Costs

A group of more than 50 European investors stands to collect a record US$352.6 million, plus administrative costs, from Royal Dutch Shell to settle a class action lawsuit filed over the producer’s alleged overbooking of oil and natural gas reserves over a five-year period. A U.S. settlement is expected in the next few weeks.

Pacific Gas and Electric Co. late Friday announced it had reached a settlement with all parties on natural gas transportation and storage costs covering 2008 through 2010. The settlement must be approved by the California Public Utilities Commission (CPUC), and the utility said it expects action before the end of this year.

A newly licensed technology from inventors at the Los Alamos National Laboratory promises to sharply lower the costs of gas liquefaction while also making liquefaction an option to oil producers around the world that typically flare their associated natural gas.

Ameren said that natural gas customers of its Illinois utilities (AmerenCIPS, AmerenCILCO and AmerenIP) have recently enjoyed significantly lower natural gas costs as compared to one year ago. The gas charge portion of a customer’s bill has averaged about 80 cents per therm for Ameren Illinois utility customers during January and February. By contrast, the gas charge averaged about $1.10 per therm during the same period in 2006. However, the company said its customers may receive natural gas bills that are higher than a year ago because they are using more gas this year. Temperatures have been much colder during the first two months of 2007 as compared to the same period last year. For reference, January 2007 was approximately 35% colder than January 2006. The first two weeks of February were about 60% colder than a year ago. Ameren, through its subsidiaries, serves 2.3 million electric and nearly 1 million natural gas customers in a 64,000-square-mile area of Illinois and Missouri.

Hefty litigation costs and accounting adjustments pushed Williams Cos. to a loss in the second quarter. However, with natural gas production jumping 20% from a year ago to 786 MMcf/d and a strong performance from its midstream business, the Tulsa-based gas producer and distributor raised its profit and capital expenditure guidance through 2008.

Citing some higher costs of short-term borrowings that will go away in the longer-term, Spokane, WA-based Avista Corp. last Wednesday reported lower second quarter profits, but sharply increased net income for the first half of this year, compared to similar periods last year. Avista’s CEO still expects 2006 to be a “good year.”

Hefty litigation costs and accounting adjustments pushed Williams Cos. to a loss in the second quarter. However, with natural gas production jumping 20% from a year ago to 786 MMcf/d and a strong performance from its midstream business, the Tulsa-based gas producer and distributor raised its profit and capital expenditure guidance through 2008.

In an effort to improve access and reduce connectivity costs to its electronic energy trading platform, Atlanta, GA-based IntercontinentalExchange (ICE) reported Wednesday it has opened a new telecommunications hub for the New York City metropolitan area. The company also reported that the exchange posted record Gas Oil (heating oil) volumes on Monday.

Producers may grouse about rising costs in the field, but they’re going to keep on paying, according to Lehman Brothers latest exploration and production spending survey. Worldwide E&P capital spending is forecast to grow 21.3% this year, a healthy boost from the 14.7% that Lehman projected in its December 2005 survey. The 308 companies in the survey are projected to spend $261 billion.