Activity

Houston-based El Paso Corp. and its subsidiary Coastal Corp.said yesterday they had taken a combined charge of $1.28 billion asof January 1, 2001 under a new U.S. accounting rule related tohedging activities and derivative instruments for 2000 earnings.Net of taxes, El Paso’s charge was $821 million and Coastal’s was$457 million.

Finding no evidence of illegal activity on the part of localdistribution gas companies, Missouri Attorney General Jay Nixonstill wants the state’s system of natural gas regulation overhauledbecause it does not provide consumers with appropriate protectionsfrom “dramatic price increases.”

Frontier market activity is increasing across the board forNorth American natural gas producers who have begun pouring moreresources into deepwater Gulf of Mexico, Atlantic Canada and theArctic to complement the increasingly stronger plays onshore.Still, bureaucracy is hindering the ramp up for new exploration andproduction that could hinder supplies into the future, warned someenergy experts last week.

Frontier market activity is increasing across the board forNorth American natural gas producers who have begun pouring moreresources into deepwater Gulf of Mexico, Atlantic Canada and theArctic to complement the increasingly stronger plays onshore.Still, bureaucracy is hindering the ramp up for new exploration andproduction that could hinder supplies into the future, warned someenergy experts yesterday.

Starting 2001 with a rush of activity, Burlington Resources (BR)announced that it has entered into separate agreements totalingapproximately $385 million with Petrobank Energy and Resources Ltd.and ATCO Gas for properties in the Western Canadian SedimentaryBasin with combined net proved and net probable reserves of 497Bcfe. The company also reported that it raised its net income from$1 million for the full year 1999, to $675 million for the fullyear 2000.

The cash market both calmed down and went further down in mostcases in Thursday’s activity. A majority of points ranged from flatto about 30 cents lower. The notable exceptions were declines ofabout 40 cents or more in California and Transco/Texas Easterncitygates in the Northeast, and on the opposite side of the coinwere gains in the Pacific Northwest and on some Rockies pipes.

McMoRan Exploration has announced its Vermillion Block 196 #2exploratory well has revealed 70 feet of net oil and gas pay inthree sands between depths of 13,160 and 14,350 feet.

A property swap announced yesterday by Anadarko Petroleum andAEC Oil and Gas illustrates the increased activity in the far Northand the likelihood that the North Slope in Alaska and the MackenzieDelta in the Northwest Territories of Canada are equally importantfuture supply sources for the U.S. marketplace.

The cash market appears to have decided to take it easy at leasttemporarily. Tuesday’s activity remained relatively subdued, andfew points strayed much further than 2-3 cents to either side offlat.