Increased natural gas sales by BP plc weren't enough to overcome mild winter-sparked decreases reported by several other big name companies, resulting in a 4% (5.86 Bcf/d) decline in gas sales transactions in 4Q2012 (135.01 Bcf/d) compared with 4Q2011 (140.87 Bcf/d), according to NGI's 4Q2012 Top North American Gas Marketers Ranking. The full-year 2012 total for participating companies was virtually unchanged from 2011.

Twenty-seven leading gas marketers reported combined sales transactions of 135.01 Bcf for 4Q2012, with seven of the survey's top 10 marketers and 18 companies overall reporting lower numbers than in 4Q2011. For full year 2012, the 27 leading gas marketers reported combined sales transactions of 136.56 Bcf, virtually unchanged from the 136.85 Bcf for full year 2011. Six of the top 10 marketers and 15 companies overall posted either no change or declines year-over-year.

BP tightened its grip on the top spot in the survey, reporting 24.30 Bcf/d for 4Q2012, up 2% from 23.90 Bcf/d in 4Q2011. CEO Bob Dudley has lately been expressing optimism for the energy giant, which has faced an onslaught of legal bills and payouts over the past two years from the devastating 2010 Macondo well blowout in the deepwater Gulf of Mexico (GOM). The company entered 2013 "as a more focused oil and gas company with a smaller, but stronger portfolio that provides our platform for growth, a set of distinct and capabilities, a disciplined financial framework and a clear strategic direction," Dudley said last month (see Daily GPI, Feb. 6). And any talk about peak oil and natural gas is over, according to the BP chief (see Daily GPI, March 7). Once the top natural gas producer in North America, BP is now training its sights on oil (see Daily GPI, Dec. 4, 2012).

Company 4Q2012 4Q2011 Change
1. BP 24.30 23.90 2%
2. ConocoPhillips 15.69 16.10 -3%
3. Shell Energy NA 12.20 13.80 -12%
4. Macquarie Energy* 9.40 10.82 -13%
5. EDF Trading NA 6.69 7.22 -7%
6. Tenaska 6.50 6.00 8%
7. JP Morgan 6.01 6.21 -3%
8. Sequent 5.96 5.44 10%
9. Chevron 5.73 6.42 -11%
10. Louis Dreyfus 5.35 7.20 -26%
11. J. Aron & Co.*** 4.32 3.56 21%
12. ExxonMobil ** 4.09 4.41 -7%
13. Chesapeake** 3.04 2.96 3%
14. Encana** 2.95 3.46 -15%
15. Hess 2.88 2.01 43%
16. Anadarko 2.52 2.33 8%
17. Devon** 2.50 2.66 -6%
18. Citigroup 2.30 3.40 -32%
19. ONEOK 1.95 2.24 -13%
20. Southwestern Energy Co 1.93 1.75 10%
21. CenterPoint Energy 1.58 1.64 -4%
22. Gavilon 1.53 1.41 9%
23. Apache** 1.44 1.49 -3%
24. BOA Merrill Lynch 1.26 1.13 12%
25. Canadian Natural 1.13 1.28 -12%
26. Atmos 0.92 0.99 -7%
27. Gazprom 0.84 1.04 -19%
  Total 135.01 140.87 -4%

Source: Quarterly financial reports with the Securities and Exchange Commission, or if necessary, statements signed by company officials and provided to NGI. Some previous-year data has been updated by the companies since it was originally reported.

Companies providing data directly to NGI include Bank of America Merrill Lynch, BP, Chevron, Citigroup, ConocoPhillips, EDF Trading NA, Gavilon, Gazprom, J. Aron & Co., JP Morgan, Louis Dreyfus, Macquarie Energy, Shell Energy and Tenaska. *Macquarie Energy data reflects Macquarie Energy LLC's transactions in the United States and Macquarie Energy Canada's transactions in Canada. **The gas volume figures for Apache, Chesapeake, Devon, Encana and ExxonMobil represent the amount of North American gas produced in the quarter. Those companies may be marketing more third-party gas for sale. ***J. Aron & Co. is the commodity trading subsidiary of Goldman Sachs.

