content: Securities and Exchange Commission
                                   
                         Washington, DC  20549
                                   
                               Form 8-K
                                   
                            Current Report
                                   
                Pursuant to Section 13 or 15(d) of the
                     Securities Exchange Act 1934
                                   
                                   
                    Date of Report October 22, 1998
                   (Date of earliest event reported)
                                   
                                   
                                   
                        CalEnergy Company, Inc.
        (Exact name of registrant as specified in its charter)
                                   
  
  
      Delaware                     1-9874               94-2213782
  (State of other              (Commission File       (IRS Employer
   jurisdiction of                 Number)          Identification No.)
   incorporation)
  
  
  
   302 South 36th Street, Suite 400,     Omaha, NE     68131
         (Address of principal executive offices)     Zip Code
  
  Registrant's Telephone Number, including area code:    (402) 341-4500
  
  
                                N/A
   (Former name or former address, if changed since last report)
  <PAGE>
  Item 5.  Other Events
  
        On  October 22, 1998, the Registrant reported results for the
  three  and  nine months ended September 30, 1998.  A  copy  of  the
  press  release  issued  by the Registrant  is  attached  hereto  as
  Exhibit 1 and is incorporated herein by reference.
  
        Certain information included in this report contains forward-
  looking   statements  made  pursuant  to  the  Private   Securities
  Litigation Reform Act of 1995 ("Reform Act").  Such statements  are
  based  on  current expectations and involve a number of  known  and
  unknown risks and uncertainties that could cause the actual results
  and  performance  of the Registrant to differ materially  from  any
  expected  future results or performance, expressed or  implied,  by
  the forward-looking statements including expectations regarding the
  future  results of operations of Registrant and MidAmerican  Energy
  Holdings  Company and the combined company, the intended  financing
  of  the  merger and receipt of regulatory approvals.  In connection
  with  the  safe harbor provisions of the Reform Act, the Registrant
  has identified important factors that could cause actual results to
  differ  materially  from such expectations,  including  development
  uncertainty,   operating   uncertainty,  acquisition   uncertainty,
  uncertainties  relating to doing business  outside  of  the  United
  States,    uncertainties   relating   to   geothermal    resources,
  uncertainties  relating  to  domestic  and  international  (and  in
  particular,  Indonesian)  economic  and  political  conditions  and
  uncertainties  regarding  the impact  of  regulations,  changes  in
  government   policy,   industry   deregulation   and   competition.
  Reference is made to all of the Registrant's SEC Filings, including
  the  Proxy Statement and the Registrant's Report on Form 8-K  dated
  March  6, 1998, incorporated herein by reference, for a description
  of  such factors.  The Company assumes no responsibility to  update
  forward-looking information contained herein.
  
  
  Item 7.  Financial Statements and Exhibits
  
  Exhibit 1 - Press Release dated October 22, 1998
  
  
  <PAGE>
                             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.
  
                                     CalEnergy Company, Inc.
  
  
  
  
                                  By: \s\ Douglas L. Anderson
                                          Douglas L. Anderson
                                          Assistant Secretary and
                                          Assistant General Counsel
  
  
  
  
  Dated: November 10, 1998
  <PAGE>
  
                               EXHIBIT 1
  
  
  FOR IMMEDIATE RELEASE
  
  Craig M. Hammett - Senior Vice President, Chief Financial Officer 402-341-4500
  Craig S. Allen - Manager, Investor Relations                      402-341-4500
  Diana Nelson - Brunswick, Media Relations                         212-333-3810
  
              CalEnergy Reports 14% Increase in Revenues
                and 10% Increase in Earnings Per Share
  
       OMAHA,  NEBRASKA, October 22, 1998 -- CalEnergy Company,  Inc.
  ("CalEnergy"  or  the "Company") (NYSE:  CE;  PCX  and  LSE)  today
  reported results for the three and nine months ended September  30,
  1998.  Highlights are as follows:
  
       Three Months Ended September 30, 1998 (compared to same period
  in 1997)
  
       Revenues increased 14% to $627.7 million from $551.9 million
       in 1997
       Net income increased 3% to $47.6 million from $46.4 million in 
       1997 (1)
       Net income per basic share increased 10% to $0.80 from $0.73
       in 1997 (1)
       Diluted earnings per share increased 8% to $0.72 from $0.67 in
       1997 (1)
       Earnings before interest, taxes, depreciation and amortization
       increased 16% to $253.0 million from $218.2 million in 1997
       
       Nine  Months Ended September 30, 1998 (compared to same period
  in 1997)
       
       Revenues increased 15% to $1.89 billion from $1.64 billion in
       1997
       Net income increased 3% to $107.4 million from $104.7 million
       in 1997 (1)
       Net income per basic share increased 8% to $1.78 from $1.65 in
       1997 (1)
       Diluted earnings per share increased 7% to $1.67 from $1.56 in
       1997 (1)
       Earnings before interest, taxes, depreciation and amortization
       increased 16% to $698.8 million from $604.3 million in 1997
       
       (1) Before extraordinary item in 1997.
       
