Friday, December 29, 2006

Working gas in storage was 3,121 Bcf as of Friday, December 22, 2006, according to EIA estimates. This represents a net decline of 46 Bcf from the previous week. Stocks were 458 Bcf higher than last year at this time and 355 Bcf above the 5-year average of 2,766 Bcf. In the East Region, stocks were 165 Bcf above the 5-year average following net withdrawals of 28 Bcf. Stocks in the Producing Region were 154 Bcf above the 5-year average of 793 Bcf after a net injection of 6 Bcf. Stocks in the West Region were 36 Bcf above the 5-year average after a net drawdown of 24 Bcf. At 3,121 Bcf, total working gas is above the 5-year historical range.

Tuesday, December 26, 2006

Anadarko Petroleum Corp., the U.S. oil and natural-gas producer that bought Kerr-McGee Corp. earlier this year, sold fields in Louisiana to Exco Resources Inc. for $1.6 billion to help cut debt.

Exco, which went public in February with billionaire hedge fund manager T. Boone Pickens as its largest shareholder, will almost double its oil and gas reserves. Anadarko is selling assets to pay off debt after buying Kerr-McGee and Western Gas Resources Inc. in August for a combined $22.5 billion.

Anadarko, based in The Woodlands, Texas, is selling the fields to focus on projects that are more attractive, Chief Executive Officer Jim Hackett said in a statement today. The fields are tapped by about 350 wells, and 96 percent of the proved reserves on the properties are in production, Exco said.

``Hackett wants Anadarko to be the fastest-growing production company and is trying to improve his hand,'' said Fadel Gheit, an analyst at Oppenheimer & Co. in New York who rates Anadarko shares ``neutral'' and owns none. ``He's not willing to keep any asset that doesn't have enough growth potential.''

Shares of Anadarko rose 56 cents, or 1.3 percent, to $42.70 in New York Stock Exchange composite trading. The stock has fallen 9.9 percent this year. Shares of Dallas-based Exco jumped $1.06, or 6.3 percent, to $17.90 and have gained 37 percent since the initial offering on Feb 8.

Thursday, December 21, 2006

Working gas in storage was 3,167 Bcf as of Friday, December 15, 2006, according to EIA estimates. This represents a net decline of 71 Bcf from the previous week. Stocks were 342 Bcf higher than last year at this time and 274 Bcf above the 5-year average of 2,893 Bcf. In the East Region, stocks were 110 Bcf above the 5-year average following net withdrawals of 52 Bcf. Stocks in the Producing Region were 117 Bcf above the 5-year average of 824 Bcf after a net withdrawal of 14 Bcf. Stocks in the West Region were 47 Bcf above the 5-year average after a net drawdown of 5 Bcf. At 3,167 Bcf, total working gas is within the 5-year historical range.

Monday, December 18, 2006

Nigeria's total Liquefied Natural Gas (LNG) output will hit a record 52 million metric tones per annum (52MPTA) by 2009, Edmund Daukoru, Minister of state for Petroleum Resources has said.

The Minister who disclosed this recently explained that the Nigerian Liquefied Natural Gas (LNG)experiment spearheaded by the Nigerian National Petroleum Corporation {NNPC} has been successfully pushing the LNG to Europe, while its first cargo to the United States of America was recorded in January this year.

According to him, "shipment to the United States is expected to increase with the addition of a sixth train which will increase the annual output to 22mtpa is in response to the ever increasing global energy demand that the two additional LNG projects namely Brass LNG and Olokola LNG were launched. These two LNG projects will be fully operational from 2009".

The minister said the 22mtpa capacity of the NLNG will combine with the 30 mtpa output of the Brass LNG to push national output to 52 mtpa by 2009.

He also spoke on the gas monetization projects of the Federal Government saying that the development has brought about other projects utilizing gas to produce energy based derivatives such as the 34,000 barrels per day Escravos Gas to Liquids (EGTL) and the Natural Gas Liquids (NGL) projects 1 and 2 operated by Chevron Nigeria Limited and Mobil Producing Nigeria Unlimited respectively.

He further charged the Nigerian National Petroleum Corporation (NNPC) and the operators in the sector to channel more investments and needed technology in the current quest to develop the nation's vast gas resources.

