Cents

Murphy Oil Corp. announced that its first quarter net income will average 90 cents to $1.10 per share, lower than expected, but the El Dorado, AR-based producer said production in the quarter will be slightly higher, averaging 136,500 boe/d. Sales volumes for the quarter will average 136,000 boe/d, lower than expected because of lower sales volumes in Malaysia. Canadian Natural Resources Ltd. also announced it is working to acquire some of Murphy’s Canadian natural gas assets, which are estimated to be worth C$260 million ($193 million). Pengrowth Energy Trust already has agreed to buy some of Murphy’s remaining Western Canadian Sedimentary Basin assets for C$550 million. The assets include interests in the west central and Peace River Arch areas (including McLeod, Deep Basin and Peace River Arch interests); southern Alberta (including interests in Countess, Princess and Twining/Three Hills); and heavy oil interests (including properties in Lindbergh, Tangleflags and Lloydminster areas). Canadian Natural said the assets it wants to purchase produce about 40 MMcf/d. The transaction would increase its 2004 oil and gas production about 2%, according to the company. Some of the properties are subject to rights of first refusal, which means the outcome of the bid is uncertain.

UBS analysts raised their gas price forecast last week by 40 cents/MMBtu to $5.05 at the Henry Hub for 2004 and increased their long-term “equilibrium” price for natural gas to $4.65 from $4.15, citing higher than expected first quarter price levels, sharper first year well decline rates, high crude oil prices and an abundance of gas-fired power generation.

UBS analysts raised their gas price forecast Monday by 40 cents/MMBtu to $5.05 at the Henry Hub for 2004 and increased their long-term “equilibrium” price for natural gas to $4.65 from $4.15, citing higher than expected first quarter price levels, sharper first year well decline rates, high crude oil prices and an abundance of gas-fired power generation.

Wednesday’s biggest price gains of up to 20 cents or so were concentrated in the West, but most of the market was limited to performances of flat to up a little more than a dime. Traders were looking beyond current mild conditions expected to prevail into Thursday in most areas, a marketer said, and instead focused on forecasts of significantly colder weather going into the weekend.

Lehman Brothers on Tuesday lowered its 2004 natural gas price forecast to $3.75/MMBtu from $4.25 and also lowered the longer term forecast to $3.75 from $4.00 because near-record injection levels heading into the heating season “could cause significant price weakness.”

Lehman Brothers on Tuesday lowered its 2004 natural gas price forecast to $3.75/MMBtu from $4.25 and also lowered the longer term forecast to $3.75 from $4.00 because near-record injection levels heading into the heating season “could cause significant price weakness.”

Gas prices fell about 20 cents last week at most points East of the Rockies despite the loss of about 8 Bcf of gas production because of shut ins in the Gulf of Mexico due to Hurricane Claudette. While about 2.7 Bcf/d of supply was knocked out on Tuesday when the hurricane made landfall on the central Gulf Coast of Texas near Matagorda Bay, nearly all of the supply was back on stream by Friday.

A 15.5-cent pop higher in August gas futures Monday left some analysts and brokers considering the possibility that the market has found a summertime bottom due to recent higher temperatures, expectations of smaller storage injections and the likelihood of Atlantic hurricanes. But most observers said they aren’t willing to write off the downtrend just yet. The August contract ended the day at $5.381.

New York City-based Consolidated Edison lowered its 2003 earnings guidance last week by 8 cents/share to a range of $2.82 to $2.97 a share in response to adjustments made because of a proposed public offering of 8.7 million common shares, which is expected to raise $345 million. The company’s previous forecast of 2003 earnings was $2.90 to $3.05/share.