  The  third quarter of 1998 contained many notable events which  are
  described in greater detail below:
  
  MidAmerican Merger Agreement
  
        On  August  12, 1998, CalEnergy announced the approval  of  a
  definitive  merger  agreement  with  MidAmerican  Energy   Holdings
  Company  ("MidAmerican").  The Company will pay $27.15 in cash  for
  each  MidAmerican common share outstanding, valuing MidAmerican  at
  approximately  $4.2  billion, including $1.6 billion  of  debt  and
  preferred stock which will remain outstanding at MidAmerican  after
  the  acquisition.  MidAmerican, a leading regional provider of low-
  cost  energy and related services, provides electricity to  648,000
  customers  and natural gas to 619,000 customers in Iowa,  Illinois,
  Nebraska  and South Dakota.  In the year ended December  31,  1997,
  MidAmerican generated revenues of over $1.9 billion and had  assets
  of approximately $4.3 billion.
  
  
                                -more-
  CalEnergy Company, Inc
  October 22, 1998
  Page -2-
  
  MidAmerican Merger Agreement (Cont.)
  
       All of the necessary regulatory applications and notifications
  have been filed with the Federal Energy Regulatory Commission,  the
  Nuclear  Regulatory  Commission, the  Department  of  Justice,  the
  Federal  Trade Commission and the Iowa Utilities Board.  On October
  13,  1998, the Company announced that the waiting period under  the
  Hart-Scott-Rodino Antitrust Improvements Act of  1976  expired  and
  that federal antitrust clearance had therefore been obtained.   The
  Company has scheduled a special shareholders meeting on October 30,
  1998  to  obtain  approval to reincorporate CalEnergy  as  an  Iowa
  corporation and approve the proposed merger.
  
       Completion  of the merger is expected to occur by the  end  of
  the  first  quarter 1999.  The combined enterprise is  expected  to
  have  total  assets  of  approximately $13  billion,  total  annual
  revenues  of  more than $5 billion and will serve over 3.3  million
  retail  customers.  The transaction is expected to be accretive  to
  earnings in the first full year of combined operations.
  
  Successful Completion of a $1.4 Billion Senior Note and Bond
  Offering
  
        On  September  22, 1998, CalEnergy closed the  sale  of  $1.4
  billion  aggregate principal amount of its Senior Notes  and  Bonds
  with  a  weighted  average maturity of 15.5 years  and  a  weighted
  average  interest rate of 7.7%.  The Senior Notes  and  Bonds  were
  rated  BB+,  Ba1 and BB+ by Standard & Poor's, Moody's and  Duff  &
  Phelps,  respectively, and CalEnergy's long term  senior  debt  was
  placed  on  credit watch with positive implications for a  possible
  upgrade  by  all  three  rating  agencies  following  the  proposed
  MidAmerican merger.
  
        Approximately $830 million in net proceeds of the Senior Note
  and Bond Offering (the "Offering") is expected to be utilized as  a
  component  of  the  funding  necessary  to  complete  the   pending
  MidAmerican merger.  In addition, approximately $543 million of the
  net  proceeds  of the Offering is expected to be used to  refinance
  the Company's outstanding 10 1/4% Senior Discount Notes, which become
  callable  on January 15, 1999.  In October, the Company repurchased
  approximately $156 million of the 10 1/4% Senior Discount Notes.
  
  Operations
       
       United States
  
        The Company's Coso and Imperial Valley geothermal projects in
  the U.S. continued to operate at high efficiencies and received the
  maximum   capacity  payments  allowed  by  their   Power   Purchase
  Agreements  during the third quarter of 1998.  These  11  projects,
  representing  532  net megawatts, operated with a  high  degree  of
  availability and without any major interruptions during the quarter
  --- the period of heaviest demand for electricity in the region and
  which yields the highest revenue for delivered power.
  
       United Kingdom
  
        Northern  Electric,  the Company's subsidiary  in  the  U.K.,
  continues to expand its gas customers and has increased gas  supply
  revenues  by  $86.1 million to $99.6 million for  the  nine  months
  ended  September 30, 1998, compared to $13.5 million for  the  nine
  months ended September 30, 1997.  Also, included in the nine  month
  results  are  initial customer acquisition costs of  $31.1  million
  related  to  commissions  and opening meter  reads.   Northern  has
  acquired over 600,000 new gas customers since the inception of  its
  `Dual Fuel' marketing campaign in 1997.  Over 400,000 of these  gas
  customers  are  on supply with the remaining 200,000 gas  customers
  currently progressing through the registration process.
  
                                -more-
  CalEnergy Company, Inc
  October 22, 1998
  Page -3-
  
  Operations - United Kingdom (Cont.)
  
       Northern Electric has also continued to grow the above 100
  kilowatt market.  The last three major contract rounds produced the
  following results:
  
                 Volume to                    Sales
                 Renew (GWh)              Achieved (GWh)
  Increase
  
  October, 1997       1,808                    2,366                31%
  
  April, 1998         1,631                    2,386                46%
  
  October, 1998       2,000                    4,330               116%
  
       Total gas (GWh equivalent) and electricity supplied has
  increased by 47% to 16,505 GWh for the nine months ended September
  30, 1998 from 11,248 GWh for the same period in 1997.
  
       In addition, Northern's service territory is scheduled to open
  to retail electricity competition for the less than 100 kilowatt
  market on November 4, 1998.  The Company believes that Northern is
  fully prepared to engage in cost-effective marketing of their
  widely-respected brand name.
  
