Escalating

Appalachian-focused CNX Gas Corp. significantly upped its outlay on capital spending this year, escalating its exploration and production (E&P) budget 84% to $312 million to test the viability of some coalbed methane (CBM) plays. CNX is forecasting that its natural gas output will reach 64 Bcf in 2007, increasing by 15% in both 2008 and 2009.

Devon Energy Corp. on Friday issued a disappointing production forecast through 2009, putting most of the blame on escalating costs in Western Canada, where 70% of its output is natural gas. The Oklahoma City-based independent said it is “significantly” reducing development of its conventional gas projects in Canada “until business conditions improve.”

Devon Energy Corp. on Friday issued a disappointing production forecast through 2009, putting most of the blame on escalating costs in Western Canada, where 70% of its output is natural gas. The Oklahoma City-based independent said it is “significantly” reducing development of its conventional gas projects in Canada “until business conditions improve.”

Much is said, and often, about how escalating decline rates have cast U.S. gas producers onto an ever-accelerating treadmill. In last week’s “Stat of the Week” from Raymond James & Associates Inc., a trio of analysts pointed at decline rates with alarm and, of course, bullishness. “The treadmill is running too fast,” the analysts said, while conceding that this view is a contrarian one in some quarters.

Much is said, and often, about how escalating decline rates have cast U.S. gas producers onto an ever-accelerating treadmill. In the latest “Stat of the Week” from Raymond James & Associates Inc., a trio of analysts points at decline rates with alarm and, of course, bullishness. “The treadmill is running too fast,” the analysts say, while conceding that this view is a contrarian one in some quarters.

Squeezed by lower natural gas prices and escalating capital costs, U.S.-based exploration and production (E&P) companies likely will maintain their current level of spending or slightly pull back in 2007, energy analysts said last week.

Squeezed by lower natural gas prices and escalating capital costs, U.S.-based exploration and production (E&P) companies likely will maintain their current level of spending or slightly pull back in 2007, said energy analysts Monday.

Federal and Native American royalties did not keep pace with the escalating oil and natural gas prices between 2001 and 2005 largely because the production volumes on which royalties are based “declined substantially” during that period, according to a report issued by the Government Accountability Office (GAO) Friday. It also cited as a factor the drop-off in royalty rates due to the move away from shallow-water drilling in the Gulf of Mexico, where rates are higher, to the deepwater.

Federal and Native American royalties did not keep pace with the escalating oil and natural gas prices between 2001 and 2005 largely because the production volumes on which royalties are based “declined substantially” during that period, according to a report issued by the Government Accountability Office (GAO) Friday. It also cited as a factor the drop-off in royalty rates due to the move away from shallow-water drilling in the Gulf of Mexico, where rates are higher, to the deepwater.