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Beneath the hefty first quarter earnings’ figures for oil and gas companies, a more compelling tale is unfolding as both majors and independents operating in North America appear to be benefiting from the move to the drill bit. Production numbers so far are mixed, but some indicate that gas production is up significantly — with some companies predicting the best is yet to come.

High commodity price have sent profits soaring for both major producers and independents. Number one major Exxon Mobil Corp. reported nearly double the profits from a year ago, and fourth-ranked Conoco Inc. also jumped. Independents EOG Resources Inc. and Houston Exploration Co., meanwhile, attributed record earnings to not only prices, but robust domestic gas production.

There are dangers down the road in relying solely on natural gas-fired electricity generation for both companies and consumers, according to Energy Security Analysis Inc. (ESAI) in its Natural Gas Power Alert released last week. The firm said the risk of not diversifying a portfolio with coal-fired or oil-fired generation greatly increases the exposure of a company or a state to the volatile natural gas market.

There are dangers down the road in relying solely on naturalgas-fired electricity generation for both companies and consumers,according to Energy Security Analysis Inc. (ESAI) in its NaturalGas Power Alert released last week. The firm said the risk of notdiversifying a portfolio with coal-fired or oil-fired generationgreatly increases the exposure of a company or a state to thevolatile natural gas market.

The amount of working gas in storage at the end of the winterheating season (March 31) will be at a record low, according to anew report by the Energy Information Administration (EIA). In fact,some operators may be forced to dip into their base gas inventoriesto maintain facilities.

Despite cold temperatures both outside and in the latest mediumrange weather outlooks, natural gas prices shuffled lower yesterdayin an extremely quiet trading session. After failing to retestWednesday’s highs yesterday morning, the April contract succumbedto light selling throughout the afternoon. Estimated volume of just32,117 contracts confirmed the thin trading activity.

Williams CEO Keith Bailey thinks his company has the best ofboth worlds: a 90-year-plus energy heritage that keeps its approachto communications “firmly footed in the direct, no-nonsense style”of its founders, coupled with a e-business edge that keeps it”young thinking.” However, as important as e-business is, Baileysaid there are two other “E’s” as important: energy and education.

After a busy year of purchasing electricity generating capacity,Allegheny Energy reported growth in both fourth quarter earnings aswell as year-end totals over 1999 levels. The company posted recordyear-end earnings of $313.7 million ($2.84ÿper share), beforeextraordinary charges, an increase of 8% over comparable 1999earnings of $307.2 million ($2.64ÿper share).

Traders cited new forecasts of colder weather, both near-termand intermediate-term, as the chief instigator of yet anotherreversal in cash market direction Thursday. Nearly all pointsrecorded strong gains between about a quarter and 60 cents.California was the conspicuous exception with further largedeclines, but it remained the most expensive market by far.