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EIA: 1Q Income of 25 Major Producers Soars 44%

A comprehensive look at the first quarter financial results of 25 major natural gas and oil producers by the Energy Information Administration (EIA) reveals a surprising 44% increase in net income to a grand total of $20.4 billion, with sharply higher results in every major sector of operations despite declines in domestic and foreign gas and oil production.

EIA tallied a 202% jump in income from chemicals operations, a 70% rise in income from downstream gas and power operations, a 40% hike in income from refining and marketing, a 30% jump in results from petroleum operations and a 27% increase in income from oil and gas production.

Meanwhile, domestic natural gas production was down 2.5% to 20,854 MMcf/d and domestic oil production was down 2.9% to 3,613 thousand b/d. Foreign natural gas production slipped 3% to 18,411 MMcf/d, while foreign oil production fell 1.4% to 4,850 thousand b/d. Refinery throughput, however, rose 4.5% domestically and 0.8% overseas.

The strikingly positive financial results were mainly from higher oil and gas prices, higher demand in the United States and other countries, higher refinery throughput and higher refining margins, EIA found.

The average U.S. natural gas wellhead price increased 9% from $5.22/Mcf in 1Q2004 to $5.70/Mcf in 1Q2005. A 3% decline in U.S. gas demand was offset by a 2% drop in domestic gas production, largely due to the lingering damage in the Gulf of Mexico from Hurricane Ivan, EIA said.

Crude oil prices were up by more than one-third compared to year-earlier levels. The U.S. refiner average acquisition cost of imported crude oil increased 34% to $41.66/bbl. Oil prices rose mainly because of the lingering effects of Hurricane Ivan, 4% U.S. economic growth and a 3% increase in worldwide oil demand. These factors were partially offset by a 2% increase in worldwide oil supply, a 4% increase in overseas oil stock levels and higher oil stocks in the United States.

For more from the report go to EIA' website at http://www.eia.doe.gov/ .

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