       Philippines
  
        CalEnergy's projects in the Philippines, representing 500 net
  megawatts, continue to deliver electricity to the Republic  of  the
  Philippines and have received all monthly payments as scheduled.
  
  Salton Sea Expansion
  
       Zinc Recovery Project
  
        Construction of the Zinc Recovery Project has commenced.  The
  project  will  extract  minerals, initially zinc,  from  geothermal
  brine.   The zinc extraction process will use ion exchange, solvent
  extraction and electrowinning to extract and plate zinc from  spent
  geothermal  fluid after it is used to generate electricity  at  the
  existing Imperial Valley geothermal projects.
  
       Debt Offering
  
       On  October 13, 1998, CalEnergy announced that the Salton  Sea
  Funding  Corporation had closed the sale of $285 million  principal
  amount of its 7.475% Senior Secured Series F Bonds due November 30,
  2018.
       
       Proceeds  from the issuance of Funding Corporation Bonds  will
  be  used to fund construction of two new geothermal projects at the
  Salton  Sea totaling 59 net megawatts, to partially fund the  costs
  of  construction of the related Zinc Recovery Project,  to  fund  a
  portion  of the costs associated with the upgrade of certain  brine
  processing facilities and for other capital improvements to the 
  steamfield and related  facilities at the existing Salton Sea Projects.   
  Moody's Investor's Service raised the Funding Corporation Bonds' investment
  grade  rating  from Baa3 to Baa2, and Standard & Poor's  reaffirmed
  the ratings at BBB-.
  
  
  
                                -more-
  
  
  
  
  
  CalEnergy Company, Inc.
  October 22, 1998
  Page -4-
       
  $60 Million of New Renewable Resource Funding Awarded
  
       On  July  13,  1998, the Company announced that three  of  its
  subsidiaries  had  been selected as winning bidders  for  financial
  incentives by the California Energy Commission from funds set aside
  under   AB   1890,  California's  landmark  electric   deregulation
  legislation, which was passed in 1996.  Each of the three CalEnergy
  subsidiaries  is proposing to develop, own and operate  a  separate
  geothermal  power  project in California, for a total  of  107  net
  megawatts  of new capacity.  The total financial incentive  payment
  available  to CalEnergy is approximately $60 million  and  will  be
  received by the Company over a five year
  period following the completion of the new geothermal projects.
       
       CE  Casecnan's Senior Secured Debt Rating Upgraded by Standard
  & Poor's
  
       On  July 14, 1998, CalEnergy announced that Standard &  Poor's
  upgraded its subsidiary CE Casecnan Water and Energy Company,  Inc.
  ("CE  Casecnan") senior secured debt rating to "BB+  with  negative
  outlook"  from  "BB with negative Credit Watch".   CE  Casecnan  is
  constructing a combined hydroelectric and irrigation project in the
  Philippines.   The  project  is  on  schedule  and  on  budget  for
  completion  by mid 2000.  The negative outlook is solely  based  on
  the foreign currency rating of the Republic of the Philippines, the
  guarantor of the project's contractual payments.
       
  Indonesia
  
        On  August 14, 1998, the Dieng and Patuha projects filed  for
  arbitration  under the United Nations Commission  on  International
  Trade  Law rules against PLN, the Government of Indonesia's wholly-
  owned electric utility, and the Government of Indonesia for failure
  to  pay  for electricity under the Company's "take or pay" contract
  and   failure  to  honor  its  sovereign  guarantees.   Arbitration
  proceedings represent a contractually required step in the  process
  of collecting monies due from PLN and the Government of Indonesia.
  
  Stock Repurchase Program
  
       Since November 1997, the Company has repurchased approximately
  3.7 million common shares in open market transactions.  On February
  23,  1998, CalEnergy announced that it had increased the authorized
  purchase  amounts in its stock repurchase program to three  million
  shares  of  its common stock.  During the third quarter  1998,  the
  Company repurchased 497,000 common shares and has approximately 2.3
  million  shares remaining of the three million shares approved  for
  repurchase.
  
  Commenting on the results and the events during the third quarter
  1998, David L. Sokol, Chairman and Chief Executive Officer, stated:
  
       "This  has  been a record quarter for operations at  CalEnergy
  and we are very excited about the opportunities that lie ahead.  We
  are  particularly pleased with the strong performance and  progress
  made at Northern Electric, our U.K. electric and gas utility.   Our
  projects in the Philippines also continue to perform well  and  are
  showing strong operating results."
       
       "We   believe   our  nine  month  financial   results,   which
  demonstrate  continued growth in EBITDA and EPS,  are  particularly
  noteworthy  in  light of the fact that during the  period  earnings
  were  negatively  impacted by severe winter weather  conditions  in
  upstate   New   York,   the   continuing  Indonesian   uncertainty,
  significant customer acquisition costs incurred at Northern and the
  pricing  of  two of the Company's ISO4 contracts have decreased  to
  avoided cost."
       
                                -more-
  CalEnergy Company, Inc.
  October 22, 1998
  Page -5-
       
       
       "The  situation  in  Indonesia is contained.   In  the  fourth
  quarter  of last year, we announced a full write off of our  equity
  exposure.   We have subsequently commenced arbitration  proceedings
  and  also carry political risk insurance coverage on our Indonesian
  assets."
  
