Coal producers took a powder in the power generation game during the first half of the year as low-priced natural gas swooped in and captured market share, but an economic recovery could turn the tables again, according to analysts at Raymond James & Associates Inc.
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Lower Tertiary’s Walker Ridge Grabs Top Bid in MMS Lease Sale
The Walker Ridge in the Lower Tertiary of the deepwater Gulf of Mexico (GOM), which may — or may not — hold vast amounts of oil and natural gas reserves, captured the highest bid for a block in the Minerals Management Service’s (MMS) Central GOM sale on Wednesday.
American Chemistry Council: Gasoline Price Hike Pales Next to Natural Gas Price Run-Up
While rising gasoline prices have captured the attention of Capitol Hill and the mainstream media in past weeks, the spurt in gasoline costs is “nearly inconsequential” when compared to the sharp run-up in natural gas prices over the past years, said the American Chemistry Council (ACC) President Greg Lebedev on Thursday.
Industry Briefs
Houston-based Cheniere Energy Inc. said its Exploration Group generated, captured and sold 16 prospects on 7,000 acres to a variety of industry partners last year. Cheniere received up-front payments along with retained overrides and carried working interests with no obligation for drilling and development costs. Seven of these prospects were drilled during 2002 resulting in five discoveries. One development well was also drilled successfully in 2002. At year-end, Cheniere’s net reserves from these successful prospects were 2.5 Bcfe, of which 1.3 Bcfe was classified as proved and 1.2 Bcfe as probable. Value of the proved reserves was $5.1 million, and for the combined proved and probable reserves it was $9.4 million. Since the beginning of 2003, Cheniere’s partners have drilled three development wells, adding 0.5 Bcfe of net proved reserves, bringing Cheniere’s total proved and probable reserves to 3.0 Bcfe to date. Cheniere’s partners are planning to drill an additional development well and eight exploratory wells on Cheniere prospects during the year. Cheniere affiliate Gryphon Exploration Co., in which Cheniere owns a 9.3% interest and Warburg Pincus the balance, drilled nine wells in 2002 and had five discoveries. At year-end, Gryphon had proved reserves of 29.7 Bcfe and probable reserves of 9.2 Bcfe. Value of the proved reserves was $106.9 million, and for the combined proved and probable reserves it was $138.8 million. Gryphon expects to drill 14 exploratory wells and three to four development wells in 2003. Its daily production at year-end was 20 MMcfe/day and is expected to rise to 35 MMcfe by the end of the first quarter.
Cogen Market Growth Slows, GRI Says
While natural gas has captured the lion’s share of the expandingcogeneration market in recent years, “the phenomenal growth of[cogeneration in] the past was a one-time event resulting from aunique combination of regulatory and market changes,” according tothe Gas Research Institute’s Marie Lihn.
Columbia Gas of Virginia Calls Choice Pilot a Success
Columbia Gas of Virginia says the first year of its two-yearcustomer-choice program has captured high marks, with aboutone-fifth of its eligible customers in the northern part of thestate having signed up to participate in it so far. This is the”best endorsement for the [program’s] expansion” throughoutColumbia’s entire service territory, a company official said.