other Taxes 2,117 1,881
------- -------
Total 20,841 20,655
------- -------
Operating Income 7,283 7,140
Other Income - Net 2,102 1,618
------- -------
Operating and Other Income 9,385 8,758
Interest Expense 4,370 4,369
------- -------
Pre-Tax Income 5,015 4,389
Income Taxes 1,880 1,636
------- -------
NET INCOME 3,135 2,753
Retained Earnings at Beginning of Period 7,349 7,261
------- -------
Total 10,484 10,014
------- -------
Dividends Declared:
Preferred Stock 14 15
Common Stock 2,890 2,650
------- -------
Total Dividends 2,904 2,665
------- -------
Retained Earnings at End of Period $ 7,580 $ 7,349
======= =======
Earnings Available for Common Shares $ 3,121 $ 2,738
======= =======
Average Common Shares Outstanding 2,449.8 2,290.1
------- -------
Basic and Diluted Earnings
Per Common Share $ 1.27 $ 1.20
======= =======
See Independent Accountants' Review Report and Notes to Financial Statements.
BERKSHIRE ENERGY RESOURCES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, June 30,
1999 1999
------------- --------
(Unaudited) (Audited)
ASSETS:
Property, Plant and Equipment - at original cost:
Gas-related activities $111,768 $110,405
Unregulated activities 14,084 14,007
-------- --------
125,852 124,412
Less: Accumulated Depreciation and amortization:
Gas-related activities 34,311 34,075
Unregulated activities 7,029 6,973
-------- --------
41,340 41,048
Property, Plant and Equipment - Net:
Gas-related activities 77,457 76,330
Unregulated activities 7,055 7,034
-------- --------
84,512 83,364
Current Assets:
Cash 44 117
Accounts Receivable:
Gas-related activities (less allowance for
doubtful accounts Sept.1999-$1,043;June 1999-$1,000) 4,154 6,498
Unregulated activities (less allowance for
doubtful accounts Sept. 1999-$15;June 1999-$19) 341 654
Inventories:
Gas-related activities (at cost) 5,424 4,137
Unregulated activities (at the lower
of average cost or market) 294 164
Recoverable Gas Costs 1,844 188
Prepayments and Other 839 1,238
Prepaid Taxes 1,671 397
-------- --------
Total Current Assets 14,611 13,393
-------- --------
Deferred Debits:
Unamortized Debt Expense - Net 2,124 2,150
Capital Stock Expense - Net 220 232
Environmental Cleanup Costs 827 718
Other 4,951 2,293
-------- --------
Total Deferred Debits 8,122 5,393
-------- --------
Recoverable Environmental Cleanup
Costs 3,335 3,335
-------- --------
TOTAL ASSETS $110,580 $105,485
======== ========
See Independent Accountants' Review Report and Notes to Financial Statements.
BERKSHIRE ENERGY RESOURCES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, June 30,
1999 1999
------------- --------
(Unaudited) (Audited)
CAPITALIZATION AND LIABILITIES
Common Shareholders' Equity:
Common Shares $ 28,725 $ 28,596
Retained Earnings 7,580 9,300
-------- --------
Total Common Shareholders' Equity 36,305 37,896
-------- --------
Redeemable Cumulative Preferred Stock 310 312
-------- --------
Long-Term Debt 40,000 40,000
-------- --------
Current Liabilities:
Notes Payable to Banks 13,736 7,100
Accounts Payable 2,484 2,636
Other Current Liabilities 2,307 2,628
-------- --------
Total Current Liabilities 18,527 12,364
-------- --------
Other Liabilities 1,711 1,538
-------- --------
Unamortized Investment Tax Credit 1,053 1,070
-------- --------
Deferred Income Taxes 9,339 8,970
-------- --------
Reserve for Recoverable Environmental
Cleanup Costs 3,335 3,335
-------- --------
TOTAL CAPITALIZATION AND LIABILITIES $110,580 $105,485
======== ========
See Independent Accountants' Review Report and Notes to Financial Statements.