       "The MidAmerican Energy transaction is proceeding smoothly and
  we  look forward to a speedy completion and the combination of  the
  skills of two strong management teams.  We believe MidAmerican will
  provide an excellent platform for growth as the U.S. energy markets
  restructure.  Our  enlarged  company will  be  a  powerful  entity,
  positioned for growth in the energy markets worldwide."
  
        This  press release contains forward-looking statements  made
  pursuant  to the Private Securities Litigation Reform Act  of  1995
  ("Reform  Act").  Such statements are based on current expectations
  and  involve  a number of known and unknown risks and uncertainties
  that  could cause the actual results and performance of the Company
  to   differ   materially  from  any  expected  future  results   or
  performance,   expressed   or  implied,  by   the   forward-looking
  statements.  In connection with the safe harbor provisions  of  the
  Reform Act, the Company has identified important factors that could
  cause  actual  results to differ materially from such expectations,
  including    development   uncertainty,   operating    uncertainty,
  uncertainties  relating to doing business  outside  of  the  United
  States,    uncertainties   relating   to   geothermal    resources,
  uncertainties  relating  to  domestic  and  international  (and  in
  particular,  Indonesian)  economic  and  political  conditions  and
  uncertainties  regarding  the impact  of  regulations,  changes  in
  government   policy,   industry   deregulation   and   competition.
  Reference  is  made to all of the Company's SEC filings,  including
  the  Company's Report on Form 8-K dated March 6, 1998, incorporated
  herein  by  reference,  for a description  of  such  factors.   The
  Company   assumes   no  responsibility  to  update  forward-looking
  information contained herein.
  
       CalEnergy  is  a global energy company that manages  and  owns
  interests   in  over  5,000  net  megawatts  of  power   generation
  facilities  in  operation, construction and development  worldwide.
  The  Company  develops  and produces energy from  diversified  fuel
  sources   including  geothermal,  natural  gas  and  hydroelectric.
  Through  its  subsidiary Northern Electric, CalEnergy supplies  and
  distributes  electricity and gas to 2.0 million  customers  in  the
  United Kingdom.  CalEnergy conducts business in the U.S., U.K., the
  Philippines, Indonesia, Poland and Australia, and employs more than
  4,200  people  worldwide.  For the year ended  December  31,  1997,
  CalEnergy generated revenues of over $2.2 billion and had assets of
  approximately $7.5 billion.
       
                           www.calenergy.com
                                   
                                -more-
                                   
                                   
  CalEnergy Company, Inc.
  October 22, 1998
  Page -6-
                                                                     
                          CALENERGY COMPANY, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, expect per share amounts)
                               (unaudited)
                                                                     
                                                         
                                 Three Months              Nine Months
                                     Ended                    Ended
                                  September 30             September 30
                                 1998      1997          1998        1997
                                                                     
  Revenues:                                                             
  Operating revenue         $ 600,862  $ 527,896   $1,813,302   $1,576,407
  Interest and other income    26,885     23,997       79,274       66,456
  Total revenues              627,747    551,893    1,892,576    1,642,863
                                                                     
  Costs and Expenses:
  Cost of sales               265,605    239,081      848,018      746,626
  Operating expense            99,052     82,513      312,830      254,389
  General and administration   10,085     12,068       32,943       37,560
  Depreciation and 
  amortization                 81,449     69,877      247,033      207,789
  Net interest expense         81,286     64,361      241,015      187,824
  Total costs and expenses    537,477    467,900    1,681,839    1,434,188
                                                                     
  Income before income taxes   90,270     83,993      210,737      208,675
  Provision for income taxes   32,112     27,929       72,595       74,520
                                                                     
  Income before minority
  interest                     58,158     56,064      138,142      134,155
  Minority interest            10,535      9,656       30,758       29,410
                                                                     
  Net income before
  extraordinary item           47,623     46,408      107,384      104,745
                                                                     
  Extraordinary item, net of 
  minority interest 
  of $58,222                        -   (135,850)           -     (135,850)
  
  Net income (loss)available 
  for common shareholders    $ 47,623  $ (89,442)   $ 107,384    $ (31,105)
  
  Net income per share before
  extraordinary item - basic $   0.80  $    0.73    $    1.78    $    1.65
  
  Extraordinary item                -          -        (2.14)       (2.14)
  
  Net income (loss) per
  share - basic              $   0.80  $   (1.41)   $    1.78    $   (0.49)
                                                                     
  Average number of common
  shares outstanding           59,674     63,380       60,330       63,474
                                                                     
  Net income per share                
  before extraordinary
  item - diluted             $   0.72   $   0.67    $    1.67    $    1.56
  
  Extraordinary item-diluted        -      (1.80)           -        (1.87)
  Net income (loss) per 
  share - diluted            $   0.72   $  (1.13)   $    1.67    $   (0.31)
                                                                     
