Salomon Smith Barney said yesterday in a report that it expectstotal equivalent production for its coverage group to be up 3%during the fourth quarter of 2000 compared with 4Q99 and up 1%versus the third quarter. Domestic 4Q gas production from the 41large producers (representing over 50% of total US production) inSSB’s coverage group is expected to be up 2.4% compared with theyear-ago fourth quarter and up roughly 2.2% versus the thirdquarter of this year.

“Cash flow per share for our coverage group is projected to beup, on average, 98% versus the year-ago fourth quarter and 23%sequentially,” the firm said. “The strong increase compared with Q41999 is primarily due to a 166% and 30% rise in natural gas and oilprices, respectively. However, the full impact of the dramatic risein natural gas prices will be muted for many companies because theysell the majority of their gas production during bidweek,” whichoccurred prior to the significant increase in prices last month.

E&P companies are expected to post solid fourth quarter 2000results, based on the continued strength of crude oil and naturalgas prices, strong demand due to substantially colder than normaltemperatures and rising production.

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