Compared

While convinced the oil price is a bubble ready to burst at any time, Canadians see a firm floor holding up under natural gas — and not least because it is a struggle to maintain their contribution to the North American “continental market.” Consensus forecasts north of the border draw a sharp contrast between the oil and gas markets.

In an interim production report covering April and May, ChevronTexaco reported Thursday that its U.S. oil and natural gas production was roughly flat compared with the first quarter. A small increase in liquids production offset a small decrease in natural gas, the company said.

Houston-based driller Rowan Companies Inc. reported its third quarter offshore rig utilization rate was 94%, compared with 88% in the second quarter and 93% in 3Q02. Day rates increased 25% from the second quarter and were up 17% from the same period a year ago. Land rig utilization was 72% in the quarter, versus 76% in 3Q02. Chairman Bob Palmer said he was pleased that the company had returned to profitability after a net loss last year, but said the company was disappointed with its quarterly performance. “Unanticipated downtime in our Gulf of Mexico fleet hindered our drilling operations and our manufacturing and aviation financial results were less than we anticipated.” Longer term, however, Rowan expects its foreign drilling markets “will continue to attract competitive rigs, further tightening the Gulf of Mexico jack-up market. We are witnessing increasing opportunities abroad for our own harsh environment equipment. We expect that our average Gulf of Mexico jack-up day rates, which increased by 10% in the third quarter, will continue improving during the fourth quarter, and our fleet utilization will again increase. Of course, our optimism is based upon oil and natural gas prices sufficiently high enough to encourage exploration and development drilling by our customers.”

The start of the November aftermarket saw a decidedly mixed bag of price movement Thursday. Compared with last-of-October numbers, Nov. 1 pricing ranged from about half a dollar lower (San Juan Basin) to a little more than a dime higher (SoCal border), with many gradations between those extremes. Overall, the negative changes outweighed the positive ones.

Despite a relatively strong balance sheet compared to the energy sector’s many fallen giants, San Diego-based Sempra Energy still faced mixed reviews from credit rating agencies last week, and its prospects for re-negotiating its $6.6 billion 10-year power supply deal with California’s Department of Water Resources were uncertain despite the ongoing federal regulatory proceedings on the DWR contracts as a whole.

The power delivery system in Texas is in “excellent” shape compared with other states, but that said, reducing transmission constraints remains key to continued reliability, according to the latest study by the state’s grid operator, the Electricity Reliability Council of Texas (ERCOT). As ERCOT noted, most of the additional transmission facilities it expects to need in the next few years would be required whether or not the state had chosen to deregulate its electricity market because of growth in major regions, as well as strong demand.

Natural gas drilling fell significantly during the second quarter compared to the same period a year ago, according to a report from Washington, DC-based American Petroleum Institute (API).

Natural gas drilling fell significantly during the second quarter compared to the same period a year ago, according to a report from Washington, DC-based American Petroleum Institute (API).

Natural gas drilling fell significantly during the second quarter compared to the same period a year ago, according to a report from Washington, DC-based American Petroleum Institute (API).