  Diluted shares               73,540     75,555       74,274       72,758
                                                                     
                                        #  #  #
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 23473}]
metadata_filer: {"company-data": {"conformed-name": "CALENERGY CO INC", "cik": "0000720556", "assigned-sic": "4991", "irs-number": "942213782", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-09874", "film-number": "98741720"}, "business-address": {"street1": "302 S 36TH ST", "street2": "STE 400", "city": "OMAHA", "state": "NE", "zip": "68131", "phone": "4023414500"}, "mail-address": {"street1": "302 SOUTH 36TH STREET", "street2": "SUITE 400-A", "city": "OMAHA", "state": "NE", "zip": "68131"}, "former-company": {"former-conformed-name": "CALIFORNIA ENERGY CO INC", "date-changed": "19920703"}}
text: Securities and Exchange Commission
                                   
                         Washington, DC  20549
                                   
                               Form 8-K
                                   
                            Current Report
                                   
                Pursuant to Section 13 or 15(d) of the
                     Securities Exchange Act 1934
                                   
                                   
                    Date of Report October 22, 1998
                   (Date of earliest event reported)
                                   
                                   
                                   
                        CalEnergy Company, Inc.
        (Exact name of registrant as specified in its charter)
                                   
  
      Delaware                     1-9874               94-2213782
  (State of other              (Commission File       (IRS Employer
   jurisdiction of                 Number)          Identification No.)
   incorporation)
  
   302 South 36th Street, Suite 400,     Omaha, NE     68131
         (Address of principal executive offices)     Zip Code
  
  Registrant's Telephone Number, including area code:    (402) 341-4500
  
                                N/A
   (Former name or former address, if changed since last report)
  Item 5.  Other Events
  
        On  October 22, 1998, the Registrant reported results for the
  three  and  nine months ended September 30, 1998.  A  copy  of  the
  press  release  issued  by the Registrant  is  attached  hereto  as
  Exhibit 1 and is incorporated herein by reference.
  
        Certain information included in this report contains forward-
  looking   statements  made  pursuant  to  the  Private   Securities
  Litigation Reform Act of 1995 ("Reform Act").  Such statements  are
  based  on  current expectations and involve a number of  known  and
  unknown risks and uncertainties that could cause the actual results
  and  performance  of the Registrant to differ materially  from  any
  expected  future results or performance, expressed or  implied,  by
  the forward-looking statements including expectations regarding the
  future  results of operations of Registrant and MidAmerican  Energy
  Holdings  Company and the combined company, the intended  financing
  of  the  merger and receipt of regulatory approvals.  In connection
  with  the  safe harbor provisions of the Reform Act, the Registrant
  has identified important factors that could cause actual results to
  differ  materially  from such expectations,  including  development
  uncertainty,   operating   uncertainty,  acquisition   uncertainty,
  uncertainties  relating to doing business  outside  of  the  United
  States,    uncertainties   relating   to   geothermal    resources,
  uncertainties  relating  to  domestic  and  international  (and  in
  particular,  Indonesian)  economic  and  political  conditions  and
  uncertainties  regarding  the impact  of  regulations,  changes  in
  government   policy,   industry   deregulation   and   competition.
  Reference is made to all of the Registrant's SEC Filings, including
  the  Proxy Statement and the Registrant's Report on Form 8-K  dated
  March  6, 1998, incorporated herein by reference, for a description
  of  such factors.  The Company assumes no responsibility to  update
  forward-looking information contained herein.
  
  Item 7.  Financial Statements and Exhibits
  
  Exhibit 1 - Press Release dated October 22, 1998
  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.
  
                                     CalEnergy Company, Inc.
  
                                  By: \s\ Douglas L. Anderson
                                          Douglas L. Anderson
                                          Assistant Secretary and
                                          Assistant General Counsel
  
  Dated: November 10, 1998
  EXHIBIT 1
  
  FOR IMMEDIATE RELEASE
  
  Craig M. Hammett - Senior Vice President, Chief Financial Officer 402-341-4500
  Craig S. Allen - Manager, Investor Relations                      402-341-4500
  Diana Nelson - Brunswick, Media Relations                         212-333-3810
  
              CalEnergy Reports 14% Increase in Revenues
                and 10% Increase in Earnings Per Share
  
       OMAHA,  NEBRASKA, October 22, 1998 -- CalEnergy Company,  Inc.
  ("CalEnergy"  or  the "Company") (NYSE:  CE;  PCX  and  LSE)  today
  reported results for the three and nine months ended September  30,
  1998.  Highlights are as follows:
  
       Three Months Ended September 30, 1998 (compared to same period
  in 1997)
  
       Revenues increased 14% to $627.7 million from $551.9 million
       in 1997
       Net income increased 3% to $47.6 million from $46.4 million in 
       1997 (1)
       Net income per basic share increased 10% to $0.80 from $0.73
       in 1997 (1)
       Diluted earnings per share increased 8% to $0.72 from $0.67 in
       1997 (1)
       Earnings before interest, taxes, depreciation and amortization
       increased 16% to $253.0 million from $218.2 million in 1997
       
       Nine  Months Ended September 30, 1998 (compared to same period
  in 1997)
       
       Revenues increased 15% to $1.89 billion from $1.64 billion in
       1997
       Net income increased 3% to $107.4 million from $104.7 million
       in 1997 (1)
       Net income per basic share increased 8% to $1.78 from $1.65 in
       1997 (1)
       Diluted earnings per share increased 7% to $1.67 from $1.56 in
       1997 (1)
       Earnings before interest, taxes, depreciation and amortization
       increased 16% to $698.8 million from $604.3 million in 1997
       
       (1) Before extraordinary item in 1997.
       
