Developments

Physical gas prices for delivery Wednesday jumped on average about 8 cents Tuesday, but traders attributed it to short-term weather developments with little connection to any longer-term fundamental supply-demand shifts.

With at least two cities having passed ordinances banning hydraulic fracturing (fracking) until local rules for it can be established, state legislation has been proposed (SB 88) to reiterate that the Colorado Oil and Gas Conservation Commission (COGCC) has jurisdiction to oversee the practice by oil/gas exploration and production (E&P) companies.

A year-old, privately held California micro exploration and production (E&P) company founded by former senior executives from a predecessor Chevron Corp. company (Texaco), Pacific Energy Development Corp. (PEDCO), plans to merge with publicly held Houston-based energy services firm Blast Energy Services to form a new publicly held company headed by PEDCO CEO Frank Ingriselli.

As promised, EQT Corp. is restructuring its midstream operations to bring in more money for upstream developments in the Marcellus Shale (see Shale Daily, Nov. 1).

December natural gas closed lower Tuesday as traders elected to join a bearish feeding frenzy and saw no bullish developments on the horizon that would preclude prices working another 20 cents lower. At the closing bell December had fallen 5.4 cents to $3.404 and January had retreated 5.8 cents to $3.542. December crude oil continued its march to the century mark and posted a gain of $1.23 to $99.37/bbl.

The Pennsylvania Department of Environmental Protection (DEP) wants to ease up on the way related sources of air emissions from industrial operations, including Marcellus Shale developments, are grouped together for regulatory purposes.

A Wood Mackenzie natural gas analyst told the electric generation sector to keep a close eye on developments in the wholesale gas market, particularly noting how fast demand picks up for North American supplies.

Natural gas liquids (NGL) production from the Woodford Shale, Cana-Woodford Shale and Granite Wash, as well as NGL market developments in the Gulf Coast, have inspired ONEOK Partners LP to announce plans to spend $910 million to $1.2 billion between now and late 2013 on new liquids infrastructure.

Calgary-based Talisman Energy Inc. is selling a 50% working interest in its Farrell Creek assets in the Montney Shale to Sasol Ltd. for C$1.05 billion. As part of the deal, the partners said Monday they will weigh the market viability of converting gas to liquid fuels using Sasol’s gas-to-liquids (GTL) technology.