Exhibit 99.1
Pacific Energy Partners, L.P. Reports Earnings for First Quarter 2005
LONG BEACH, Calif.--(BUSINESS WIRE)--May 4, 2005--Pacific Energy
Partners, L.P. (NYSE:PPX) (the "Partnership") announced that recurring
net income for the three months ended March 31, 2005, was $10.3
million, or $0.34 per limited partner unit, compared to $8.1 million,
or $0.31 per limited partner unit, in the first quarter of 2004. All
per unit numbers in the text of this news release are reported on a
diluted basis.
Recurring net income for the first quarter of 2005 excludes:
-- a $2.0 million expense associated with clean-up of the Line 63
oil release that occurred on March 23, 2005;
-- a $3.1 million expense related to the accelerated vesting of
restricted units under the Partnership's long-term incentive
plan, as a result of the change in control caused by the
purchase of the Partnership's general partner by LB Pacific,
LP on March 3, 2005; and
-- a $1.8 million expense incurred as a result of the general
partner transaction. This expense is required by generally
accepted accounting principles to be reported as a Partnership
expense, even though these costs were reimbursed to the
Partnership. The reimbursement is accounted for as a capital
contribution to the Partnership. This expense is charged to
the general partner in calculating the net income applicable
to the limited partner units.
Including the non-recurring expenses, net income for the three
months ended March 31, 2005, was $3.4 million, or $0.17 per limited
partner unit.
The results for the first quarter reflect the benefit of the
acquisition of the Rangeland pipeline system, higher pipeline volumes
on the West Coast and in the Rocky Mountains, lower spending for
Pacific Terminals, and the benefit of tariff increases on Line 2000 in
May 2004 and on Line 63 in November 2004. Partially offsetting these
increases were significantly lower gathering and blending margins for
Pacific Marketing and Transportation ("PMT"), and pipeline repair
costs associated with earth movement and stream erosion due to heavy
rainfall in Southern California.
"Our first quarter results continue to show the strength of our
strategic business units," stated Irv Toole, President and CEO. "The
Pacific Terminals storage and distribution system continues to produce
strong financial results in our West Coast Business Unit. Our Rocky
Mountain Business Unit has enjoyed increased market share for pipeline
shipments, as well as the benefit of the Canadian pipelines we
acquired in 2004. We're excited about the growth potential in both of
our business units."
On April 22, 2005, the Partnership announced an increase in its
cash distribution to $0.5125 per unit for the first quarter of 2005,
or $2.05 per unit annualized. This represents an increase of 2.5% over
its fourth quarter 2004 distribution level and 5.1% over its first
quarter 2004 distribution level. The distribution will be paid on May
13, 2005, to holders of record as of May 2, 2005.
Irv Toole commented, "We're pleased to increase our cash
distributions again this quarter. We've made substantial progress in
the reclamation of the Line 63 oil release and are happy to report
that Line 63 is back in operation. Our underlying business remains
strong, and we look forward to further increases in our cash
distributions as we execute our development plans for the Rangeland
pipeline system, complete additional acquisitions, and pursue key
expansion and development projects."
Distributable cash flow available to the limited partners'
interest for the first quarter of 2005 was $16.8 million. On a
weighted average and diluted basis, there were 29,673,000 limited
partner units outstanding during the first quarter of 2005,
approximately 18% more units outstanding than in the first quarter of
2004.
OPERATING RESULTS BY SEGMENT
WEST COAST BUSINESS UNIT
Operating income was $11.7 million for the three months ended
March 31, 2005, excluding the $2.0 million oil release expense,
compared to $12.3 million in the corresponding period in 2004.
West Coast pipeline volumes for the three months ended March 31,
2005, were approximately 4% higher than in the first quarter of 2004.
During the 2004 quarter, volumes were impacted by a significant amount
of Los Angeles area refinery maintenance, resulting in lower volumes
moving south to Los Angeles. In the 2005 quarter, the Partnership
experienced incremental revenue from tariff increases on Line 63 and
Line 2000 implemented in 2004. On May 1, 2005, the Partnership
increased its Line 2000 tariffs by 4.8% ($0.065 per barrel). Line 2000
averaged approximately 85,000 barrels per day ("BPD") in the first
quarter of 2005.