ConocoPhillips, the second-ranked company in NGI's survey, ended a streak of quarter-over-quarter increases that dated back to NGI's 2Q2010 survey, reporting 15.69 Bcf/d in 4Q2012, a 3% decline compared with 16.10 Bcf/d in 4Q2011. The independent exploration and production (E&P) company -- ConocoPhillips spun off its integrated refining operations last year (see Daily GPI, April 17, 2012) -- plans to sell stakes in an Australian project and in the Canada oilsands to direct more funds to U.S. onshore plays (see Daily GPI, March 4).

Shell Energy NA, the third-ranked company in the survey, reported a 12% decrease with 12.20 Bcf/d in 4Q2012, compared with 13.80 Bcf/d in 4Q2011. During the quarter, Shell sold its 50% working interest in the Holstein Field in the GOM to Plains Exploration & Production Co. for $560 million (see Daily GPI, Dec. 3, 2012). Last year Shell unveiled plans to leverage its abundant natural gas resources in North America, for liquefied natural gas (LNG) exports, gas-to-liquids and gas-to-chemicals facilities, as well as LNG for transport (see Daily GPI, Feb. 3, 2012).

Rounding out the survey's top five, Macquarie Energy reported 9.40 Bcf/d, a 13% decline compared with 10.82 Bcf/d in 4Q2011, and EDF Trading NA reported 6.69 Bcf/d, a 7% decline compared with 7.22 Bcf/d in 4Q2011. BP, Tenaska (6.50 Bcf/d in 4Q2012, compared with 6.00 Bcf/d in 4Q2011) and Sequent (5.96 Bcf/d, compared with 5.44 Bcf/d in 4Q2011) were the only companies in the Top 10 to report higher numbers than in the year ago period.

The 4Q2012 numbers were dragged down by mild winter weather in December, according to energy analyst Stephen Smith of Stephen Smith Energy Associates.

"It was more of a demand thing than a supply thing," he told NGI.

Natural gas production in the Lower 48 was 72.70 Bcf/d in December, down 1.1% (0.83 Bcf/d) compared with the previous month, according to the most recent data from the Energy Information Administration (EIA) (see Daily GPI, March 1).

"What's significant about that is the fact that it was the first decline of that magnitude in at least a year or more," Smith said. "Some of it was one-time factors, such as freeze offs and things like that, but if you're looking for reasons why there wasn't as much gas marketed in the fourth quarter, to some extent in some regions there wasn't as much gas produced in December compared to November, and that may have been a contributing factor."

And while an improving economy and the promise of liquefied natural gas exports could eventually shore up natural gas prices, it is more likely to be temperatures this summer that will have the most immediate price impact. An unusually hot summer could push prices as high as $4.50/Mcf, Smith said.

"The strongest single predictor of prices is the surplus level relative to five-year numbers...when I run a model with summer temperatures about 3% hotter than normal, I end up with a 100 Bcf deficit, rather than a surplus, by August." That would drive prices to about $4.00/Mcf, he said. But recent summers have been even hotter than that. Average temperatures 8-11% hotter than normal would push the natural gas deficit well past 100 Bcf and add another 50 cents/Mcf to prices.

"So there is a near term upside vulnerability to consumers, if you look at it that way, or a happy period for producers, that stems from the fact that we don't have a surplus that's anywhere close to where it was last year, and it's been coming down fast because of the cold spring, and also because gas prices were low enough for long enough to help increase demand."

Working gas in underground storage was 1,938 Bcf as of March 8, according to EIA's Weekly Gas Storage Report. That was 440 Bcf less than a year earlier and 198 Bcf more than the five-year average.

