Arrangements

As a result of early settlement and reset arrangements for 37% of its 2009 commodity hedge volumes, XTO Energy Inc. said it has realized about $900 million of after-tax proceeds that it has used to reduce its outstanding debt. The company expects to end the first quarter with net debt of approximately $11 billion. The net effect of the early settlements is to accelerate cash receipts, while maintaining XTO’s full hedge position against further declines in oil and natural gas prices during the year. By executing the transactions, the company said it has accomplished the lion’s share of its previously announced $1.25 billion minimum debt reduction. In November XTO said it had 1,745 MMcf of gas hedged at $8.83/Mcf for 2009 and 730 MMcf of gas hedged at $8.67/Mcf for 2010 (see Daily GPI, Nov. 21, 2008). At the same time, the company’s board of directors approved a 2009 capital budget for development and exploration expenditures of $3.3 billion and an additional $500 million was budgeted for the construction of pipeline infrastructure and compression and processing facilities. Fort Worth, TX-based XTO’s properties are concentrated in Texas, New Mexico, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska, Utah, Louisiana, Mississippi, Montana, North Dakota, Pennsylvania, New York, West Virginia and Kentucky.

Maritimes & Northeast Pipeline filed an application with FERC for a 418,000 Dth/d pipeline expansion to support gas from the Canaport liquefied natural gas (LNG) import terminal, which is being built by Irving Oil and Repsol in Saint John, NB. The pipeline expansion would include the addition of five compressor stations in Maine, 1.7 miles of 30-inch diameter pipeline and modifications to other existing U.S. facilities.

If the natural gas market is considered to be in a crisis now, or at least difficult straits, the outlook for the market ahead is anything but settling, according to a study released by Cambridge Energy Research Associates (CERA) and sponsored by Accenture last Monday.

The Federal Energy Regulatory Commission last week put the brakes on an index-based transportation contract that Transwestern Pipeline negotiated with Dynegy Marketing and Trade, saying the agreement flies in the face of a mid-July order suspending the Enron-affiliated pipeline’s authority to do such deals for an entire year.

The Federal Energy Regulatory Commission has put the brakes on an index-based transportation contract that Transwestern Pipeline negotiated with Dynegy Marketing and Trade, saying the agreement flies in the face of a mid-July order suspending the Enron-affiliated pipeline’s authority to do such deals for an entire year.

Energen Resources, the production unit of Energen Corp., detailed its extensive supply arrangements with Williams and Dynegy in response to downgrades by credit rating agencies of the two energy marketers last week. Energen said both companies are current in their monthly payments for a total of about 1.6 Bcf per month on gas and gas liquids production. Williams affiliates are under contract to purchase 0.8 Bcf per month of Energen Resources’ net natural gas production through October 2002 and an estimated 0.4 Bcfe of Energen’s gas liquids production through May 2004. Dynegy affiliates are under contract to purchase 0.4 Bcf per month of Energen’s gas production through March 2003. Outstanding invoices for June production, which are due and payable later this month, total $4 million for Williams and $1.5 million for Dynegy. Energen said it has had a long-standing relationship with Williams in the San Juan Basin and with Dynegy in the Black Warrior Basin and is currently delivering to both parties under existing sales contracts. Birmingham, AL-based Energen Corp. is a diversified energy holding company with natural gas distribution in central and north Alabama and oil and gas production onshore in North America.

Energen Resources, the production unit of Energen Corp., detailed its extensive supply arrangements with Williams and Dynegy on Wednesday in response to downgrades by credit rating agencies of the two energy marketers. Energen said both companies are current in their monthly payments for a total of about 1.6 Bcf per month on gas and gas liquids production..

Energen Resources, the production unit of Energen Corp., detailed its extensive supply arrangements with Williams and Dynegy on Wednesday in response to downgrades by credit rating agencies of the two energy marketers. Energen said both companies are current in their monthly payments for a total of about 1.6 Bcf per month on gas and gas liquids production..

Power suppliers need flexibility in securing supply arrangements and should be allowed to use risk management tools, including long-term contracts, other hedging tools and, if need be, ownership of generation, against the backdrop of state-level efforts to craft and successfully implement retail electricity restructuring plans, said the Edison Electric Insititute (EEI) in recent comments filed with the Federal Trade Commission.