On March 23, 2005, the Partnership experienced a significant oil
release on Line 63 in northern Los Angeles County in the Pyramid Lake
area. The pipeline is owned and operated by the Partnership's wholly
owned subsidiary, Pacific Pipeline System LLC. The oil release was
caused by a rain-induced landslide, and is estimated at 3,400 barrels.
Oil containment, recovery and remediation activities have been ongoing
from the date of the release. On April 18, 2005, the Partnership
received the necessary approvals to begin the repair of Line 63, the
first phase of which was completed on April 25, 2005, and Line 63 was
returned to operation.
To mitigate the impact on customers and limit the potential loss
of revenue while the pipeline was out of service, the Partnership
transferred significant volumes of light crude oil from Line 63 to its
Line 2000 pipeline on a temporary basis. In addition, customers were
asked to shift volumes of Outer Continental Shelf ("OCS") crude oil
from Line 63 to Line 2000.
The total costs associated with the oil recovery and restoration
effort is estimated at $13.5 million. The Partnership believes that
its insurance carrier will pay these costs, excluding a $2.0 million
deductible. Additionally, the Partnership estimates the cost of
pipeline repairs associated with the Pyramid Lake landslide at $1.0
million, and the costs to address earth movement and stream erosion
problems at other locations along Line 63 and Line 2000 at $2.5
million, $0.6 million of which was incurred during the first quarter.
The costs associated with the repairs of the pipelines are not covered
by insurance. The Partnership has filed an application with the
California Public Utilities Commission to implement a temporary
surcharge of $0.10 per barrel on its Line 63 tariff rates to recover
the repair costs associated with this pipeline.
Pacific Terminals' storage facilities had a high rate of
utilization during the quarter, as well as increased storage capacity.
In the fourth quarter of 2004, vapor treating equipment was installed
at a cost of $0.6 million at the Pacific Terminals facilities. The
equipment is expected to reduce third-party contractor costs by
approximately $1 million annually, and succeeded in reducing those
costs in the first quarter by $0.3 million.
PMT achieved above-average margins in the first quarter of 2004,
but experienced lower margins in the first quarter of 2005, due to
pricing pressures from steeply discounted crude oil imports.
Contributing to the decrease in PMT's income was the interruption of a
scheduled sale due to the shut-down of Line 63 in late March. Looking
forward, a purchase contract that contributed to the unfavorable
margins during the quarter expired on March 31, 2005.
In March 2005, Shell Oil completed the sale of its Bakersfield
refinery to Flying J, Inc. The Partnership believes it is well
positioned to benefit from the refinery's continued operation and is
working with Flying J to deliver additional volumes of crude oil to
the Bakersfield refinery and deliver volumes from the refinery south
to the Los Angeles Basin.
The Partnership continues to advance the Pier 400 deepwater import
terminal project in the environmental permitting process, as well as
in securing additional customer commitments. The Partnership expects
to have the permits necessary to begin construction in early 2006,
with completion and start-up expected in 2007.
ROCKY MOUNTAIN BUSINESS UNIT
Operating income was $9.6 million for the three months ended March
31, 2005, compared to $3.6 million in the corresponding period in
2004. The increase included the results of the Rangeland and MAPL
acquisitions, which were completed in May and June of 2004,
respectively, as well as increased market share for pipeline shipments
of crude oil to Billings, Montana, and increased crude oil demand by
Salt Lake City refiners. Due to a fire at Suncor Energy, Inc.'s oil
sands production facility in Alberta, synthetic crude oil volumes to
Salt Lake City were lower than in the 2004 quarter. Shippers' volumes
are expected to return to normal during the second quarter of 2005.
The development of the new receiving terminal and pump station for
Rangeland, which will provide access to synthetic and other types of
crude oil in Edmonton, continues to progress. Construction of this
facility, together with additional tanks along the pipeline corridor,
is expected to be complete and begin operations at the beginning of
the fourth quarter of 2005.
To further meet growing demand and the resulting volume increases
in the Rocky Mountain region, the Partnership continues to work with
shippers on various projects, including an expansion of Frontier
Pipeline and a Phase II expansion of the Partnership's pipelines
serving Salt Lake City.
