Heavy

Linn Energy LLC is spending $454 million in separate transactions to acquire a leasehold in the Texas Panhandle and to enrich its natural gas-heavy assets in the Appalachian Basin. The acquisitions together increase the limited partnership’s total proved reserves by 57%, with the addition of more than 355 Bcfe to its proved reserve base and an increase in production of more than 38 MMcfe/d.

ConocoPhillips has slashed its capital budget for 2007, and it warned that if service costs continue to escalate, its medium-term oil and natural gas production likely will be impacted.

In a “very significant step change” that will double its natural gas-heavy reserves, Houston-based independent Edge Petroleum Corp. has obtained a package of wells, natural gas pipelines and related infrastructure mostly located in its core South Texas holdings for $320 million cash. Together, the wells are producing at a rate of 31 MMcfe/d, of which about 86% is gas.

In a “very significant step-change” that will double its natural gas-heavy reserves, Houston-based independent Edge Petroleum Corp. has obtained a package of wells, natural gas pipelines and related infrastructure, mostly located in its core area of South Texas, for $320 million cash. Together, the wells are producing at a rate of 31 MMcfe/d, of which about 86% is gas.

Without much new information to trigger a significant change, April natural gas futures gapped lower at the opening bell to $6.740 in response to the continuing heavy storage inventory situation, but then managed a slow climb throughout the day Tuesday to end up 3.3 cents at $6.868. April crude seemed to move almost in lockstep, initially dipping to $59.60 but then ending the day up 15 cents at $60.57/bbl.

The continuance of heavy heating load and a major prior-day screen spike were sufficient to propel prices further upward at most points Friday. However, prospects for a bit of moderation in cold weather in several areas, the typical slump of industrial demand over a weekend and the easing or lifting of OFOs and similar pipeline constraints (see Transportation Notes) allowed a few instances of flat or softer numbers to remain in the market.

Cheniere Energy brought in two heavy hitters during the last week to help target liquefied natural gas (LNG) suppliers worldwide for about 5.9 Bcf/d of LNG sendout capacity that Cheniere plans to manage at its three 100%-owned import terminals along the Gulf Coast.

While it continues to face challenges and criticism from the financial community for its continuing losses and relatively heavy debt load, San Jose, CA-based Calpine Corp. sees the wholesale power market turning around in key areas and is determined to play a role in importing liquefied natural gas (LNG) along the West Coast of North America, according to the CEO Peter Cartwright.

It was deja vu all over again, as Hurricane Rita slowly churned into the southeastern Gulf of Mexico as a Category Two storm after dumping heavy rain in the Florida Keys on Tuesday. The storm is expected to intensify into a Category Three and its center was projected to reach the middle of the production area off Texas sometime Friday. In preparation, energy companies were stepping up offshore evacuations.