British energy giant BP said Tuesday it expects to report a decline in fourth-quarter earnings because of weaker-than-expected performance by its refining and marketing division. The news came a day after BP announced $1.3 billion in asset sales in the North Sea and the Gulf of Mexico. In a brief interim update on fourth quarter financial and operating statistics, BP said U.S. gas price realizations are expected to rise slightly ahead of the change in Henry Hub prices. However, the overall refining, marketing and trading environment deteriorated relative to the third quarter of 2002. Liquids realizations are expected to be broadly in line with last quarter. But chemicals margins are expected to weaken as prices lagged the rise in feedstock costs. Demand remains sluggish, BP said. Hydrocarbon production is expected to be up about 3% and 1.5% for the full year and 4Q, respectively, compared with 2001. North American NGL margins are expected to be slightly lower than in the third quarter. Retail margins are expected to be down from 3Q02 due to seasonal declines compounded by significant crude price increases at year-end. All these financial data, however, are subject to change and may differ considerably from the final numbers that will be reported on Feb.11, BP said.
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Articles from Decline
Consultant: Wellhead Deliverability in Decline; Prices Poised for Large Increases
Natural gas wellhead deliverability is weaker than many observers realize, and the natural gas futures strip is undervalued, according to Kevin Petak, director at Arlington, VA-based consulting firm Energy and Environmental Analysis Inc. (EEA). Petak believes $5 Henry Hub gas prices will arrive very soon — most likely in January or February — and prices should average $5.35 next year.
Consultant: Wellhead Deliverability in Decline; Prices Poised for Large Increases
Natural gas wellhead deliverability is weaker than many observers realize and the natural gas futures strip is undervalued, according to Kevin Petak, director at Arlington, VA-based consulting firm Energy and Environmental Analysis Inc. (EEA).
Cash Falls on Weekend Demand Decline, Despite Futures Rally
Cash prices moved sharply lower on Friday for the Columbus Day weekend despite the surprisingly rapid rise in the natural gas futures market. While November futures ended the day up more than 30 cents, mild weekend weather and weak demand left cash with nowhere to go but down. Most points tumbled 10-20 cents, which put many locations back down near bidweek levels.
PNM Slashes 2002 Earnings Estimate on Power Sales Decline
Following through on earnings-related warnings it issued this spring, PNM Resources last Tuesday said continued weakness in the wholesale power market has caused the utility to drastically drop its 2002 earnings estimate from $3.00 per share to between $1.90 to $2.10 per share. In order to rein in expenses, the Albuquerque, NM-based company is taking the hatchet to its construction expenditure plans for this year by slashing its planned budget in this area by $111 million.
Counterparty Risk Key Following Credit Downgrades
The current decline in market liquidity is an unfortunate but inevitable consequence of the energy trading and accounting scandals that have arisen since the fall of the house of Enron. Sources in all market areas report seeing a gradual shrinking of liquidity as their risk management officials put various counterparties off-limits due to questions about their creditworthiness or reputation.
PG&E Reports Continued Sharp Decline in Gas Prices
For a third straight month, Pacific Gas and Electric Co., San Francisco, reported Thursday that natural gas prices have settled into their “historical averages,” as the utility’s retail natural gas prices through the end of March this year are about 60% below last year’s record levels. In March, the PG&E utility announced that the average residential bill for natural gas will be $39.23, a 59% drop from March 2001 when the average residential bill was $95.06.
Futures Shift Lower Then Rebound Following AGA Revision
In what might be its most bullish four-cent decline in recent memory, natural gas futures rebounded late in the session Wednesday as traders were able to look past a double helping of bearish storage news to bid up prices in the closing 20 minutes of trading. With its $2.813 closing price, the December contract was 3.9 cents lower for the session, but an impressive 7 cents above its low for the session.
Global Marine Sees Gulf Drilling, Dayrates Dropping Sharply
A sharp decline in shallow drilling in the Gulf of Mexico and declining rig dayrates led to a 3.1% drop in Global Marine’s worldwide SCORE report, or Summary of Current Offshore Rig Economics, for October 2001 from the September SCORE. The SCORE for the Gulf of Mexico plummeted 16% and is down 13.7% from last October and 33.2% from the five-year average
Global Marine Sees Gulf Drilling, Dayrates Dropping Sharply
A sharp decline in shallow drilling in the Gulf of Mexico and declining rig dayrates led to a 3.1% drop in Global Marine’s worldwide SCORE report, or Summary of Current Offshore Rig Economics, for October 2001 from the September SCORE. The SCORE for the Gulf of Mexico plummeted 16% and is down 13.7% from last October and 33.2% from the five-year average
