Dropped

The share price for Aquila, Inc. common stock dropped 74 cents or 24% to $2.34 after the company announced Monday a public offering of 40 million shares of its common stock, and 12 million of premium income equity securities (PIES). The PIES represent $300,000,000 aggregate principal amount of convertible senior notes, which will mandatorily convert into common stock no later than Sept. 15, 2007.

Stopping the rally from last week at least temporarily, August natural gas futures on its way towards expiration dropped 17.7 cents on Monday to close at $5.957. The drop almost erased last Thursday’s 22.1-cent rally, which was sparked by the first bullish natural gas storage report in many weeks (see Daily GPI, July 23).

Continuing the downward momentum from Friday, the July natural gas futures contract dropped 18.1 cents on Monday to close at $6.339. Rumors of a break from trading with crude futures appeared false for the time being, as July crude fell as well, closing $1.12 lower on the day at $37.63.

Three analyst groups have concluded that quarterly U.S. natural gas production dropped between 4.9-5.3% compared with a year ago, led by a sharp decline among the majors. The quarterly figures, said Lehman Brothers’ analyst Thomas Driscoll, are “both surprising and disappointing given drilling activity,” because “industry appears unable to ‘drill its way out’ of gas market tightness.”

Ohio-based FirstEnergy Corp. and the utility’s reliability coordinator, the East Central Area Reliability Council (ECAR), failed to assess and understand the inadequacies of FirstEnergy’s system, particularly with respect to voltage instability and the vulnerability of the Cleveland-Akron area, and FirstEnergy did not operate its system with appropriate voltage criteria, a final report issued last week by a joint U.S.-Canada task force examining the historic Aug. 14, 2003 blackout concludes.

Royal Dutch/Shell Group has dropped its position that it acted in “good faith” with the Securities and Exchange Commission (SEC) following news that the former chairman may have known about the overbooking of oil and gas reserves as long as two years ago.

Marathon Oil Corp. has dropped its plans to build a liquefied natural gas (LNG) terminal in Baja California after Mexican authorities took back the leases for the site the company was considering.

Canadian natural gas production dropped for the second consecutive year in 2003, confirming widespread industry and government expectations that it will contribute to tight supplies and high prices across North America.

While overall natural gas imports into the United States dropped slightly in the first half of the year, imports of liquefied natural gas (LNG) more than doubled during the period, according to figures released by the Department of Energy (DOE) Thursday.