  The  third quarter of 1998 contained many notable events which  are
  described in greater detail below:
  
  MidAmerican Merger Agreement
  
        On  August  12, 1998, CalEnergy announced the approval  of  a
  definitive  merger  agreement  with  MidAmerican  Energy   Holdings
  Company  ("MidAmerican").  The Company will pay $27.15 in cash  for
  each  MidAmerican common share outstanding, valuing MidAmerican  at
  approximately  $4.2  billion, including $1.6 billion  of  debt  and
  preferred stock which will remain outstanding at MidAmerican  after
  the  acquisition.  MidAmerican, a leading regional provider of low-
  cost  energy and related services, provides electricity to  648,000
  customers  and natural gas to 619,000 customers in Iowa,  Illinois,
  Nebraska  and South Dakota.  In the year ended December  31,  1997,
  MidAmerican generated revenues of over $1.9 billion and had  assets
  of approximately $4.3 billion.
  
                                -more-
  CalEnergy Company, Inc
  October 22, 1998
  Page -2-
  
  MidAmerican Merger Agreement (Cont.)
  
       All of the necessary regulatory applications and notifications
  have been filed with the Federal Energy Regulatory Commission,  the
  Nuclear  Regulatory  Commission, the  Department  of  Justice,  the
  Federal  Trade Commission and the Iowa Utilities Board.  On October
  13,  1998, the Company announced that the waiting period under  the
  Hart-Scott-Rodino Antitrust Improvements Act of  1976  expired  and
  that federal antitrust clearance had therefore been obtained.   The
  Company has scheduled a special shareholders meeting on October 30,
  1998  to  obtain  approval to reincorporate CalEnergy  as  an  Iowa
  corporation and approve the proposed merger.
  
       Completion  of the merger is expected to occur by the  end  of
  the  first  quarter 1999.  The combined enterprise is  expected  to
  have  total  assets  of  approximately $13  billion,  total  annual
  revenues  of  more than $5 billion and will serve over 3.3  million
  retail  customers.  The transaction is expected to be accretive  to
  earnings in the first full year of combined operations.
  
  Successful Completion of a $1.4 Billion Senior Note and Bond
  Offering
  
        On  September  22, 1998, CalEnergy closed the  sale  of  $1.4
  billion  aggregate principal amount of its Senior Notes  and  Bonds
  with  a  weighted  average maturity of 15.5 years  and  a  weighted
  average  interest rate of 7.7%.  The Senior Notes  and  Bonds  were
  rated  BB+,  Ba1 and BB+ by Standard & Poor's, Moody's and  Duff  &
  Phelps,  respectively, and CalEnergy's long term  senior  debt  was
  placed  on  credit watch with positive implications for a  possible
  upgrade  by  all  three  rating  agencies  following  the  proposed
  MidAmerican merger.
  
        Approximately $830 million in net proceeds of the Senior Note
  and Bond Offering (the "Offering") is expected to be utilized as  a
  component  of  the  funding  necessary  to  complete  the   pending
  MidAmerican merger.  In addition, approximately $543 million of the
  net  proceeds  of the Offering is expected to be used to  refinance
  the Company's outstanding 10 1/4% Senior Discount Notes, which become
  callable  on January 15, 1999.  In October, the Company repurchased
  approximately $156 million of the 10 1/4% Senior Discount Notes.
  
  Operations
       
       United States
  
        The Company's Coso and Imperial Valley geothermal projects in
  the U.S. continued to operate at high efficiencies and received the
  maximum   capacity  payments  allowed  by  their   Power   Purchase
  Agreements  during the third quarter of 1998.  These  11  projects,
  representing  532  net megawatts, operated with a  high  degree  of
  availability and without any major interruptions during the quarter
  --- the period of heaviest demand for electricity in the region and
  which yields the highest revenue for delivered power.
  
       United Kingdom
  
        Northern  Electric,  the Company's subsidiary  in  the  U.K.,
  continues to expand its gas customers and has increased gas  supply
  revenues  by  $86.1 million to $99.6 million for  the  nine  months
  ended  September 30, 1998, compared to $13.5 million for  the  nine
  months ended September 30, 1997.  Also, included in the nine  month
  results  are  initial customer acquisition costs of  $31.1  million
  related  to  commissions  and opening meter  reads.   Northern  has
  acquired over 600,000 new gas customers since the inception of  its
  `Dual Fuel' marketing campaign in 1997.  Over 400,000 of these  gas
  customers  are  on supply with the remaining 200,000 gas  customers
  currently progressing through the registration process.
  
                                -more-
  CalEnergy Company, Inc
  October 22, 1998
  Page -3-
  
  Operations - United Kingdom (Cont.)
  
       Northern Electric has also continued to grow the above 100
  kilowatt market.  The last three major contract rounds produced the
  following results:
  
                 Volume to                    Sales
                 Renew (GWh)              Achieved (GWh)
  Increase
  
  October, 1997       1,808                    2,366                31%
  
  April, 1998         1,631                    2,386                46%
  
  October, 1998       2,000                    4,330               116%
  
       Total gas (GWh equivalent) and electricity supplied has
  increased by 47% to 16,505 GWh for the nine months ended September
  30, 1998 from 11,248 GWh for the same period in 1997.
  
