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Constellation, Louis Dreyfus Show Greatest Gains in Marketing Volumes

While natural gas marketers overall registered an approximate 12% gain in volumes sold in NGI's 1Q2008 marketer survey over year-ago totals, Constellation Energy Group, now fourth in the marketer listings, and Louis Dreyfus Energy Services LP, now in sixth place, reported remarkable sales volume gains of 54% and 68%, respectively. Shell Energy North America, Nexen Inc. and Tenaska Marketing Ventures all reported sales volume increases of more than 20%, while Chesapeake Energy Corp. and XTO Energy Inc. both had sales that were up by 32% over 1Q2007.

The top three physical gas marketers in the latest survey -- BP plc, Shell Energy and ConocoPhillips -- repeated the top spots they held in the 4Q2007 survey. Together the three sold 56 Bcf/d, or more than one-third of the aggregate 147.77 Bcf/d of volumes reported by 26 marketers in 1Q2008. In the previous survey, for 4Q2007, a total of 143.04 Bcf/d was sold, according to NGI.

The survey was compiled using U.S. and Canadian physical and/or wholesale gas volumes, as reported in Securities and Exchange Commission filings, or from data provided directly to NGI.

Company 1Q2008 1Q2007 Change
BP plc 27.10 n/a n/a
Shell Energy NA 15.40 12.50 23%
ConocoPhillips 13.50 13.20 2%
Constellation 12.62 8.20 54%
Chevron 8.51 8.64 -2%
Louis Dreyfus 8.43 5.01 68%
RBS Sempra 7.10 9.10 -22%
Nexen 6.60 5.40 22%
Lehman Brothers 6.45 n/a n/a
Tenaska 6.40 5.30 21%
Oneok 3.74 3.74 0%
Encana 3.73 3.40 10%
UBS 3.15 3.60 -13%
Sequent 2.70 2.40 13%
Hess 2.50 2.50 0%
Merrill Lynch 2.50 2.20 14%
Devon 2.45 2.24 9%
Anadarko 2.14 2.02 6%
Chesapeake 2.06 1.56 32%
ExxonMobil 1.99 2.36 -16%
Enserco 1.79 1.90 -6%
XTO 1.71 1.30 32%
Canadian Natural 1.54 1.72 -10%
Centerpoint 1.48 1.72 -14%
Apache 1.10 1.12 -2%
El Paso 1.08 1.10 -2%
Total* 147.77 102.23 45%

Source: Quarterly financial reports with the Securities and Exchange Commission, or if necessary, statements signed by company officials and provided to NGI.

*Companies providing data directly to NGI include BP plc, Chevron Corp., ConocoPhillips, Constellation Energy Commodities Group, Lehman Brothers, Louis Dreyfus Energy Services, Merrill Lynch Commodities, Shell Energy North America, Tenaska Marketing Ventures and UBS Energy. BP and Lehman did not participate in the 1Q2007 survey.

©Copyright 2008 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Although the total physical gas volumes reported sold in the first three months of 2007 were 102.23 Bcf/d, or 45% less than in 1Q2008, the 2007 aggregate did not include the largest marketer, BP, which this year reported 27.1 Bcf/d in sales, nor Lehman Brothers, which was in ninth place with 6.45 Bcf/d in sales in the latest tally.

"The physical market is highly transparent and very robust," said Jenny Fordham, director of energy markets with the Natural Gas Supply Association. The gas market's transparency -- and liquidity -- indicate a healthy system, she said.

Producers, with their exceptionally strong balance sheets, held four of the top 10 spots in NGI's ranking. Producers have been in the top spots of NGI's annual ranking since 2003.

Shell, in the second spot for the latest ranking, sold 15.40 Bcf/d in the quarter, which was 23% more than the 12.50 Bcf/d sold in 1Q2007. ConocoPhillips, meanwhile, reported a 2% increase to its volumes sold, to 13.50 Bcf/d from 13.20 Bcf/d.

Constellation Energy, whose physical gas sales volumes jumped 54% to 12.62 Bcf/d from 8.2 Bcf/d, edged out Chevron Corp. to claim fourth place. Chevron, in fifth place, reported that its gas sales dropped 2% in 1Q2008 to 8.51 Bcf/d from 1Q2007's 8.64 Bcf/d.

Louis Dreyfus Energy, in the sixth spot, continued to show its prowess in gas marketing, claiming the biggest increase in quarterly sales with a 68% jump from a year ago, to 8.43 Bcf/d from 5.01 Bcf/d. The double-digit growth is even more than the 55% increase in gas volumes that the company reported in 4Q2007 (see NGI, March 17).

New York-based hedge fund Highbridge Capital Management, majority owned by JP Morgan Chase & Co. (JPM), formed a trading partnership with Louis Dreyfus Group's merchant energy arm a year ago (see NGI, Jan. 15, 2007).

Today Louis Dreyfus, with trading offices across North America, has more than 240 employees engaged in physical and financial markets. Its natural gas division and Canadian affiliates market gas on U.S. Gulf Coast and Canadian pipelines, most of which is aggregated directly from wellhead locations. Louis Dreyfus also provides gas processing services through its 132 MMcf/d of equity capacity at the Sea Robin Gas Plant and through leased third-party plant capacities. To support its northern tier gas business, the company's Canadian affiliate controls 4.2 Bcf of high-deliverability gas storage at AECO-C under long-term lease.

RBS Sempra, in seventh place, reported a 22% decline in gas sales from a year ago to 7.10 Bcf/d in 1Q2008 from 9.10 Bcf/d. Sempra Commodities had traditionally been one of the leaders in NGI's quarterly surveys; it ranked in sixth place in the 4Q2007 tally. Earlier this year San Diego-based Sempra completed a joint venture with the Royal Bank of Scotland (RBS) and the company's trading unit now is part of RBS's global banking and markets business (see NGI, March 31).

According to Sempra CEO Don Felsinger, the joint venture allows the parent company to remain relatively insulated from the global credit crunch and it provides the trading unit with more growth opportunities in commodities trading.

Nexen, whose gas sales were 22% higher than a year ago, claimed the eighth spot in the survey, with physical gas volumes at 6.60 Bcf/d from 5.40 Bcf/d in 1Q2007. Tenaska Marketing Ventures rounded out the top 10, with a 21% rise in physical gas volumes sold to 6.40 Bcf/d from 5.30 Bcf/d a year earlier.

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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