Forecasting

In several different segments of the energy industry, California is forecasting smaller natural gas loads for electricity generation in the years to come.

Devon Energy Corp., the largest U.S.-based independent, is forecasting production will grow in 2004 by 4-6%, even though it has put its prolific Cherokee coalbed methane (CBM) field up for sale. The Oklahoma City-based producer, one of the most active in CBM, said the Arkoma Basin field, which holds an estimated 22 MMboe in reserves, is no longer considered a core asset because of recent acquisitions.

Forecasting another strong storage refill total for this week despite Hurricane Claudette’s shut-ins, Stephen Smith Energy Associates sees the natural gas storage deficit continuing to drop and pressures continuing to move prices down.

Energy analysts Douglas-Westwood are forecasting that over the next five years, North America’s offshore will see more spending on wells than any other region worldwide. The London-based firm reported Friday that worldwide, there will be 14,626 offshore wells at a total cost of nearly $170 billion in the period.

For the next three months, forecaster WSI Corp. is forecasting cooler-than-normal temperatures in the central and southern Rockies, central and southern Plains and Pacific Northwest.Warmer-than-normal temperatures are expected in California and Nevada, the northern Rockies and Plains, as well as all areas east of the Mississippi River.

For the next three months, forecaster WSI Corp. is forecasting cooler-than-normal temperatures in the central and southern Rockies, central and southern Plains and Pacific Northwest.Warmer-than-normal temperatures are expected in California and Nevada, the northern Rockies and Plains, as well as all areas east of the Mississippi River.

In its latest seasonal update for June to August, WSI Corp. is forecasting a relatively strong cooling demand in the Northeast and Southwest, which raises the possibility of electricity-driven price support at key regional gas hubs this summer. Although cooler temperatures in the Pacific Northwest and Southeast should free up power for export to neighboring regions, WSI said, “constrained areas with limited generating and import capacity, such as New York City, Long Island and southwest Connecticut, remain vulnerable to heat-driven price spikes.”

Forecasting exploration and production companies’ stock price performance can be a real headache because it can’t be done by traditional means. According to a new Lehman Brother’s report, it turns out that the key determinants of large and small E&P company share price performance are per share growth in reserves, production and cash flow, rather than historical accounting measures, such as earnings and returns on capital.

Forecasting exploration and production companies’ stock price performance can be a real headache because it can’t be done by traditional means. According to a new Lehman Brother’s report, it turns out that the key determinants of large and small E&P company share price performance are per share growth in reserves, production and cash flow, rather than historical accounting measures, such as earnings and returns on capital.