Adjusting

Devon Energy Corp.’s exit from the Gulf of Mexico last year and the recent sale of its Brazilian assets in order to focus on North American onshore drilling have begun to pay significant dividends for the Oklahoma City-based independent, including record high North American onshore production, CEO John Richels said Wednesday.

July natural gas futures retreated Tuesday as traders saw the market adjusting to cash quotes and admitted that much of Monday’s 32.5-cent advance was stop-loss orders getting hit and not the result of any fundamental change in the market. July futures fell 5.3 cents to $4.129 and August dropped 7 cents to $4.312. July crude oil eased 15 cents to $70.47/bbl.

Adjusting for the hurricane-related production deferrals last fall, 4Q2005 U.S. natural gas production would have been up for the first time in years, Raymond James’ analysts said in the latest “Stat of the Week.” However, a lack of rigs, higher decline rates and a slowing in efficiencies likely will constrain the supply picture for years to come.

As part of Evening Cycle scheduling for Friday’s gas day, Tennessee said it anticipated adjusting each Zone 0 100 Leg Supply Aggregation Contract to a tolerance of 100 dekatherms. Pool receipts and deliveries will be adjusted based on rankings provided in the contract, the pipeline said. It also urged Zone 1 100 Leg Supply Aggregation customers to review their pool imbalances for Friday and resolve any exceeding the 100-dekatherm limit by Cycle 1 scheduling in order to avoid having those adjusted.

With the sale of several assets and by adjusting its accounting methods, Williams reported Tuesday a loss in the first quarter from continuing operations of $57.7 million (minus 13 cents per share), compared with restated income from continuing operations of $98.4 million (5 cents) for the same period last year.

In a Securities and Exchange Commission (SEC) filing on Wednesday, Houston-based EOG Resources Inc. said it is adjusting its production and drilling activity downward through the rest of the year and now does not expect to meet its earlier production forecast because of falling natural gas prices.