       In addition, Northern's service territory is scheduled to open
  to retail electricity competition for the less than 100 kilowatt
  market on November 4, 1998.  The Company believes that Northern is
  fully prepared to engage in cost-effective marketing of their
  widely-respected brand name.
  
       Philippines
  
        CalEnergy's projects in the Philippines, representing 500 net
  megawatts, continue to deliver electricity to the Republic  of  the
  Philippines and have received all monthly payments as scheduled.
  
  Salton Sea Expansion
  
       Zinc Recovery Project
  
        Construction of the Zinc Recovery Project has commenced.  The
  project  will  extract  minerals, initially zinc,  from  geothermal
  brine.   The zinc extraction process will use ion exchange, solvent
  extraction and electrowinning to extract and plate zinc from  spent
  geothermal  fluid after it is used to generate electricity  at  the
  existing Imperial Valley geothermal projects.
  
       Debt Offering
  
       On  October 13, 1998, CalEnergy announced that the Salton  Sea
  Funding  Corporation had closed the sale of $285 million  principal
  amount of its 7.475% Senior Secured Series F Bonds due November 30,
  2018.
       
       Proceeds  from the issuance of Funding Corporation Bonds  will
  be  used to fund construction of two new geothermal projects at the
  Salton  Sea totaling 59 net megawatts, to partially fund the  costs
  of  construction of the related Zinc Recovery Project,  to  fund  a
  portion  of the costs associated with the upgrade of certain  brine
  processing facilities and for other capital improvements to the 
  steamfield and related  facilities at the existing Salton Sea Projects.   
  Moody's Investor's Service raised the Funding Corporation Bonds' investment
  grade  rating  from Baa3 to Baa2, and Standard & Poor's  reaffirmed
  the ratings at BBB-.
  
                                -more-
  
  CalEnergy Company, Inc.
  October 22, 1998
  Page -4-
       
  $60 Million of New Renewable Resource Funding Awarded
  
       On  July  13,  1998, the Company announced that three  of  its
  subsidiaries  had  been selected as winning bidders  for  financial
  incentives by the California Energy Commission from funds set aside
  under   AB   1890,  California's  landmark  electric   deregulation
  legislation, which was passed in 1996.  Each of the three CalEnergy
  subsidiaries  is proposing to develop, own and operate  a  separate
  geothermal  power  project in California, for a total  of  107  net
  megawatts  of new capacity.  The total financial incentive  payment
  available  to CalEnergy is approximately $60 million  and  will  be
  received by the Company over a five year
  period following the completion of the new geothermal projects.
       
       CE  Casecnan's Senior Secured Debt Rating Upgraded by Standard
  & Poor's
  
       On  July 14, 1998, CalEnergy announced that Standard &  Poor's
  upgraded its subsidiary CE Casecnan Water and Energy Company,  Inc.
  ("CE  Casecnan") senior secured debt rating to "BB+  with  negative
  outlook"  from  "BB with negative Credit Watch".   CE  Casecnan  is
  constructing a combined hydroelectric and irrigation project in the
  Philippines.   The  project  is  on  schedule  and  on  budget  for
  completion  by mid 2000.  The negative outlook is solely  based  on
  the foreign currency rating of the Republic of the Philippines, the
  guarantor of the project's contractual payments.
       
  Indonesia
  
        On  August 14, 1998, the Dieng and Patuha projects filed  for
  arbitration  under the United Nations Commission  on  International
  Trade  Law rules against PLN, the Government of Indonesia's wholly-
  owned electric utility, and the Government of Indonesia for failure
  to  pay  for electricity under the Company's "take or pay" contract
  and   failure  to  honor  its  sovereign  guarantees.   Arbitration
  proceedings represent a contractually required step in the  process
  of collecting monies due from PLN and the Government of Indonesia.
  
  Stock Repurchase Program
  
       Since November 1997, the Company has repurchased approximately
  3.7 million common shares in open market transactions.  On February
  23,  1998, CalEnergy announced that it had increased the authorized
  purchase  amounts in its stock repurchase program to three  million
  shares  of  its common stock.  During the third quarter  1998,  the
  Company repurchased 497,000 common shares and has approximately 2.3
  million  shares remaining of the three million shares approved  for
  repurchase.
  
  Commenting on the results and the events during the third quarter
  1998, David L. Sokol, Chairman and Chief Executive Officer, stated:
  
       "This  has  been a record quarter for operations at  CalEnergy
  and we are very excited about the opportunities that lie ahead.  We
  are  particularly pleased with the strong performance and  progress
  made at Northern Electric, our U.K. electric and gas utility.   Our
  projects in the Philippines also continue to perform well  and  are
  showing strong operating results."
       
       "We   believe   our  nine  month  financial   results,   which
  demonstrate  continued growth in EBITDA and EPS,  are  particularly
  noteworthy  in  light of the fact that during the  period  earnings
  were  negatively  impacted by severe winter weather  conditions  in
  upstate   New   York,   the   continuing  Indonesian   uncertainty,
  significant customer acquisition costs incurred at Northern and the
  pricing  of  two of the Company's ISO4 contracts have decreased  to
  avoided cost."
       
