Disappointing

A new study examining the potential of oil and gas production from the Arctic contains disappointing news for anyone who was counting on the region to become the next oil breadbasket for the United States.

A day after its founder and CEO announced plans to step down at the end of the year, EnCana Corp. reported a disappointing 38% drop in third quarter net earnings from continuing operations to $266 million (30 cents/share) compared to $432 (46 cents/share) in 3Q2004. Making matters even worse, the company slightly lowered its production forecast.

A day after its founder and CEO announced plans to step down at the end of the year, EnCana Corp. reported a disappointing 38% drop in third quarter net earnings from continuing operations to $266 million (30 cents/share) compared to $432 (46 cents/share) in 3Q2004. Making matters even worse, the company slightly lowered its production forecast.

Led by disappointing natural gas production by the majors, U.S. natural gas output is on a trajectory to decline 3.9% year-over-year in 2004, despite a robust 1,016 average gas rig forecast, according to a survey issued last week by Southwest Securities (SWS) of 43 top domestic producers. The survey concluded that U.S. gas production was flat sequentially and declined 4.9% versus 2Q2003.

Led by disappointing natural gas production by the majors, U.S. natural gas output is on a trajectory to decline 3.9% year-over-year in 2004, despite a robust 1,016 average gas rig forecast, according to a survey by Southwest Securities (SWS) of 43 top domestic producers. The survey concluded that U.S. gas production was flat sequentially and declined 4.9% versus 2Q2003.

Accelerating the pace of losses notched in Thursday’s disappointing (for bulls) trading session, the natural gas futures market tumbled to new two-month lows Friday as light non-commercial selling went nearly unchecked by either local traders or commercial accounts.

Despite a disappointing fourth quarter, full year operating earnings in 2001 for 39 natural gas distribution companies, including elements of larger gas and electric companies, were up 6% over 2000 on a revenue increase of 19%, according to Energy Performance Review (EPR).

Following a disappointing session Tuesday that had many bulls wondering if the party was over, natural gas futures spiked appreciably in the last 30 minutes of trading Tuesday to fill in a nagging two-month-old gap off the April daily chart. The American Gas Association’s announcement that 132 Bcf was withdrawn from storage last week spawned the usual Wednesday afternoon volatility as local and trade buying added to the short-covering seen earlier in the day from non-commercial speculative accounts. The April contract settled at $2.566, up 9.9 cents on the day.

Calling the decision “profoundly disappointing,” Nova Scotia Premier John Hamm promised to defend his province’s position that it owns most of the Laurentian sub-basin, an undersea area south of the Grand Banks that may hold huge reserves of oil and natural gas. An arbitration panel rejected Nova Scotia’s contention that its marine boundary with Newfoundland was established 37 years ago.