Grew

Oklahoma City-based Chesapeake Energy Corp.’s natural gas and oil production grew at a record pace in the second quarter, 29% over a year ago and 10% sequentially, the company reported Monday. The growth is expected to be even stronger in the coming months after Chesapeake announced it would add 310 Bcfe of estimated proved reserves, 453 Bcfe of estimated probable and possible reserves and 60 MMcfe/d of production through three new acquisitions in the MidContinent and South Texas. For the second quarter, Chesapeake generated net income of $85.8 million (31 cents/per diluted common share), compared with $76.3 million (31 cents) in 2Q2003. Analysts had forecast Chesapeake would earn 29 cents/share.

Burlington Resources Inc. said its second quarter production grew 10% over a year ago, while its earnings increased 36% on higher commodity prices. The Houston-based producer reported estimated earnings of $379 million (96 cents/diluted share), compared with $278 million (69 cents) in 2Q2003. Total production in the period was 2.758 Bcfe, up from 2.502 Bcfe a year earlier.

Calgary-based Canadian Superior reported Friday that in the first quarter, year-over-year oil and gas production grew 179%, revenues were up 127% and cash flow was up 574%, soaring on significant gains in Western Canadian operations, where production averaged 2,594 boe/d.

Patina Oil & Gas Corp.’s core U.S. oil and gas production grew 38% in 2003, while Denbury Resources Inc. reported a 5% year-over-year rise in its production levels last year. Noble Energy Inc., meanwhile, reported a 2% production decline in 2003, which it attributed to the sale of some reserves and a 13 Bcfe downward revision to its Gulf of Mexico offshore estimates.

Upstream capital spending rose 13.7% worldwide in 2001, with the largest increase in Canada, according to a new report by John S. Herold Inc. Meanwhile, U.S. spending dropped $2 billion last year to $43 billion, with a 50% drop in mergers and acquisitions (M&A). Analysts said that drop in M&A may signal a greater focus and more spending on North American exploration and production (E&P) and less worldwide.

Upstream capital spending rose 13.7% worldwide in 2001, with the largest increase in Canada, according to a new report by John S. Herold Inc. Meanwhile, U.S. spending dropped $2 billion last year to $43 billion, with a 50% drop in mergers and acquisitions (M&A). Analysts said that drop in M&A may signal a greater focus and more spending on North American exploration and production (E&P) and less worldwide.

Pressure from within and outside the Senate grew last week to either defeat or bury a controversial amendment to the omnibus energy bill (S. 517) that seeks to regulate the trading of over-the-counter (OTC) energy and metals derivative transactions.

Before its sudden downfall, Enron remained at the top of the charts in energy trading and marketing, holding the lead for most of the history of NGI’s ranking of the largest gas marketing companies by volumes sold. It held that spot in the third quarter, but that soon will change, and the impact of Enron’s fall probably will reduce transaction volumes among the other top marketers in the near term, according to Ronald Barone of UBS Warburg.

Burlington Resources’ second quarter earnings spiked 145% to $231 million, or $1.10/share, while its discretionary cash flow grew 65% to $557 million on strong natural gas prices. During the quarter, the company’s gas production was basically flat at 1,945 MMcf/d. Oil production declined to 69,600 b/d from 79,300 b/d in 2Q2000. However, realized gas prices soared. Natural gas price realizations rose to $4.10/Mcf from only $2.75 in 2Q2000, while oil prices were only about a dime stronger at $24.92/bbl.