Highlights of NGI's 4Q2012 Top North American Gas Marketers Ranking include a 21% increase for J. Aron & Co. (4.32 Bcf/d, compared with 3.56 Bcf/d in 4Q2011), a 3% increase for Chesapeake Energy Corp. (3.04 Bcf/d, compared with 2.96 Bcf/d in 4Q2011), a 43% increase for Hess. (2.88 Bcf/d, compared with 2.01 Bcf/d in 4Q2011), an 8% increase for Anadarko (2.52 Bcf/d, compared with 2.33 Bcf/d in 4Q2011) and an 10% increase for Southwestern Energy Co. (1.93 Bcf/d, compared with 1.75 Bcf/d in 4Q2011).

The 4Q2012 survey also saw a 9% increase for Gavilon (1.53 Bcf/d, compared with 1.41 Bcf/d in 4Q2011), and a 12% increase for BOA Merrill Lynch (1.26 Bcf/d, compared with 1.13 Bcf/d in 4Q2011).

In NGI's Full-Year 2012 Top North American Gas Marketers Ranking, both BP (3%) and ConocoPhillips (4%) reported increases over full-year 2011. Other highlights of the full-year 2012 survey include a 4% increase for Tenaska (6.50 Bcf/d, compared with 6.25 Bcf/d in 2011); a 6% increase for Sequent (5.54 Bcf/d, compared with 5.21 Bcf/d in 2011); a 23% increase for J. Aron & Co. (4.20 Bcf/d, compared with 3.42 Bcf/d in 2011); and a 12% increase for Chesapeake (3.09 Bcf/d, compared with 2.75 Bcf/d in 2011).

Company Full Year 2012 Full Year 2011 Change
1. BP 23.80 23.00 3%
2. ConocoPhillips 16.09 15.43 4%
3. Shell Energy NA 12.93 13.20 -2%
4. Macquarie Energy * 10.09 10.23 -1%
5. EDF Trading NA 7.19 7.22 0%
6. Tenaska 6.50 6.25 4%
7. JP Morgan 6.27 6.68 -6%
8. Chevron 5.77 6.35 -9%
9. Sequent 5.54 5.21 6%
10. Louis Dreyfus 5.32 5.58 -5%
11. J. Aron & Co. *** 4.20 3.42 23%
12. ExxonMobil ** 4.19 4.33 -3%
13. Chesapeake ** 3.09 2.75 12%
14. Encana ** 2.98 3.33 -11%
15. Citigroup 2.78 3.57 -22%
16. Devon ** 2.60 2.61 0%
17. Anadarko 2.50 2.33 7%
18. Hess 2.30 2.20 5%
19. ONEOK 1.94 2.32 -16%
20. Southwestern Energy Co. 1.85 1.68 10%
21. CenterPoint Energy 1.54 1.53 1%
22. Gavilon 1.47 1.29 14%
23. Apache ** 1.45 1.50 -3%
24. Canadian Natural 1.22 1.26 -3%
25. BOA Merrill Lynch 1.17 1.01 16%
26. Atmos 0.94 1.05 -10%
27. Gazprom 0.84 1.52 -45%
  Total 136.56 136.85 0%

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 Bank of America Merrill Lynch, BP, Chevron, Citigroup, ConocoPhillips, EDF Trading NA, Gavilon, Gazprom, J. Aron & Co., JP Morgan, Louis Dreyfus, Macquarie Energy, Shell Energy and Tenaska. *Macquarie Cook Energy data reflects Macquarie Energy LLC's transactions in the United States and Macquarie Energy Canada's transactions in Canada. **The gas volume figures for Apache, Chesapeake, Devon, Encana and ExxonMobil and represent the amount of North American gas produced in the quarter. Those companies may be marketing more third-party gas for sale. ***J. Aron & Co. is the commodity trading subsidiary of Goldman Sachs.

The survey ranks marketers on sales transactions only. BP, ConocoPhillips, Shell and Macquarie were also the top four companies in NGI's analysis of 2011 Form 552 filings with the Federal Energy Regulatory Commission, which detailed total combined natural gas purchase and sales volumes (see Daily GPI, May 30, 2012). The total yearly combined volume in 2011 was the highest recorded since the Commission began releasing the data in 2009.

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