He explained that the development will boost the optimization of the nation's share and global competitiveness in the high gas export market. According to him,the era of seaching for oil alone has been displaced by oil and gas exploration for maximum economic benefits for the nation.

Friday, December 15, 2006

EnCana Corp., Canada's largest natural-gas producer, plans to spend $5.8 billion on oil and gas projects in 2007, a 6.5 percent drop from this year as it focuses on less-costly wells.

Combined production of oil and gas in 2007 will be little changed at an estimated 4.28 billion cubic feet of gas equivalent, compared with 4.3 billion this year, EnCana said in a statement today. The Calgary-based company will double its quarterly dividend to 20 cents a share and extend its stock- buyback program.

EnCana Chief Executive Officer Randy Eresman is slowing gas exploration in Texas and other areas as a boom in drilling increases demand for labor and boosts costs. Other energy companies including ConocoPhillips, Devon Energy Corp. and Nexen Inc. also announced reduced capital budgets for next year.

Drilling costs are expected to rise 5 percent to 10 percent in 2007, Eresman, 48, told analysts and investors on a conference call today.

The company said it expects to drill 4,260 wells in 2007, a 17 percent increase from this year. A larger percentage of the wells will be shallow ones that are less costly to drill, company spokesman Al Boras said in a telephone interview.

Shares of EnCana fell 30 cents to C$60.69 on the Toronto Stock Exchange. The stock has risen 15 percent this year.

Production

Production of gas, which accounts for about 80 percent of EnCana's output, is expected to rise 2.7 percent to 3.46 billion cubic feet, the company said.

About $700 million will be used to increase output from Alberta's oil-sands deposits, EnCana said. Oil-sands production will drop 28 percent to an estimated 31,000 barrels a day as the company begins to share output with ConocoPhillips of Houston, its partner in a joint venture that begins operating in January.

The partners agreed in October to spend $10.7 billion over 10 years to boost output from Alberta's oil-soaked sand and refine the heavy crude into fuels such as gasoline and diesel.

EnCana said it plans to complete its planned buyback of 10 percent its outstanding shares by year-end, having repurchased 9.4 percent so far. An additional 3 percent to 5 percent of outstanding shares will be bought back next year, the company said.

Thursday, December 14, 2006

Working gas in storage was 3,238 Bcf as of Friday, December 8, 2006, according to EIA estimates. This represents a net decline of 168 Bcf from the previous week. Stocks were 245 Bcf higher than last year at this time and 225 Bcf above the 5-year average of 3,013 Bcf. In the East Region, stocks were 84 Bcf above the 5-year average following net withdrawals of 93 Bcf. Stocks in the Producing Region were 101 Bcf above the 5-year average of 854 Bcf after a net withdrawal of 55 Bcf. Stocks in the West Region were 40 Bcf above the 5-year average after a net drawdown of 20 Bcf. At 3,238 Bcf, total working gas is above the 5-year historical range.

Wednesday, December 13, 2006

Balmy November weather on the East Coast kept the pressure off natural gas prices last month, but a forecast for colder winter temperatures may nudge prices higher in 2007, according to a government report.

The number of days in which temperatures dropped to heating-degree level were nearly 30 percent below normal in the Northeast and Mid-Atlantic in November, according to the Energy Information Administration's monthly short-term energy outlook.

Natural gas prices averaged $7.63 per thousand cubic feet during the month, well below the price spikes seen last year in the wake of a destructive hurricane season. But prices then fizzled as winter 2006 temperatures were warmer than usual.

In 2007, the National Oceanic and Atmospheric Administration expects a colder winter compared with last year _ but temperatures will likely trend above normal. Natural gas prices are expected to hover below $9 per thousand cubic feet as a result, the EIA said.

Natural gas settled at $7.43 per thousand cubic feet Tuesday on the New York Mercantile Exchange.

Tuesday, December 12, 2006

A proposed natural gas terminal in Long Beach Harbor is in jeopardy as officials in that city express growing doubts about safety and other issues surrounding the $700-million project.

The facility, one of several liquefied natural gas processing plants proposed for the West Coast, would be built in the harbor — the only such project to be situated so close to a major urban center.

The location so complicates an ongoing review that harbor officials suggest halting the environmental impact report before it is complete, effectively putting an end to the proposal.