BERKSHIRE ENERGY RESOURCES
CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited
(In Thousands)
Three Months Ended
--------------------
09/30/99 09/30/98
-------- --------
Cash flows from Operating Activities:
Net Loss $ (973) $ (876)
Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities:
Depreciation and Amortization 730 577
Provision for Losses on Accounts Receivable 99 99
Recoverable Gas Costs (1,656) (1,741)
Deferred Income Taxes 369 763
Changes in Assets and Liabilities
Which Provided (Used) Cash:
Accounts Receivable 2,558 2,467
Inventories (1,417) (959)
Accounts Payable (152) (300)
Taxes Accrued (1,274) (1,569)
Other (2,517) (537)
------- -------
Net Cash Used in Operating Activities (4,233) (2,076)
------- -------
Cash Flows Used in Investing Activities
Construction Expenditures (1,858) (1,814)
------- -------
Cash Flows Provided by (Used in)
Financing Activities:
Dividends Paid (747) (686)
Proceeds from Notes Payable 6,636 3,750
Proceeds from Other Stock Transactions - Net 129 782
------- -------
Net Cash Provided by Financing Activities 6,018 3,846
------- -------
Net Decrease in Cash (73) (44)
Cash at Beginning of Period 117 160
------- -------
Cash at End of Period $ 44 $ 116
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest(net of amount capitalized) $ 1,423 $ 1,422
======= =======
Income Taxes(net of refund) $ 173 $ 181
======= =======
See Independent Accountants' Review Report and Notes to Financial Statements.
Berkshire Energy Resources
Notes to Consolidated Financial Statements
September 30,1999
- ----------------------------------------------------------------------------
(Dollars in Thousands Except Share Amounts)
NOTES:
OTHER FINANCIAL INFORMATION:
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete consolidated financial statements. The
Company has reclassified certain amounts for prior years to conform with
the fiscal year 2000 presentation. All adjustments, which in the opinion of
management are necessary for a fair presentation of the operations for the
interim periods presented, have been made. These adjustments are of a
normal recurring nature. The results of operations for such interim periods
are not necessarily indicative of results of operations for a full year.
These consolidated financial statements should be read in conjunction with
the summary of accounting policies and notes to financial statements
included in the Company's Annual Report on Form 10-K for the year ended
June 30, 1999.
RISK MANAGEMENT POLICY
The Company is investigating the possibility of purchasing a vehicle
to insulate itself from warmer than normal weather during the fiscal year
2000 winter period.
CONTINGENCIES:
ENVIRONMENTAL:
Like other companies in the natural gas industry, the Company is a
party to governmental actions associated with former gas manufacturing
sites. Management estimates that expenditures to remediate and monitor
known environmental sites will range from $3,355 to $12,673. In accordance
with SFAS No. 5, the Company has recorded the most likely cost of $3,355.
The Company's unamortized cost at September 30, 1999 was $827 and should be
recovered over a seven-year period through the Local Distribution
Adjustment Clause (LDAC).
SEGMENT INFORMATION
The Company operates two segments: regulated activities and
unregulated diversified businesses. Gas-related activities (regulated)
consist primarily of natural gas distribution to residential, commercial and
industrial customers, as well as the sale and leasing of gas-burning
equipment. Diversified businesses (unregulated) consist primarily of the
distribution of liquefied petroleum gas, the commodity sale of energy to
commercial and industrial customers and providing on-premise HVAC (Heating
Ventilation and Air Conditioning) and plumbing services in commercial,
industrial and residential markets.
Information about the Company's operations, by business segments is
presented below. Because of the acquisition dates, unregulated activities
do not include any revenues from the most recent subsidiary acquisitions.