CORPORATE ITEMS
General and administrative expenses were $5.2 million in the first
quarter of 2005, which is approximately $1.3 million higher than in
the first quarter of 2004. This increase was associated with the
integration of the Rangeland acquisition, certain expensed costs
associated with the Pier 400 project and costs for compliance with the
Sarbanes-Oxley Act. These items were not applicable in the
corresponding period of 2004.
Interest expense was $5.6 million for the first quarter of 2005,
$1.5 million greater than in the same period of 2004, due to the debt
associated with the Canadian acquisitions, as well as higher floating
interest rates.
LOOKING FORWARD
For the quarter ending June 30, 2005, we are forecasting recurring
net income of $0.35 to $0.39 per unit. For full year 2005, we are
increasing our recurring net income guidance to $1.40 to $1.50 per
unit. The increase in guidance for full year recurring net income, up
from the previously announced $1.38 to $1.46 per unit, is due to
higher West Coast revenues from increased tariffs, Pacific Terminals'
increased utilization and higher volumes on our Rocky Mountain
pipelines.
For the full year, we are projecting total capital expenditures of
$38.6 million, including $25.1 million for expansion projects, $11.4
million for transition capital projects and $2.1 million for
sustaining capital projects.
OTHER MATTERS
The Partnership will host a conference call at 2:00 p.m. EDT
(11:00 a.m. PDT) on Wednesday, May 4, 2005, to discuss the results of
the first quarter of 2005. Please join us at www.PacificEnergy.com for
the live broadcast. The call, with questions and answers, will
continue to be available on the Partnership's web site following the
call.
About Pacific Energy:
Pacific Energy Partners, L.P. is a master limited partnership
headquartered in Long Beach. Pacific Energy is engaged principally in
the business of gathering, transporting, storing and distributing
crude oil and other related products in California and the Rocky
Mountain region, including Alberta, Canada. Pacific Energy generates
revenues primarily by transporting crude oil on its pipelines and by
leasing capacity in its storage facilities. Pacific Energy also buys,
blends and sells crude oil, activities that are complementary to its
pipeline transportation business.
This news release may include "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical fact included or
incorporated herein may constitute forward-looking statements.
Although Pacific Energy believes that the forward-looking statements
are reasonable, it can give no assurance that such expectations will
prove to be correct. The forward-looking statements involve risks and
uncertainties that may affect Pacific Energy's operations and
financial performance. Among the factors that could cause results to
differ materially are those risks discussed in Pacific Energy's
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2004.
The estimates associated with the oil release are based on facts
known at the time of estimation and the Partnership's assessment of
the ultimate outcome. Among the many uncertainties that impact the
estimates are the necessary regulatory approvals for, and potential
modification of remediation and repair plans, the amount of data
available at the time of the assessment of the impact of soil and
water contamination, the current uncertainty of the geological
conditions that will be encountered during the final repairs of the
Line 63 pipeline, changes in costs associated with environmental
remediation services and equipment and the possibility of third-party
legal claims giving rise to additional expenses. Therefore, no
assurance can be made that costs incurred in excess of the estimated
costs, if any, would not have a material adverse effect on the
Partnership's financial condition, results of operations or cash
flows, although the Partnership believes it is likely that most, if
not all, of any such excess cost, to the extent attributable to
clean-up and third-party claims, would be recoverable through
insurance. As new information becomes available in future periods, the
Partnership may change its expense accrual and recovery estimates.
For additional information about Pacific Energy, please visit our
website at www.PacificEnergy.com.