Harbor Commission President James C. Hankla, in a Dec. 4 letter to the Long Beach mayor and City Council, questioned whether city officials still want the gas terminal. He said his staff has been working to move the project forward while the city has failed to negotiate a deal with the energy company for lower-cost natural gas for Long Beach residents.

Monday, December 11, 2006

Oil and gas producer Devon Energy Corp. on Monday said Chief Financial Officer Brian J. Jennings will step down.

Jennings, 46, spent seven years with the company and is leaving "to pursue other interests," Devon said.

Danny Heatly, vice president of accounting, will continue to fulfill the responsibilities of principal accounting officer.

In November, Devon posted a 5 percent drop in third-quarter earnings due to lower natural gas prices and increased operating costs.

Friday, December 08, 2006

Natural gas futures fell fractionally to $7.668 per 1,000 cubic feet on the Nymex, unleaded gasoline rose 1.1 cent to $1.6385 and heating oil prices were up 1.82 cents to $1.7970 a gallon.

Thursday, December 07, 2006

Natural-gas futures closed at their lowest level in 10 weeks Thursday after a government report showed that supplies of the fuel fell generally within market expectations, but overall inventories remained more than 7% above that of a year ago.

January natural-gas futures closed down 5.6 cents to $7.671 per million British thermal units on the New York Mercantile Exchange after a low of $7.58. The contract has traded or closed at levels this low since Sept. 28.
O
n Wednesday, the price fell to a low of $7.60, but recovered to post a gain and halt a four-session losing streak.

Natural-gas inventories fell 11 billion cubic feet for the week ended Dec. 1, the Energy Department reported Thursday.

Global Insight was looking for a bigger decline of 25 billion. But Analysts at Strategic Energy & Economic Research expected the report to show a decline of 8 billion cubic feet.

The data compares with a fall of 58 billion last year and a five-year average decline of 63 billion, according to SEER.

"This is a very light draw from storage for this time of year, and is a direct reflection of how light weather-driven demand has been this fall and early winter," said Ben Smith, a managing partner at First Enercast Financial.

"At least the reduction in natural-gas price this week shows the market is finally responding to all this warm weather we've experienced over the past month," he said, noting that "even this last winter storm that swept the Midwest was quick and is again being replaced with warmer than average temperatures."

Total stocks now stand at 3.406 trillion cubic feet, up 232 billion cubic feet from the year-ago level, and 282 billion cubic feet above the five-year average, the government data said.

"The only support for gas is the anticipation for next weeks' numbers, which should be more normal because of the cold front that moved through the U.S," said James Williams, an economist at WTRG Economics.

But "weather forecasts for the next few weeks are for warmer-than-normal temperatures, which should feed a generally bearish sentiment," he said.
Working gas in storage was 3,406 Bcf as of Friday, December 1, 2006, according to EIA estimates. This represents a net decline of 11 Bcf from the previous week. Stocks were 232 Bcf higher than last year at this time and 282 Bcf above the 5-year average of 3,124 Bcf. In the East Region, stocks were 109 Bcf above the 5-year average following net injections of 10 Bcf. Stocks in the Producing Region were 129 Bcf above the 5-year average of 881 Bcf after no net change in stock levels. Stocks in the West Region were 45 Bcf above the 5-year average after a net drawdown of 21 Bcf. At 3,406 Bcf, total working gas is above the 5-year historical range.
January natural-gas futures edged up 2.9 cents to $7.756 per million British thermal units ahead of weekly gas-supply data.

The price hit its lowest level since late September in intraday trading, but recovered to post a gain and halt a four-session losing streak.

Analysts at Strategic Energy & Economic Research expect the Energy Department to report a decline of 8 billion cubic feet of gas supplies for the week ended Dec. 1.

Wednesday, December 06, 2006

Bolivia's natural gas exports to Brazil and Argentina are back to normal following planned repairs to a pipeline that was damaged by flooding in April, state oil company YPFB said on Tuesday.

Due to the repair work on the pipeline in the southern Bolivian province of Tarija, natural gas shipments to Brazil and Argentina had been reduced since early November.

"From today onward the exports of (natural) gas to Brazil and Argentina are back to normal," a YPFB statement said.

