Consolidation

Occidental Petroleum Corp. on Friday made two deals valued at $3.2 billion that give it entry into the Eagle Ford Shale and boost its land holdings in the Bakken Shale.

Following a week of strong gains, December natural gas futures underwent some consolidation on Friday, recording a low of $8.355 before closing out the week at $8.418, down 21.9 cents from Thursday but 61 cents higher than the previous Friday’s close. The November contract expired Monday at $7.269.

There is a global theme with a mixture of hard asset and financial players in some of the recent consolidation among energy marketing/trading firms, according to the representatives speaking on a natural gas buying panel at GasMart 2007 in Chicago Thursday. Fortis Energy Marketing/Trading, Integrys Energy Services Inc. and ScottishPower’s U.S.-based PPM Energy all are the product of recent consolidations.

There is a global theme with a mixture of hard asset and financial players in some of the recent consolidation among energy marketing/trading firms, according to the representatives speaking on a natural gas buying panel at GasMart 2007 in Chicago Thursday. Fortis Energy Marketing/Trading, Integrys Energy Services Inc. and ScottishPower’s U.S.-based PPM Energy all are the product of recent consolidations.

In its last quarterly financials prior to consolidation with merger partner Cinergy Corp., Duke Energy reported that first quarter earnings from continuing operations tumbled 37 cents per share to 50 cents/share largely due to a one-time gain in 1Q2005 on the sale of TEPPCO. Quarterly earnings from ongoing operations still exceeded analysts’ estimates by a penny.

Energy giant Duke Energy Corp. announced Monday that it has entered into a definitive agreement to acquire Cincinnati, OH-based Cinergy Corp. for $9 billion in stock, creating a formidable utility company with 5.4 million natural gas and electric customers. Company officials also hinted the future might see Duke splitting off its natural gas assets and going forward as a pure electric play.

After starting out the session at a new high of $6.76, the June natural gas futures contract, one day before expiry, slid to the $6.55 level in mid-day trading before closing at $6.684, down 2.1 cents on the day.

A lack of cheap, easy drilling prospects, a succession of price shocks and industry consolidation are some of the main factors behind the downturn of natural gas production in North America, according to financial analyst Irene Haas.

A lack of cheap, easy drilling prospects, a succession of price shocks and industry consolidation are some of the main factors behind the downturn of natural gas production in North America, according to financial analyst Irene Haas.