PACIFIC ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per unit amounts)
Three Months Ended March 31,
------------------------------
2005 2004
--------------- --------------
Operating revenues:
Pipeline transportation revenue $28,037 $24,727
Storage and distribution revenue 10,322 10,123
Pipeline buy/sell transportation
revenue 9,106 --
Crude oil sales, net of purchases 1,782 4,812
--------------- --------------
Net revenues 49,247 39,662
--------------- --------------
Expenses:
Operating 21,754 18,917
Line 63 oil release costs 2,000 --
General and administrative 5,172 3,854
Accelerated long-term incentive plan
compensation expense 3,115 --
Transaction costs(1) 1,807 --
Depreciation and amortization 6,529 5,242
--------------- --------------
Total expenses 40,377 28,013
--------------- --------------
Share of net income of Frontier 357 393
--------------- --------------
Operating income 9,227 12,042
Net interest expense (5,598) (4,126)
Other income 353 161
--------------- --------------
Income before foreign income tax
expense 3,982 8,077
--------------- --------------
Foreign income tax benefit (expense):
Current (732) --
Deferred 171 --
--------------- --------------
(561) --
--------------- --------------
Net income $3,421 $8,077
=============== ==============
Net income (loss) for the general
partner interest(2) $(1,702) $162
=============== ==============
Net income for the limited partner
interests(2) $5,123 $7,915
=============== ==============
Weighted average units outstanding:
Basic 29,655 24,999
Diluted 29,673 25,149
Basic net income per limited partner
unit $0.17 $0.32
=============== ==============
Diluted net income per limited partner
unit $0.17 $0.31
=============== ==============
(1) Pursuant to an Ancillary Agreement, our general partner reimbursed
us $1.8 million for costs incurred in connection with the sale of
our general partner. Generally accepted accounting principles
require us to record an expense with the reimbursement shown as a
partner's capital contribution.
(2) See "General Partner and Limited Partners Allocation of Net
Income" schedule included herein.
PACIFIC ENERGY PARTNERS, L.P.
(Unaudited)
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2005 2004
--------------- --------------
Assets
Current assets $150,342 $95,545
Property and equipment, net 715,580 718,624
Investment in Frontier Pipeline Company 8,200 7,886
Other assets 45,968 47,850
--------------- --------------
Total assets $920,090 $869,905
=============== ==============
Liabilities and Partners' Capital
Current liabilities $109,140 $48,045
Long-term debt 356,369 357,163
Deferred income taxes 34,248 34,556
Other long-term liabilities 7,362 7,675
Partners' capital 412,971 422,466
--------------- --------------
Total liabilities and partners'
capital $920,090 $869,905
=============== ==============
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
------------------------------
2005 2004
--------------- --------------
Cash flows from operating activities:
Net income $3,421 $8,077
Depreciation, amortization, non-cash
employee compensation under long-
term incentive plan, deferred
income taxes and Frontier(1)
adjustment 8,005 6,108
Working capital adjustments 4,506 (1,003)
--------------- --------------
Net cash provided by operating
activities 15,932 13,182
Cash flows from investing activities:
Acquisitions -- (9,920)
Net additions to property and
equipment (4,389) (2,413)
Other 129 --
--------------- --------------
Net cash used in investing
activities (4,260) (12,333)
Cash flows from financing activities:
Issuance of common units, net of
fees and offering expenses -- 114,250
Capital contribution from the
general partner 2,438 2,443
Proceeds from bank credit facilities 26,833 16,500
Repayment of bank credit facilities (25,854) (89,500)
Deferred financing costs (600) (175)
Distributions to partners (15,114) (12,390)
Related parties (661) 156
--------------- --------------
Net cash provided by (used in)
financing activities (12,958) 31,284
Net increase (decrease) in cash and
cash equivalents (1,286) 32,133
Cash and cash equivalents, beginning of
period 23,383 9,699
--------------- --------------
Cash and cash equivalents, end of
period $22,097 $41,832
=============== ==============
(1) Net Cash received from Frontier was $0 and $289 for the three
months ended March 31, 2005 and 2004, respectively.
