Gustav

Publicly traded U.S. natural gas producers continued to show gains in 4Q2008, boosting output by 3.5% year/year (y/y), despite disruptions from hurricanes Gustav and Ike, a survey by Raymond James & Associates Inc. has found.

Almost a quarter of Apache Corp.’s gross oil and natural gas production remains off-line in the Gulf of Mexico (GOM), five months after hurricanes Ike and Gustav struck the Gulf Coast, the company’s CEO said Thursday.

Almost a quarter of Apache Corp.’s gross oil and natural gas production remains off-line in the Gulf of Mexico (GOM), five months after hurricanes Ike and Gustav struck the Gulf Coast, the company’s CEO said Thursday.

Ongoing repairs from hurricanes Ike and Gustav last September continued to hammer Stone Energy’s production at year’s end, the company said late Monday. However, Stone still managed to increase its estimated year-end 2008 proved reserves to 519 Bcfe, well ahead of the 403 Bcfe at year-end 2007.

In its final assessment of destroyed and damaged facilities in this past summer’s hurricanes Gustav and Ike, the Minerals Management Service (MMS) Gulf of Mexico (GOM) staff estimated that 2,127 production platforms were exposed to winds that were higher than 74 mph.

In its final assessment of destroyed and damaged facilities from hurricanes Gustav and Ike, the Minerals Management Service (MMS) Gulf of Mexico (GOM) staff estimated that 2,127 production platforms were exposed to winds that were higher than 74 mph. MMS, which coordinated its assessment with oil and natural gas operators, noted that as of August, there were more than 3,800 production platforms in the GOM; these structures range in size from single well caissons in water depths of 10 feet to a large complex facility in water depth more than 7,000 feet. Final results of the assessment indicate that 60 platforms were destroyed as a result of the two hurricanes. The destroyed platforms produced 13,657 b/d of oil and 96.5 MMcf/d of gas, or around 1.05% of the oil and 1.3% of the gas produced daily in the offshore. MMS also confirmed that 31 platforms with extensive damage may take three to six months to repair. In addition, 93 platforms suffered moderate damage, which may take one to three months to repair. Information on the assessment is available at www.mms.gov.

The cash market decided to ignore the slow pace of offshore production recovery from the one-two punch of hurricanes Gustav and Ike and instead focused on the overall lack of weather-based demand for those missing supplies Friday. Abetted by the previous day’s 28.9-cent decline in October futures and the weekend dropoff of industrial load, the weakness of weather fundamentals drove all but a few Texas points lower. Just as there were quite a few triple-digit increases on Thursday, several points saw drops of about a dollar or more Friday.

Initial expectations of a rapid return of Gulf of Mexico (GOM) oil and gas production from the outages caused by hurricanes Gustav and Ike appeared to be overly optimistic by Wednesday, and both the cash and futures markets were firmer in response. And although substantial cooling load is still subpar for mid-September in most areas, some slightly premature heating load is arriving to displace it, especially in the Northeast.

As it became more evident Wednesday that Hurricane Gustav left the energy infrastructure in the Gulf of Mexico intact (see related story), October natural gas futures continued to press the downside, coming within a couple of pennies of breaking below $7. The prompt-month contract recorded a low of $7.028 before rebounding to close out Wednesday’s regular session at $7.264, up less than a penny from Tuesday’s finish.