Corporate Information
Corporate Info

Printer Friendly Version Print Version
SEMCO ENERGY's Leadership Team Updates Shareholders on Company's Strategic, Operational, Financial Progress
     At Company's Annual Meeting, Chairman John Hinton and President/CEO
   George Schreiber Describe Actions to Sharpen Company's Strategic Focus,
           Strengthen its Capital Position, Build Shareholder Value

FARMINGTON HILLS, Mich., May 25 /PRNewswire-FirstCall/ -- The new non-executive Chairman, and the new President and Chief Executive Officer, of SEMCO ENERGY, Inc. (NYSE: SEN), John Hinton and George A. Schreiber, Jr., respectively, yesterday provided SEMCO ENERGY shareholders with an update on the Company's strategic, operational and financial progress.

Speaking at the Company's Annual Meeting of Shareholders at the McMorran Auditorium in Port Huron, Mich., Messrs. Hinton and Schreiber described recent steps to sharpen the Company's strategic focus, strengthen its capital position, improve its financial performance, and build value for SEMCO ENERGY shareholders. They also noted the Company's continued top-tier performance in meeting the gas distribution needs of its nearly 393,000 customers in Michigan and Alaska.

Mr. Hinton, a SEMCO ENERGY board member since 2002 whose appointment as the Company's non-executive Chairman took effect in December 2003, acknowledged that the Company's cumulative investment performance over the past five years had trailed both its peer group and the S&P 500 index. "By far the most significant factor in this underperformance was the Company's decision to acquire several construction businesses between 1997 and 2000," Mr. Hinton said. "The performance of these businesses, in combination with the debt load incurred to purchase them, dragged down the results of the entire company."

"It is important to note, however," Mr. Hinton continued, "that in spite of warmer-than-normal weather throughout this period, our core gas distribution businesses performed strongly in both Michigan and Alaska." He pointed to several major initiatives currently under way aimed at improving the Company's strategic focus and financial strength, including the previously announced decision to divest the Company's Construction Services business, the pending sale of its Alaskan pipeline, and its issuance of $50 million of convertible preference stock.

At the Annual Meeting, Mr. Schreiber, whose appointment as President and CEO was announced on March 10, provided his view of SEMCO ENERGY's strategic direction, operational strength, and financial outlook. He praised the continued strong performance of SEMCO ENERGY's gas distribution operations, expressed confidence in the Company's management team, and emphasized his determination to restore the Company's credibility with investors and to enhance shareholder value.

Summarizing his Annual Meeting remarks, Mr. Schreiber said, "SEMCO ENERGY's gas distribution operations have been, and continue to be, operationally and financially strong. As we take the steps necessary, in the months ahead, to divest our Construction business, complete our transformation into a gas distribution company, and improve our capital structure, we will be increasingly well positioned to achieve earnings growth and build SEMCO ENERGY's value for our shareholders.

These steps include:

-- Moving forward on the previously announced sale of Alaska Pipeline Company, a $95 million transaction.

-- Achieving the sale of our Construction Services business. We have already held discussions with several potential purchasers and are currently in advanced discussions. We hope to announce a definitive agreement in the near future and to close a transaction before year end.

-- Completing the previously announced issuance of $50 million of preference stock. In March 2004 we issued $31 million of that amount to an affiliate of k1 Ventures Limited. Having now received the necessary shareholder approval, we plan to issue the remaining $19 million in the near future."

At the Annual Meeting, Mr. Schreiber said that SEMCO ENERGY currently has, and is committed to maintain, excellent customer service -- as well as outstanding relationships with its regulators in Michigan and Alaska. SEMCO ENERGY's operational performance, as measured by such standard industry benchmarks as customers per employee and operation and maintenance cost per customer, places the Company near the top of comparisons with its industry peers.

Mr. Schreiber told the Company's shareholders that SEMCO ENERGY is, and will continue to be, an organization committed to maintaining a safe workplace, where employees are challenged and rewarded for their efforts. He also said that the Company will continue to explore, in a focused and disciplined manner, opportunities to grow the Company's businesses. Such opportunities will complement those SEMCO ENERGY already has and position the Company to grow shareholder value.

SEMCO ENERGY, Inc. is a diversified energy and infrastructure company that distributes natural gas to more than 391,000 customers in Michigan and Alaska. It also owns and operates businesses involved in natural gas pipeline construction services, propane distribution, intrastate pipelines and natural gas storage in various regions of the United States. In addition, it provides information technology and outsourcing services, specializing in the mid-range computer market.

The following is a "Safe-Harbor" statement under the Private Securities Litigation Reform Act of 1995. This release contains forward-looking statements that involve risks and uncertainties. Statements that are not historic facts, including statements about the Company's outlook, beliefs, plans, goals and expectations, are forward-looking statements. Factors that may impact these forward-looking statements include, but are not limited to, the effects of weather, the economic climate, competition, commodity prices, Changing conditions in the capital markets, regulatory approval processes, success in obtaining new business, the Company's ability to implement its strategic, operational and financial initiatives, management performance and other risks detailed from time to time in the Company's Securities and Exchange Commission filings.

    -0-                             05/25/2004
    /CONTACT:  Analysts Contact: Thomas Connelly, Director of Investor
Relations, +1-248-702-6000, ext. 6240, Media Contact: Laurie Owens,
Director of Customer Service, +1-810-985-7900, ext. 2023, E-mail: , both of SEMCO ENERGY, Inc./
    /Web site: /

ST:  Michigan, Alaska

-- DETU021 --
2145 05/25/2004 14:30 EDT
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SEMCO Energy's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

©2006 SEMCO ENERGY, Inc., All Rights Reserved.