(See Results of Operations Twelve Months Ended September 30, 1999 -
Organizational Changes)
For the Three Months Ended 9/30/99
-----------------------------------
Regulated Unregulated
Activities Activities Total
---------- ----------- -----
Net Sales 4,139 636 4,775
Operating Margin 2,556 336 2,892
Operating Loss (986) (158) (1,144)
Net Loss (882) (91) (973)
For the Three Months Ended 9/30/98
-----------------------------------
Regulated Unregulated
Activities Activities Total
---------- ----------- -----
Net Sales 4,247 590 4,837
Operating Margin 2,688 328 3,016
Operating Loss (788) (176) (964)
Net Loss (793) (83) (876)
For the Twelve Months Ended 9/30/99
-----------------------------------
Regulated Unregulated
Activities Activities Total
---------- ----------- -----
Net Sales 45,663 5,008 50,671
Operating Margin 25,395 2,729 28,124
Operating Income 6,867 416 7,283
Net Income 2,893 242 3,135
For the Twelve Months Ended 9/30/98
-----------------------------------
Regulated Unregulated
Activities Activities Total
---------- ----------- -----
Net Sales 49,626 4,760 54,386
Operating Margin 25,486 2,309 27,795
Operating Income 6,831 309 7,140
Net Income 2,481 272 2,753
Subsequent Event:
On November 9, 1999, the Company signed a definitive merger agreement
with Energy East Corporation under which the Company will become a wholly-
owned subsidiary of Energy East. Energy East will acquire all of the
common shares of Berkshire Energy Resources for $38.00 per share in cash.
The transaction has an equity market value of approximately $96 million,
based on approximately 2,513,905 million Berkshire common shares
outstanding. Energy East will also assume approximately $40,000,000 of
Berkshire preferred stock and long-term debt. The transaction will be
accounted for using the purchase method of accounting.
The merger is subject to, among other things, the approvals of
Berkshire shareholders, and the Securities and Exchange Commission (SEC).
The Company expects the transaction to close by the end of the second
quarter of 2000.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ----------------------------------------------------------------------------
Results of Operations - First Quarter Ended September 30, 1999 versus First
Quarter Ended September 30, 1998
- ----------------------------------------------------------------------------
Consolidated net loss was $973,000 for the three months ended
September 30, 1999 compared to a loss of $876,000 for the same period a
year earlier. Operating Margin for both natural gas and propane decreased
$124,000 or 4.1 % as compared to 1998.
Operating Margin on sales of natural gas decreased $132,000 or 4.9%
as compared to 1998. The decrease was due to the migration of customers
from firm sales to transportation and interruptible rates. Operating
Margin (Operating Margin or Gross Profit = Operating Revenues net of Cost
of Gas Sold) is primarily affected by the level of firm gas sold and
transported. Interruptible gas sold and transported has minimal or no
effect on Operating Margin since those margins are primarily flowed back to
the firm customers through the Cost of Gas Adjustment Clause (CGAC) and
LDAC. The Company's sales are affected by weather as the majority of its
firm customers use natural gas for heating. Changes in the cost of natural
gas do not affect Operating Margin as these changes are recovered or
returned to customers through the CGAC.
1999 1998
---- ----
3 Month Firm MCF Sold & Transported 664,000 703,000
3 Month Consolidated Operating Margin $2,892,000 $3,016,000
Other Operating Expenses decreased $145,000 or 4.3% as compared with
1998, primarily due to lower pension and employee benefit costs.
Depreciation Expense increased $131,000 due to an increase in the
amount of depreciable assets.
Other Income - Net decreased $9,000 or 1.5% due to a charge off for
the retirement of used rental equipment, partially offset by increased
jobbing income.
Other Taxes increased $70,000, primarily due to increased personal
property taxes reflecting growth in plant assets and higher tax rates.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ----------------------------------------------------------------------------
Results of Operations - Twelve Months Ended September 30, 1999 versus
Twelve Months Ended September 30, 1998
- ----------------------------------------------------------------------------
Earnings available for Common Stock were $3,121,000 for the twelve
months ended September 30, 1999 as compared to $2,738,000 for 1998.
Operating Margin increased $329,000 or 1.1% from 1998. The increase
is primarily due to growth in the propane customer base in conjunction with
the acquisition of a local propane dealer.
1999 1998
---- ----
12 Month Firm MCF Sold & Transported 6,153,000 6,105,000
12 Month Consolidated Operating Margin $28,124,000 $27,795,000
Other Operating Expenses decreased by $234,000 as a result of lower
bad debts due to a change in the recovery mechanism for the portion of bad
debt expense related to gas costs, and a reduction of pension costs as a
result of very positive performance of various investment vehicles in which
fund assets are invested.
Depreciation increased $184,000 or 4.2% due to additions to plant
assets.
Other Taxes increased $236,000 or 12.5% due to increases in plant
property and municipal tax rates and payroll taxes related to increased
payroll.
