Expect

In an effort to step up the competition with brokers and EnronOnline, which some observers expect to suffer from Enron’s financial woes, the New York Mercantile Exchange (Nymex) started offering exchange of futures for swap (EFS) transactions last week as a first step in its plans to offer clearing services to the over-the-counter (OTC) natural gas market. In the first full day of EFS demand, 11,100 contracts changed hands and the exchange promptly lowered its fee for the deals to $2.50 per side from $10.

Pioneer Natural Resources and Mariner Energy announced plans to start producing up to 175 MMcf/d of gas in early 2003 from the Falcon field in the deepwater Gulf of Mexico. Gas reserves currently are estimated to range from 175 to 240 Bcfe. The Falcon field is located 100 miles east of Corpus Christi in 3,400 feet of water in East Breaks 579/623 and is among four major prospects Pioneer expects will boost its production by up to 50% over the next two years.

Pioneer Natural Resources and Mariner Energy announced plans to start producing up to 175 MMcf/d of gas in early 2003 from the Falcon field in the deepwater Gulf of Mexico. Gas reserves currently are estimated to range from 175 to 240 Bcfe. The Falcon field is located 100 miles east of Corpus Christi in 3,400 feet of water in East Breaks 579/623 and is among four major prospects Pioneer expects will boost its production by up to 50% over the next two years.

In preparation of its US$8.5 billion merger with Duke Energy (see Daily GPI, Sept. 21), Westcoast Energy Inc. announced two divestitures, including an agreement to sell its Centra Gas units to BC Gas Inc. for C$208 million and another deal worth C$176.7 million, which sends its Ontario-based Union Energy and Westcoast Capital energy services companies to the City of Edmonton’s Epcor Utilities Inc.

MDU Resources Group, the diversified utility headquartered in Bismarck, ND, said it does not expect to meet its forecasts of $2.30-2.50 per earnings share for this year, and will see “significantly” lower earnings than the predicted $2.60 in 2002 because of the volatility in natural gas prices and a downturn in the economy. Still, MDU said it would stay the course on its long-term goal of an earnings per share growth of 10-12%, as well as a projected 30% increase in combined natural gas and oil production this year.

As the moratorium on utility service terminations for low-income customers came to an end, Baltimore Gas and Electric (BGE) vowed that its customers can expect additional assistance from the utility to keep their service on. The Maryland Public Service Commission’s winter service protection was lifted on March 31, BGE said it will continue to work with customers after the deadline “We know the end of the moratorium might cause more concern for our customers already in a difficult situation,” says Frank O. Heintz, president of BGE. “We want these customers to know we will remain flexible in helping them find the best solution for their circumstances.” Customers having trouble handling their winter utility bill should call BGE at 410-685-0123.

Apache Corp. and its partner Shell Overseas Holdings Ltd. are expected to get the go ahead this week from the New Zealand High Court on whether to proceed with closing their acquisition of New Zealand-based Fletcher Challenge Energy. The partners won the overwhelming approval of Fletcher’s shareholders in a special meeting Tuesday, garnering 96% of the vote. In the deal, Houston-based Apache will acquire Fletcher’s Canadian and Argentina assets for about $630 million.

Prices tended to flatten out in most cases Thursday, and severalsources believe that barring any drastic weather changes, themarket is due for more sideways trading for at least the next fewdays.

In a new report that previews what to expect with the advent ofretail competition in the electric industry, the Texas PublicUtility Commission submitted its findings to the state’slegislature last week. Explaining the problems “some areas of thecountry,” had with deregulation, PUC reported it is convinced thatTexas’ rules will benefit the economy and “bring vibrantcompetition.”