Focused

ConocoPhillips on Friday boosted its capital budget by $3.6 billion for 2006 to $10.5 billion, with 63% allocated for exploration and production (E&P). Most of the E&P budget is focused on international projects; however, about $900 million is earmarked for developments in the Lower 48 and Latin America, while $800 million will be spent in Alaska and another $800 million in Canada.

As oil and natural gas infrastructure continues to limp back to service following Hurricanes Rita and Katrina, many eyes in the natural gas industry are focused on the Henry Hub near Erath, LA, a physical delivery point that is used as a benchmark for the Nymex futures contract. The hub has been offline since Sept. 22, and no one will even speculate on when it will be back to normal (see Daily GPI, Sept. 27, Sept. 28, Oct. 6).

With all of the attention focused on crude futures on Monday as it made a run at $60/bbl, July natural gas traded within a range from $7.50 to $7.80 before settling at $7.67, down 2 cents on the day.

Dynegy Inc.’s management team last week attempted to convince investors that it was focused on future performance, but the news was overshadowed by a 76% reduction in 2004 earnings’ estimates and a projected net loss in 2005.

Junior independent Lexington Resources Inc., which is focused on natural gas exploration in the Arkoma Basin, said Wednesday it more than doubled its drillable land holdings in Oklahoma with the acquisition of 4,600 acres of coalbed methane-targeted natural gas leases. Lexington paid $125,000 toward the farm-out lease purchase of $600,000. Acreage included in the acquisition extends over an area of mutual interest of approximately 24,320 acres. The new leases encompass rights to all possible producing zones to the base of the Hartshorne Coal Formation at estimated depths of approximately 3,000 feet and include a 79.25% net revenue interest and a 100% working interest. With the latest purchase, the Las Vegas-based producer’s land position now totals drillable acreage of almost 9,000 acres.

Natural gas-focused Southwestern Energy Co. said Thursday it would increase its 2004 capital budget by 17% to fund additional drilling in its core operating areas and in new areas in the United States.

Natural gas-focused Southwestern Energy Co. said Thursday it would increase its 2004 capital budget by 17% to fund additional drilling in its core operating areas and in new areas in the United States.

Several of the leading North American-focused oil and gas producers reported strong quarterly earnings on Wednesday, with three out of four — ConocoPhillips, Amerada Hess and Kerr-McGee — up on higher commodity prices. However, even though EnCana’s earnings were off compared with a year ago, it far and away took the honors in higher natural gas production.

Four of the strongest North American-focused independents — Magnum Hunter Resources Inc., Ultra Petroleum, Nuevo Energy Co. and Talisman Energy Inc. — all saw their fourth quarter 2003 production volumes rise along with earnings. The production gains, they said, set the stage for even stronger results by the end of this year.