Declines

Coming as no surprise due to the recent announcements that exploration and production companies are slashing their drilling budgets because of unfavorable natural gas commodity prices, Houston-based offshore drilling contractor Global Marine reported that its worldwide Summary of Current Offshore Rig Economics (SCORE) for September 2001 decreased by 4.3% from August 2001.

Coming as no surprise due to the recent announcements that exploration and production companies are slashing their drilling prospects because of unfavorable natural gas commodity prices, Houston-based offshore drilling contractor Global Marine reported that its worldwide Summary of Current Offshore Rig Economics (SCORE) for September 2001 decreased by 4.3% from the previous month.

Due to spiraling commodity prices, which have led to a drop in Devon Energy Corp.’s stock price, Devon and Mitchell Energy & Development Corp. said Friday that the board of directors of each company has amended their merger agreement to address certain risks posed by Devon’s falling stock price. The amendment would provide for an alternate structure to mitigate the risks in the event the stock price would prevent the issuance of certain tax opinions, which are a condition to the merger transaction.

Despite recent declines in rig utilization because of sharply lower natural gas prices, Schlumberger Reed-Hycalog’s annual rig census shows that U.S. drilling rig utilization has jumped this year to a 20-year high. High commodity prices over the past year have caused the activity level of the expanded fleet to push utilization to 93%, a level not seen since the early 1980s.

Despite recent declines in rig utilization because of sharply lower natural gas prices, Schlumberger Reed-Hycalog’s annual rig census shows that U.S. drilling rig utilization has jumped this year to a 20-year high. High commodity prices over the past year have caused the activity level of the expanded fleet to push utilization to 93%, a level not seen since the early 1980s.

The moderately softening status quo remained in effect for the cash market Thursday. Declines of about a dime or less prevailed at most points, although double-digit moves were reported for the Rockies/Pacific Northwest region. The smallest drops of less than a nickel were concentrated at cool Northeast citygates.

Prices continued to sink Friday, but by significantly smaller amounts than the day before. Declines mostly ranged between a nickel and 15 cents, but were larger in California largely due to milder weather in the state. A majority of the price drops were in the vicinity of a dime.

Most eastern markets drifted mildly lower Monday, with most declines in single digits and only a few barely surpassing a dime. The West tended to range from flat to moderately higher in the Rockies and Southwest basins, accompanied by larger California gains. It wasn’t that the West was so strong, sources said, but rather that the region was climbing back out of the deep price holes it had dug for itself Friday.

Many energy stocks experienced another day of declines yesterday in reaction to FERC’s western power price mitigation order, while the stocks of some generators, marketers and utilities rebounded slightly as investment bankers attempted to put a positive spin on the expected impact of the order. Reliant fell 1.3% to $33.35. AES lost 51 cents to close at $42. El Paso was down 1.2% to $54.72, and Dynegy was down 33 cents to $44.05. But Williams gained a nickel to end the day at $35.21 and Enron rebounded from a new 52-week low to close out at $46.18, up $1.48.