The flood damaged pipelines operated by Brazilian state oil company Petrobras and a Bolivian pipeline that supplies natural gas for the local market.

Brazil has a contract to buy up to 30 million cubic meters per day of natural gas from Bolivia, while Argentina buys a maximum of 7.7 million cubic meters per day.

Bolivia has the second biggest natural gas reserves in South America after Venezuela and the leftist government of President Evo Morales has taken greater control of the energy industry in a nationalization process.

Tuesday, December 05, 2006

January crude closed nearly unchanged at $62.43 a barrel, down a penny for the session as traders gauged the likelihood that key oil producers will agree to cut output when they meet next week.

January natural gas fell 12.1 cents to $7.685 per million British thermal units, marking its lowest closing level since late September. The contract has tallied a loss of 13.3% in four sessions.
Oil prices edged higher Tuesday as traders weighed forecasts calling for mild U.S. weather next week against anticipated further production cuts by OPEC.

Light sweet crude for January delivery rose 21 cents to $62.65 a barrel on the New York Mercantile Exchange. January Brent crude at London's ICE Futures exchange was up 40 cents at $63.85 a barrel.

Also on Tuesday, the U.S. Energy Department released its annual long-term world energy forecast. The agency predicted that the price of oil, when adjusted for inflation, would decline between 2007 and 2015 as investments made in recent years of historically high prices bring new supplies to the market.

After that, the Energy Department said it expects prices to resume an upward trend, bringing average real prices (in 2005 dollars) by 2030 to more than $59 a barrel. In nominal terms, that would be equivalent to about $95 a barrel. The agency said it expects OPEC to adjust its output over the next 25 years to try to keep average prices between $50 and $60 _ a range it is already trying to achieve.

In the very short-term, energy analyst Victor Shum said he expects the oil market to strengthen further as demand increases during the Northern Hemisphere winter. He predicted that $60 a barrel was the new price floor.

"In the short-term future, what's still going to move the market is the weather," said Shum, of Purvin & Gertz in Singapore.

At the moment, however, the U.S. autumn has been marked by relatively mild weather. Nymex natural gas fugures fell 7 cents to $7.73 per 1,000 cubic feet, while heating oil futures were steady at $1.809 a gallon. Unleaded gasoline futures were flat at $1.6674 per gallon.

Monday, December 04, 2006

The UAE is planning to increase its production of natural gas by 33 per cent by the end of 2008, Energy Minister Mohammed bin Dhaen al Hamili said here today.

Attributing the planned increase to the fast development taking place in the country, growing population and industrialisation, all of which requires substantial quantities of power, he said the UAE's proven reserve base of natural gas is estimated at over six trillion cubic metres, thus placing it fourth in the region and fifth in the world.

Oil and natural gas reserves were sufficient "because production is entirely compensated for by additions of new proven reserves. There is certainly no danger of constraints in natural gas reserves in the near to medium terms," he said.

He said proven natural gas reserves today were estimated at 180 trillion cubic metres, which would suffice world demand for another 65 years at the current production levels.

Al Hamili said the rate of estimated growth of natural gas demand varies from 1.8 to 3.1 per year until 2020, adding that the growth in world demand of LNG is expected to reach 12 per cent per year by 2015.

Friday, December 01, 2006

Natural gas at Canada's biggest trading point may fall, ending a 10 percent rally in the past four sessions, on forecasts for a return to mild weather in the northern U.S. next week.

Heating demand in the U.S. Midwest will return to normal Dec. 6 after peaking at 25 percent above normal Dec. 4, Belton, Missouri-based Weather Derivatives said. Temperatures in the region will be as much as 8 degrees Fahrenheit above normal Dec. 10 to Dec. 14, MDA Federal's EarthSat Energy said.

Spot gas at EnCana Corp.'s AECO C hub in Alberta, the nation's largest trading point, gained 27 cents to C$8.22 per gigajoule ($7.60 per million British thermal units) yesterday, according to data compiled by Bloomberg. It was the first time gas at Canada's benchmark hub closed above $8 per gigajoule since Feb. 1.

On Calgary-based Natural Gas Exchange Inc.'s NGX electronic energy market, spot gas at AECO gained 7 cents to C$8.22 per gigajoule.