Raymond James & Associates’ gas analysts warned investors last week the latest production statistics indicate gas production is down 4-6% compared to last year and a tally of producers’ statistics for the second quarter by NGI found that conclusion to be accurate (See Table).
Analysts
Articles from Analysts
Raymond James Eyes Production Drop
Raymond James & Associates’ gas analysts warned investorsyesterday the latest production statistics indicate gas productionis down 4-6% compared to last year. The St. Petersburg, FL-basedfirm highlighted several indicators, including sharply loweryear-to-year storage injections, reduced E&P company productionfigures, a growing “balancing item” reported by the Department ofEnergy in its gas market statistics and a survey of three of thelargest gas producing states.
Columbia Plans Share Repurchase; Earnings Rise
Columbia Energy Group beat analysts expectations with a 15% jump($3.3 million or five cents per share) in net income during thesecond quarter to $26.1 million, or 32 cents per share. It alsoupped the ante yesterday in its effort to fend off NiSource’s $5.7billion hostile takeover offer by adding $400 million to its stockrepurchase program, which now totals $420 million.
Raymond James Boldly Predicts $10 Gas Next Winter
Many industry analysts have been steadily raising their gasprice forecasts because of the year-long drilling slump and itspotential impact on gas deliverability, but St. Petersburg,FL-based Raymond James & Associates went out on a limb last weekpredicting sharp price spikes above $10/Mcf at the Henry Hub nextwinter and an average of $3/Mcf at the hub next year.
Raymond James Boldly Predicts $10 Gas this Winter
Many industry analysts have been steadily raising their gasprice forecasts because of the year-long drilling slump and itspotential impact on gas deliverability next winter, but St.Petersburg, FL-based Raymond James & Associates went out on alimb this week predicting sharp price spikes above $10/Mcf at theHenry Hub this winter and an average of $3/Mcf at the hub nextyear.
Avista Predicts 1Q Earnings Downturn
Avista Corp. of Spokane, WA, its first-quarter earnings pershare could fall as much as 15 cents per share below securitiesanalysts’ current consensus first quarter estimate of 49 cents pershare. However, CEO T.M. Matthews said the company is stillcomfortable with analyst expectations of earnings for the year ofbetween $1.55-$1.65 per share
Analysts Say Producers are Ripe for the Picking
Don’t get sick of merger-mania quite yet, warns All Star Oilanalyst Fadel Gheit. Burlington Resources is leading the next waveof attractive independent oil and gas producers that are ripe fortakeover, he claims.
Analysts See Spring Price Plunge Followed by Major Winter Spikes
With weather forecasts producing bearish news at every turn andnational storage reserves looming ever larger, Raymond James &Associates recently published a report projecting spot wellhead gasprices will drop below the $1.50/Mcf level before the beginning ofsummer. The study, however, also warns of a gas “price shock” inearly 2000, when gas shortages run rampant and production is unableto keep up because of sharp declines in exploration and productionspending. It seems the industry is in store for a spot marketroller coaster ride.
Analysts Generally Predict Price Woes for 1999
The recent rash of producer spending cuts (see related story)comes at a time when the message on prices from the analystcommunity is pretty gloomy, too. “There’s not much holding [gasprices] up,” said Thomas J. Woods, Ziff Energy vice president forU.S. Gas Services. Woods said Ziff has been warning its clientsthat current prices are not supportable. “We had put out some earlywarnings in July when prices first frayed, and we said that therewas a very significant possibility that this would go [on].”
Analysts Warn Normal Temps Will Bring Winter Price Spikes
Raymond James & Associates Equity Research group warnedclients this week a return to normal temperatures this winter couldbring a greater gas market surprise than expected. Winterconsumption spikes over the past two winters have trended downward,but that was because winter 1996/97 was nearly 5% warmer thannormal and last winter was nearly 9% warmer than normal, the firmnoted. Normal weather likely will bring a significant increase inconsumption and with it a significant increase in gas prices thiswinter compared to last.