Especially

The 20% boost to exploration and production budgets this yearshould result in record results for offshore drilling, especiallythe Gulf of Mexico, according to drilling contractor Global MarineInc.’s annual Summary of Current Offshore Rig Economics — SCORE.In November and December 2000, GOM drilling increased 3.5%, andsoared 58.2% from a year ago. Worldwide, drilling was up 49.7% from1999.

Except for some upticks in San Juan Basin and at Northeastcitygates (especially strong in both of Transco’s Zone 6 pools),late-December swing prices stayed on a downhill slide Wednesday.Declines ranged from mildly softer to more than $2 lower atStanfield, but most were within the range of 40-70 cents.

Except for continued rises at some Northeast citygates, most ofthe cash market was in rout mode Wednesday. Price decreases of adime or more-much more in a few cases-prevailed at nearly allpoints despite cold weather blanketing much of the U.S. from theRockies eastward. A falling screen and forecasts that some areaswill be warming up this weekend constituted the main cashdepressants, sources said. Despite what one trader called a “ratherhealthy” AGA figure of 116 Bcf withdrawn from storage last week,few saw much chance of a holiday weekend rebound.

Most of the overall swing market was mildly higher Tuesday, withwestern-especially Rockies-points tending to exhibit the most pricestrength with gains of up to a dime. A few PG&E citygate quotessurpassed $3, marking the first time that area has been hit (inU.S. dollars) since Transco Zone 6-NYC topped out at $3.02 forSept. 15 flows.

“Orderly” and “quiet” are not words that typically describe thenatural gas futures market-especially during hectic expiration-daytrading at Nymex. However, yesterday they were fitting descriptionsof a market that was only able to inch higher amid light commercialshort-covering. The June contract closed out its tenure as theprompt month with a 2.6-cent gain to settle at $2.226.

While 1998 was a year of misery for most energy companies,especially producers, it was a banner year for The Coastal Corp.,which set a new earnings record. The company weathered the toughcommodity price environment so well in large part thanks to itsposition as a big gas transporter and large refiner, noted analystStuart Wagner of Petrie Parkman. Unlike Coastal, others reportingearnings yesterday suffered from not having a major pipelinebusiness to lean on for revenue.

FERC Chairman James Hoecker earlier this week gave theoft-disputing segments of the energy industry, especially naturalgas, an ultimatum: either play nice and come to agreement with theCommission on the series of major proposed rulemakings now facingthem, or the agency will pull the plug on comprehensive reviews inthe future.

Over the din of protesters, especially soon-to-be competitorNatural Gas Pipeline Co. of America (NGPL), FERC last week deniedthe majority of rehearing requests and awarded Alliance PipelineL.P. its long-awaited optional certificate to build a majortransportation link between western Canadian production fields andthe U.S. Midwest.