Other Income - Net increased $484,000 or 2.9% primarily representing
proceeds recognized from weather insurance. The Company purchased
insurance to protect against warmer than normal weather for the winter
period.
Income Taxes increased $244,000 due to an increase in earnings.
Common Share Dividends increased by $240,000 or 9.1% due to
additional shares outstanding through the Company's Dividend Reinvestment
and Optional Cash Purchase Plan (DRIP) over the twelve-month period, and to
a lesser extent, an increase in the quarterly dividend to $.295 per share
from $.29 per share effective the fourth quarter of fiscal year 1999.
LIQUIDITY AND CAPITAL RESOURCES - SEPTEMBER 30, 1999
Cash flows used in operating activities have increased by $2,157,000
from the three months ended September 30, 1998, due to an increase in
accounts receivable and less cash from recoverable gas costs. Capital
requirements have been primarily funded by internal sources. The issuance
of long-term financing is dependent on management's evaluation of needs,
financial market conditions and other factors. Short-term financing is
used to meet seasonal cash requirements.
The Company initially finances construction expenditures and other
funding needs primarily with internal sources, short-term bank borrowings
and the reinvestment of dividends. The Company continually evaluates its
short-term borrowing position, and based on prevailing interest rates,
market conditions, and other considerations, makes determinations regarding
conversion of short-term borrowings to long-term debt or equity.
The Company added $1,858,000 to Property, Plant and Equipment during
the three months ended September 30, 1999. These construction expenditures
primarily represent investments in new and replacement mains and services.
Organizational Changes:
On September 10, 1999, Berkshire Energy Marketing, Inc. a wholly-
owned subsidiary of Berkshire Energy Resources changed its name to
Berkshire Service Solutions, Inc.
Berkshire Service Solutions is engaged in the commodity sale of
energy to commercial and industrial customers and provides on-premise HVAC
and plumbing services in commercial, industrial and residential markets.
This unregulated subsidiary on September 30, 1999, purchased the assets of
Yankee Plumbing & Heating, Inc. of Pittsfield, Massachusetts, a plumbing
and heating contractor. The firm is engaged in the sale and installation
of heating systems and service and maintenance work. Also, on October 14,
1999, the Company purchased the assets of Shedd Inc., also based in
Pittsfield. Services provided by Shedd include the sale, installation and
maintenance of boilers, furnaces, heat pumps and air conditioning equipment
and duct work. They also provide kitchen, bath and other installations,
equipment and appliances as well as sprinkler systems for industrial and
commercial businesses.
The acquisition of these companies demonstrates the Company's
commitment to expand opportunities in the competitive marketplace.
The capital structure of the Company at September 30, 1999 was 47.4%
Common Equity, .4% Preferred Stock and 52.2% Long-Term Debt.
Funds for environmental clean-up costs are initially financed through
short-term borrowings and all such costs will be recovered over a seven-
year period under a ruling issued by the Massachusetts Department of
Telecommunications and Energy (DTE).
Year 2000 Compliance
The Company has evaluated the impact of the Year 2000 on all mission
critical applications and significant third party suppliers. Necessary
remediation and system replacements have been substantially completed and
critical applications are considered Year 2000 ready.
During fiscal 1999, the Company completed the replacement of its core
business information systems including billing, customer service,
accounting, payroll and inventory. This system was vendor-certified Year
2000 compliant.
Other areas of the business not related to its core business
information systems have been tested and remediated. These areas include
meter reading, dispatch, desktop PC's, administrative, and telephone
systems and are now Year 2000 ready.
Due to the complexity of the Year 2000 problem and the reliance on
certain critical vendors and suppliers, there can be no guarantees that the
Company will achieve Year 2000 compliance or that critical vendors and
suppliers will achieve Year 2000 compliance. A vendor management program
has been completed as part of the Company's effort to obtain reasonable
assurances from key vendors that there will not be any interruptions in the
supply of goods and services as a result of the Year 2000 issues. The
Company is preparing strategies to address potential failures of
significant vendors in its contingency plans.
The Company has drafted a business contingency plan addressing Year
2000 risks associated with its internal systems, supplier or communications
failure. The plan includes continuation strategies for critical business
processes. The Company will continue to review and develop the contingency
plan through the second quarter of fiscal 2000.
