Confirmation

Amid confirmation that volumes of exports to the United Statesare on the rise and confident predictions that prices will staystrong, Canadian natural gas drilling is accelerating rapidly. Thenumber of gas-well completions in western Canada is expected to hitat least 8,200 next year.

Amid confirmation that volumes of exports to the United Statesare on the rise and confident predictions that prices will staystrong, Canadian natural gas drilling is accelerating rapidly. Thenumber of gas-well completions in western Canada is expected to hitat least 8,200 next year.

Industry merger and acquisition activity last week was a wholesale confirmation of two major trends: the convergence of gas and electricity operations, and consolidation. Two more of the nation’s largest diversified gas pipeline companies were snatched up by two major energy distributors. Sempra Energy (SRE) announced it is buying KN Energy (KNE) in a stock-and-cash transaction valued in the aggregate at $6 billion, a 24% premium to KNE’s recent stock price, and Dominion Resources said it is buying Consolidated Natural Gas Co. (CNG) for about $6.3 billion in stock, a 25% premium (see related story this issue).

Industry merger and acquisition activity yesterday was astartling confirmation of two major trends: the convergence of gasand electricity operations, and consolidation. Two more of thenation’s largest diversified gas pipeline companies were snatchedup by two major energy distributors. Sempra Energy (SRE) bought KNEnergy (KNE) in a stock-and-cash transaction valued in theaggregate at $6 billion, a 24% premium to KNE’s recent stock price,and Dominion Resources bought Consolidated Natural Gas Co. (CNG)for about $6.3 billion in stock, a 25% premium.

Nymex futures gave an early “head fake” looking to rebound fromlosses registered on Tuesday, but the move was insubstantial,giving way to minor softening before the close Wednesday. That leftthe market still in limbo without a clear signal whether the bottomhad been reached. The August contract slipped 1.7 cents to settleat $1.934 during relatively high volume of 82,830.