Appeared

The prospect of finding deep gas in the shallow waters of the Outer Continental Shelf (OCS) appeared to be the impetus for bidding in Wednesday’s Western Gulf of Mexico (GOM) Lease Sale 187 on Wednesday. Shallow water leases, in plays less than 200 meters deep and more than 15,000 true vertical depth, piqued most producers’ interests, with the offshore sale netting $258.7 million in total bids for chances to explore 3,996 blocks.

Tropical Storm Claudette appeared to be strengthening as it moved north, but its landfall location was still uncertain at press time Monday, with forecasts ranging from the Coastal Plains of Texas southwest of Houston to the eastern Gulf and Louisiana. The storm has caused many oil and natural gas companies to evacuate their platforms, shut down pipes and cease production (see Daily GPI, July 14).

Federal Reserve Chairman Alan Greenspan last Thursday appeared to have altered his message on liquefied natural gas (LNG) in his second appearance before Congress in less than a month, saying the United States should look to LNG primarily as a secondary, peak-shaving fuel when domestic gas sources fall short of demand.

Following an eight-day, 83-cent rally, the natural gas futures market appeared to cool its jets early Wednesday as traders liquidated long positions ahead of Thursday’s storage report and the Nymex holiday Friday. At 11:40 a.m., the May contract had tumbled all the way down to $5.495 from Tuesday’s close at $5.653, but that turned out to be the low for the day.

The energy marketplace, investors and credit analysts appeared to have little faith in Dynegy’s ability to turn its deteriorating financial picture around last week. The three credit ratings agencies cut the merchant not once but twice, the stock fell as low as 51 cents a share at one point, and counterparties were apparently ditching the company for safer ground. By Friday, buoyed by rumors that its subsidiary Illinois Power Co. may be close to being sold, optimism was up, albeit slightly, with more buyers than sellers — the price gained as much as 20 cents at midday.

In what appeared to be the second tragic death to occur in the post-Enron, scandal-plagued energy industry in four months, Charles Dana Rice, senior vice president and treasurer of energy giant El Paso Corp., was found dead last week of an “apparent self-inflicted gunshot wound” to the head at his home in the upscale River Oaks section of Houston, according to authorities. The news sent the company’s stock into a tailspin last Monday, but it picked up points later in the week.

Long-awaited Senate action on comprehensive energy legislation, which appeared briefly on the floor last Friday, is expected to spark a lengthy and contentious debate in the lower chamber when it re-emerges after the week-long Presidents Day recess.

Long-awaited Senate action on comprehensive energy legislation, which appeared briefly on the floor last Friday, is expected to spark a lengthy and contentious debate in the lower chamber when it re-emerges after the week-long Presidents Day recess.

There appeared to be just enough cold weather to keep the bears at bay for at least one more day in the East Wednesday, as regional prices ranged from flat to a little more than a nickel higher. Most western points continued to soften, however, led by drops of about a dime in California.