Cash

Chesapeake Energy 1998 year-end results were hammered bynon-cash impairment charges of $881 million. Due mainly to “thesevere decline in oil and natural gas prices during 1998″Chesapeake lost $934 million on revenues of $382 million.

The cash market continued to eke out small gains Tuesday inquiet activity that was starting to remind some of last month’sgeneral lack of volatility. New averages ranged from flat to abouta nickel higher, with the varying increases scattered throughoutthe producing and market areas.

ONEOK Inc. is building up its midstream presence by agreeing toacquire all the Oklahoma midstream gas gathering and processingassets of Koch Midstream Enterprises for $285 million in cash.

The slippery slope on which cash prices started sliding earlierthis week got steeper Thursday. As on Wednesday, the softness wasbeing felt in both the late-February incremental and March bidweekmarkets.

ONEOK Inc. is building up its midstream presence by agreeing toacquire all the Oklahoma midstream gas gathering and processingassets of Koch Midstream Enterprises for $285 million in cash.

A break in the flat price pattern that has dominated the overallcash market during February came Tuesday, and appropriately it wasto the downside, where many sources had long expected prices to beheaded because of mild weather, a softening screen and a massivestorage surplus for this late in the winter season.

With the Houston trade fair ended, the cash market startedreturning to normal Friday. And continuing the pattern seen formost of February, “normal” meant essentially flat pricing. Butsigns of weakening were more evident as small downticks notablyincreased in frequency. Some of the softness was attributable tothe normal weekend drops in gas demand.

Without clear fundamental or technical direction, the futuresmarket was left to follow the early lead of cash prices, which wasgenerally softer Friday. Lack of substantial liquidity was also alimiting factor during the abbreviated trading session as manytraders elected to remain on the sidelines. The March contractfinished down 3 cents at $1.807.

The overall tone of the cash market remained flat Thursday, buta growing number of points were recording tiny decreases. Thetouches of softness came even as an eastbound cold front reachedthe nation’s midsection, reminding regions that had beenexperiencing record seasonal warmth recently that winter isn’tquite over yet. One source speculated that prices may be finallystarting to crack under the strain of having maintained theirpositions during a long period of no fundamentals support. Even thearrival of some for-real weather fundamentals may not be enough toprovide support, he said.