                                -more-
  CalEnergy Company, Inc.
  October 22, 1998
  Page -5-
       
       
       "The  situation  in  Indonesia is contained.   In  the  fourth
  quarter  of last year, we announced a full write off of our  equity
  exposure.   We have subsequently commenced arbitration  proceedings
  and  also carry political risk insurance coverage on our Indonesian
  assets."
  
       "The MidAmerican Energy transaction is proceeding smoothly and
  we  look forward to a speedy completion and the combination of  the
  skills of two strong management teams.  We believe MidAmerican will
  provide an excellent platform for growth as the U.S. energy markets
  restructure.  Our  enlarged  company will  be  a  powerful  entity,
  positioned for growth in the energy markets worldwide."
  
        This  press release contains forward-looking statements  made
  pursuant  to the Private Securities Litigation Reform Act  of  1995
  ("Reform  Act").  Such statements are based on current expectations
  and  involve  a number of known and unknown risks and uncertainties
  that  could cause the actual results and performance of the Company
  to   differ   materially  from  any  expected  future  results   or
  performance,   expressed   or  implied,  by   the   forward-looking
  statements.  In connection with the safe harbor provisions  of  the
  Reform Act, the Company has identified important factors that could
  cause  actual  results to differ materially from such expectations,
  including    development   uncertainty,   operating    uncertainty,
  uncertainties  relating to doing business  outside  of  the  United
  States,    uncertainties   relating   to   geothermal    resources,
  uncertainties  relating  to  domestic  and  international  (and  in
  particular,  Indonesian)  economic  and  political  conditions  and
  uncertainties  regarding  the impact  of  regulations,  changes  in
  government   policy,   industry   deregulation   and   competition.
  Reference  is  made to all of the Company's SEC filings,  including
  the  Company's Report on Form 8-K dated March 6, 1998, incorporated
  herein  by  reference,  for a description  of  such  factors.   The
  Company   assumes   no  responsibility  to  update  forward-looking
  information contained herein.
  
       CalEnergy  is  a global energy company that manages  and  owns
  interests   in  over  5,000  net  megawatts  of  power   generation
  facilities  in  operation, construction and development  worldwide.
  The  Company  develops  and produces energy from  diversified  fuel
  sources   including  geothermal,  natural  gas  and  hydroelectric.
  Through  its  subsidiary Northern Electric, CalEnergy supplies  and
  distributes  electricity and gas to 2.0 million  customers  in  the
  United Kingdom.  CalEnergy conducts business in the U.S., U.K., the
  Philippines, Indonesia, Poland and Australia, and employs more than
  4,200  people  worldwide.  For the year ended  December  31,  1997,
  CalEnergy generated revenues of over $2.2 billion and had assets of
  approximately $7.5 billion.
       
                           www.calenergy.com
                                   
                                -more-
                                   
                                   
  CalEnergy Company, Inc.
  October 22, 1998
  Page -6-
                                                                     
                          CALENERGY COMPANY, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, expect per share amounts)
                               (unaudited)
                                                                     
                                                         
                                 Three Months              Nine Months
                                     Ended                    Ended
                                  September 30             September 30
                                 1998      1997          1998        1997
                                                                     
  Revenues:                                                             
  Operating revenue         $ 600,862  $ 527,896   $1,813,302   $1,576,407
  Interest and other income    26,885     23,997       79,274       66,456
  Total revenues              627,747    551,893    1,892,576    1,642,863
                                                                     
  Costs and Expenses:
  Cost of sales               265,605    239,081      848,018      746,626
  Operating expense            99,052     82,513      312,830      254,389
  General and administration   10,085     12,068       32,943       37,560
  Depreciation and 
  amortization                 81,449     69,877      247,033      207,789
  Net interest expense         81,286     64,361      241,015      187,824
  Total costs and expenses    537,477    467,900    1,681,839    1,434,188
                                                                     
  Income before income taxes   90,270     83,993      210,737      208,675
  Provision for income taxes   32,112     27,929       72,595       74,520
                                                                     
  Income before minority
  interest                     58,158     56,064      138,142      134,155
  Minority interest            10,535      9,656       30,758       29,410
                                                                     
  Net income before
  extraordinary item           47,623     46,408      107,384      104,745
                                                                     
  Extraordinary item, net of 
  minority interest 
  of $58,222                        -   (135,850)           -     (135,850)
  
  Net income (loss)available 
  for common shareholders    $ 47,623  $ (89,442)   $ 107,384    $ (31,105)
  
  Net income per share before
  extraordinary item - basic $   0.80  $    0.73    $    1.78    $    1.65
  
  Extraordinary item                -          -        (2.14)       (2.14)
  
  Net income (loss) per
  share - basic              $   0.80  $   (1.41)   $    1.78    $   (0.49)
                                                                     
  Average number of common
  shares outstanding           59,674     63,380       60,330       63,474
                                                                     
  Net income per share                
  before extraordinary
  item - diluted             $   0.72   $   0.67    $    1.67    $    1.56
  
  Extraordinary item-diluted        -      (1.80)           -        (1.87)
  Net income (loss) per 
  share - diluted            $   0.72   $  (1.13)   $    1.67    $   (0.31)
                                                                     
  Diluted shares               73,540     75,555       74,274       72,758
                                                                     
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