Hedging

In what is envisioned as a multi-year program, Washington state regulators on Tuesday issued a primer for moving toward a more robust, risk-based natural gas hedging program for the state’s four major investor-owned gas distribution utilities.

The Commodity Futures Trading Commission (CFTC) has taken action on three issues that Chairman Mark Wetjen said will have a lasting impact on energy-end users that may have fallen victim to “negative, unintended consequences” of the Dodd Frank Financial Reform Act.

“If counterparties, such as banks…begin to disappear, our ability to manage our risk would be seriously impeded,” energy companies told Federal Reserve Chairman Ben Bernanke.

In the midst of mostly stable U.S. natural gas prices and a steady boom in domestic supplies, utility gas hedging programs have come under increasing scrutiny, with regulators and consumer advocates questioning the overall costs of hedging in recent years.

Southwestern Energy Co. is producing about 400 MMcf/d in the Marcellus Shale and doesn’t foresee any constraints in moving natural gas to markets north or south for the next couple of years, executives said Friday.

Exploration and production (E&P) companies have cut their capital spending and are hedging their bets going into 2013, according to a review of 3Q2012 by energy analysts.

Exploration and production (E&P) companies have cut their capital spending and are hedging their bets going into 2013, according to a review of 3Q2012 by energy analysts.

Onshore unconventional powerhouse Devon Energy Corp. plans to spend “significantly less” on exploration in 2013, but exploration activity still will remain at 2012 levels, CEO John Richels said Wednesday.

Boosted by activity in the Marcellus Shale and Mississippian Lime, Range Resources Inc. said Thursday it has beaten its 3Q2012 forecast for natural gas and natural gas liquids (NGL) production, with output up 47% year/year (y/y) and 10% sequentially.