PACIFIC ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND OPERATING HIGHLIGHTS BY SEGMENT
Three Months Ended March 31, 2005 and 2004
(Unaudited)
(In thousands)
Intersegment
Rocky and
West Coast Mountain Intrasegment
Operations Operations Eliminations(1) Total
---------- ---------- --------------- --------
Three Months Ended
March 31, 2005:
Segment revenue:
Pipeline
transportation
revenue $17,443 $12,456 $(1,862) $28,037
Storage and
distribution
revenue 10,472 -- (150) 10,322
Pipeline buy/sell
transportation
revenue -- 9,106 9,106
Crude oil sales, net
of purchases 1,812 -- (30) 1,782
---------- ---------- --------
Net revenue 29,727 21,562 49,247
---------- ---------- --------
Segment expenses:
Operating expenses 14,507 9,289 (2,042) 21,754
Line 63 oil release
costs(2) 2,000 -- 2,000
Depreciation and
amortization 3,477 3,052 6,529
---------- ---------- --------
Total expenses 19,984 12,341 30,283
---------- ---------- --------
Share of net income
of Frontier -- 357 357
---------- ---------- --------
Operating income(3) $9,743 $9,578 $19,321
========== ========== ========
Operating Data (barrels
per day, in thousands)
Line 2000 and Line 63
pipeline volume 138.5
Rangeland pipeline
system:
Sundre - North 21.4
Sundre - South 48.2
Western Corridor system
volume 22.5
Salt Lake City Core
system volume 108.7
Frontier pipeline
volume 38.3
Three Months Ended
March 31, 2004:
Segment revenue:
Pipeline
transportation
revenue $15,691 $10,543 $(1,507) $24,727
Storage and
distribution
revenue 10,223 -- (100) 10,123
Crude oil sales, net
of purchases 4,812 -- 4,812
---------- ---------- --------
Net revenue 30,726 10,543 39,662
---------- ---------- --------
Segment expenses:
Operating expenses 14,706 5,818 (1,607) 18,917
Depreciation and
amortization 3,765 1,477 5,242
---------- ---------- --------
Total expenses 18,471 7,295 24,159
---------- ---------- --------
Share of net income
of Frontier -- 393 393
---------- ---------- --------
Operating income(3) $12,255 $3,641 $15,896
========== ========== ========
Operating Data (barrels
per day, in thousands)
Line 2000 and Line 63
pipeline volume 133.6
Western Corridor
system volume 16.0
Salt Lake City Core
system volume 105.9
Frontier pipeline
volume 43.9
(1) Eliminations are required to account for revenue on services
provided by one subsidiary to another.
(2) On March 23, 2005, there was an oil release of approximately
3,400 barrels in northern Los Angeles County.
(3) General and administrative expense, accelerated long-term
incentive plan compensation expense, and transaction costs are not
allocated to segments. See "Reconciliation of Operating Income By
Segment to Condensed Consolidated Statements of Income" included
herein.
PACIFIC ENERGY PARTNERS, L.P.
(Unaudited)
(In thousands)
RECONCILIATION OF OPERATING INCOME BY SEGMENT TO CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
------------------------------
2005 2004
--------------- --------------
Operating income by segment:
West Coast $9,743 $12,255
Rocky Mountain 9,578 3,641
--------------- --------------
19,321 15,896
General expenses and other
income/(expense):(1)
General and administrative expense (5,172) (3,854)
Accelerated long-term incentive plan
compensation expense(2) (3,115) --
Transaction costs(3) (1,807) --
Interest expense (5,598) (4,126)
Other income 353 161
Foreign income tax expense (561) --
--------------- --------------
Net income $3,421 $8,077
=============== ==============
GENERAL PARTNER AND LIMITED PARTNERS ALLOCATION OF NET INCOME
Three Months Ended March 31,
------------------------------
2005 2004
--------------- --------------
(in thousands)
Net income $3,421 $8,077
--------------- --------------
Transaction costs reimbursed by general
partner:
Senior Notes consent solicitation and
other costs 893 --
Severance costs 914 --
--------------- --------------
Total transaction costs reimbursed
by general partner 1,807 --
--------------- --------------
Income before transaction costs
reimbursed by general partner 5,228 8,077
General partner's share of income 2% 2%
--------------- --------------
General partner allocated share of net
income before transaction costs 105 162
Transaction costs reimbursed by general
partner (1,807) --
--------------- --------------
Net income (loss) allocated to general
partner $(1,702) $162
=============== ==============
Income before transaction costs
reimbursed by general partner $5,228 $8,077
Limited partners share of income 98% 98%
--------------- --------------
Limited partners share of net income $5,123 $7,915
=============== ==============
Net income (loss) allocated to general
partner (1,702) 162
Net income allocated to limited
partners 5,123 7,915
--------------- --------------
Net income $3,421 $8,077
=============== ==============
(1) General and administrative expenses, accelerated long-term
incentive plan expense, transaction costs, interest expense,
other income, and foreign income tax expense are not allocated
among the West Coast and Rocky Mountain business units.
