February

A subsidiary of Dallas-based independent EXCO Resources Inc., which went public in February, signed a deal to buy Winchester Energy Co. and affiliates from Progress Energy Inc. for $1.2 billion in cash last Monday. In conjunction with the purchase, the company announced plans for an initial public offering of units in a new master limited partnership that will hold the Progress Energy assets as well as some of EXCO’s existing assets.

A subsidiary of Dallas-based independent EXCO Resources Inc., which went public in February, signed a deal to buy Winchester Energy Co. and affiliates from Progress Energy Inc. for $1.2 billion in cash on Monday. In conjunction with the purchase, the company announced plans for an initial public offering of units in a new master limited partnership that will hold the Progress Energy assets as well as some of EXCO’s existing assets.

The March aftermarket began Tuesday pretty much the same as February’s daily market ended — with sizeable losses across the board. Prospects for any significant recovery in cash prices are dim, with relatively light heating load for the foreseeable future, natural gas futures continuing to fall to levels not seen in nearly a year and abundant amounts of gas in storage — much of which must be used or go into the general market within the next month or so.

During a week in which February temperatures were in the 70s and 80s along California’s coast, Sempra Energy’s two California utilities, San Diego Gas and Electric Co. and Southern California Gas Co., on Thursday predicted lower-than-expected retail energy bills in the months ahead. On Friday, SoCalGas also announced that an additional 218,687 customers are eligible to get 20% rate discounts on their monthly natural gas bills.

While February may finally bring some cold weather, according to the latest forecasts, the natural gas futures market is still significantly overvalued, consulting firm Energy and Environmental Analysis Inc. (EEA) said in its latest Monthly Gas Update. EEA expects Henry Hub gas prices to moderate from 2005’s record high average of $8.80 and end this year at only $7.50/MMBtu. The 11-month strip of 2006 futures prices ended the day on Friday at $9.126.

Kenneth L. Lay told a Houston audience Tuesday that when he stepped down as CEO of Enron in February 2001 “he was confident that Enron was financially strong, highly profitable, growing rapidly….” Yet 10 months later the company filed for bankruptcy.

The removal of investment restrictions when the Public Utility Holding Company Act of 1935 (PUHCA) is officially repealed in February must not “become a new impetus or justification for continuing the era of adversarial relationships between the utility sector and state or federal regulators,” David Sokol, chairman of MidAmerican Energy Holdings Co., said last Tuesday. “It absolutely is past time for all of us to work together to meet tomorrow’s challenges in this sector.”

Differing greatly from the AccuWeather.com forecast from a few days ago, the National Oceanic and Atmospheric Administration (NOAA) winter outlook for December through February calls for warmer-than-normal temperatures across most of the U.S.

FERC last Wednesday agreed with an administrative law judge’s (ALJ) February 2004 finding that the allocation of production costs among the Entergy System operating companies is no longer just and reasonable, and requires the use of a bandwdith remedy to bring the costs into alignment.