The total cost to the Company of Year 2000 Compliance activities has
not been and is not anticipated to be material to its financial position or
results of operations in any given year. Management has budgeted fifty-
thousand dollars for fiscal year 2000 to address Year 2000 related
expenditures. These costs and the date on which the Company plans to
complete Year 2000 modification and testing processes are based on
management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of
certain resources, third party modification plans and other factors.
However, there can be no guarantee that these estimates will be achieved
and actual results could differ from those plans.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of
the Private Securities Litigation Reform Act of 1995
This Quarterly Report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those contemplated by such statements.
Such statements reflect management's current views, are based on many
assumptions and are subject to risks and uncertainties.
Certain important factors which could cause such results to differ
include risks associated with the Company's maintaining contracts with
specific customers, government regulation, the increasingly competitive
nature of the markets in which the Company is engaged, and dependence on
key personnel. These factors are not intended to represent a complete list
of the general or specific risks that may affect the Company.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
No developments during the quarter.
Item 2. Changes in Securities
---------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On November 4, 1999, the Annual Meeting of the shareholders of
Berkshire Energy Resources was held at the Crowne Plaza Hotel,
Pittsfield, Massachusetts at 10:00 a.m.
Proxies for said annual meeting were solicited pursuant to
Regulation 14A of the Securities Exchange Act of 1934. There was
no solicitation in opposition to Management's nominees, as listed
in the Proxy statement, for the election of Trustees. All
nominees were duly elected.
Item 5. Other Information
-----------------
Not Applicable
Item 6. Exhibits and Reports on Form 8 - K
----------------------------------
(a) List of Exhibits
Exhibit 27 - Financial Data Schedule
Exhibit 10(u) Asset Purchase Agreement between Berkshire Service
Solutions, Inc., and Yankee Plumbing & Heating Co., Inc., dated
September 30, 1999. Filed as part of Exhibit 10(u) to Berkshire
Energy Resources form 10-Q for the fiscal quarter ended September
30, 1999, File No. 0-1857-3, and filed herewith.
Exhibit 10(v) Asset Purchase Agreement between Berkshire Service
Solutions, Inc., and Shedd, Inc., dated October 14, 1999. Filed
as part of Exhibit 10(v) to Berkshire Energy Resources form 10-Q
for the fiscal quarter ended September 30, 1999, File No. 0-1857-3,
and filed herewith.
(b) Reports on Form 8-K:
A report on Form 8-K was filed on November 10, 1999, to
report the occurrence of an event covered by Item 5 by the
Company regarding a definitive merger agreement with Energy
East Corporation on November 9, 1999.
The consolidated balance sheet as of September 30, 1999, the related
consolidated statements of operations and retained earnings for the three
month and twelve month periods ended September 30, 1999 and 1998, and the
consolidated statements of cash flows for the three month periods ended
September 30, 1999 and 1998 have been reviewed, prior to filing, by the
Registrant's independent public accountants, Deloitte & Touche LLP, whose
report covering their review of the consolidated financial statements is
presented below.
Deloitte &
Touche LLP
-------------------------------------------------------
City Place Telephone:(860) 280-3000
185 Asylum Street Facsimile:(860) 280-3051
Hartford, Connecticut 06103-3402
INDEPENDENT ACCOUNTANTS' REPORT
Berkshire Energy Resources:
We have reviewed the accompanying balance sheet of Berkshire Energy
Resources (formerly The Berkshire Gas Company)(the "Company") as of
September 30, 1999, the related consolidated statements of operations and
retained earnings for the three month and twelve month periods ended
September 30, 1999 and 1998, and the consolidated statements of cash flows
for the three month periods ended September 30, 1999 and 1998. These
consolidated financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Berkshire Energy Resources as
of June 30, 1999, and the related consolidated statements of income,
shareholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated August 12, 1999, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of June 30, 1999 is fairly stated, in all material respects, in
relation to the balance sheet from which it has been derived.
/s/ Deloitte & Touche LLP
November 4, 1999
SIGNATURES
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 thereunto duly authorized.
Berkshire Energy Resources
Registrant
/s/ Michael J. Marrone
------------------------------------
Michael J. Marrone
Vice President, Treasurer &
Chief Financial Officer
Dated: November 15, 1999