(2) On March 3, 2005, in connection with the change in control of the
Partnership's general partner, all restricted units outstanding
under the Long-Term Incentive Plan became immediately vested
pursuant to the terms of the grants. The Partnership recognized
accelerated compensation expense of $3.1 million relating to the
vesting.
(3) Pursuant to an Ancillary Agreement, our general partner reimbursed
us $1.8 million for costs incurred in connection with the sale of
our general partner. Generally accepted accounting principles
require us to record an expense with the reimbursement shown as a
partner's capital contribution.
PACIFIC ENERGY PARTNERS, L.P.
RECONCILIATION OF NET INCOME TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Amounts in thousands, except per unit amounts)
RECONCILIATION OF NET INCOME
TO RECURRING NET INCOME
Three Months Ended March 31,
------------------------------
2005 2004
--------------- --------------
Net income $3,421 $8,077
Add: Line 63 oil release costs(1) 2,000 --
Add: Accelerated long-term incentive
plan compensation expense(2) 3,115 --
Add: Transaction costs(3) 1,807 --
--------------- --------------
Recurring net income $10,343 $8,077
=============== ==============
Recurring net income for the general
partner interest $207 $162
=============== ==============
Recurring net income for the limited
partner interest $10,136 $7,915
=============== ==============
Basic recurring net income per limited
partner unit $0.34 $0.32
=============== ==============
Diluted recurring net income per
limited partner unit $0.34 $0.31
=============== ==============
RECONCILIATION OF NET INCOME
TO DISTRIBUTABLE CASH FLOW(4)
Three Months Ended March 31,
------------------------------
2005 2004
--------------- --------------
Net income $3,421 $8,077
Add: Line 63 oil release costs(1) 2,000 --
Add: Accelerated long-term incentive
plan compensation expense(2) 3,115 --
Add: Transaction costs(3) 1,807 --
--------------- --------------
Recurring net income 10,343 8,077
Plus: depreciation and amortization 6,529 5,242
Plus: amortization of bond discount
and debt issue costs 459 311
Plus: non-cash employee compensation
under long-term incentive plan 229 659
Less: deferred income tax recovery (171) --
Less: sustaining capital expenditures (240) (547)
--------------- --------------
Distributable Cash Flow $17,149 $13,742
=============== ==============
General Partner interest in
Distributable Cash Flow $343 $275
=============== ==============
Limited partner interests in
Distributable Cash Flow $16,806 $13,467
=============== ==============
(1) On March 23, 2005, there was an oil release of approximately 3,400
barrels in northern Los Angeles County. Although this event will
involve an outlay of cash, we believe these costs are unusual and
are not indicative of the Partnership's recurring earnings.
(2) The cash cost associated with the accelerated vesting of units is
$2.0 million. However, we have not deducted this amount in
determining distributable cash flow as the accelerated vesting was
unusual and not indicative of the Partnership's recurring
earnings.
(3) Pursuant to an Ancillary Agreement, our general partner reimbursed
us $1.8 million for costs incurred in connection with the sale of
our general partner. Generally accepted accounting principles
require us to record an expense with the reimbursement shown as a
partner's capital contribution.
(4) Distributable Cash Flow provides additional information for
evaluating our ability to make the minimum quarterly distribution
and is presented solely as a supplemental measure. You should not
consider Distributable Cash Flow as an alternative to net income,
income before taxes, cash flow from operations or any other
measure of financial performance presented in accordance with
accounting principles generally accepted in the United States. Our
Distributable Cash Flow may not be comparable to similarly titled
measures of other entities. Additional information regarding
distributable cash flow is included in our annual report on Form
10-K for the year ended December 31, 2004.
CONTACT: Pacific Energy Partners, L.P.
Aubrye Harris, 562-728-2871
Fax: 562-728-2881
Email: aharris@PacificEnergy.com