Included

Devon Energy Corp. announced Wednesday that its board of directors has approved a plan to form a publicly traded master limited partnership (MLP) that will own a minority interest in Devon’s U.S. onshore marketing and midstream business, including natural gas gathering and processing assets in Texas, Oklahoma, Wyoming and Montana.

The Energy Information Administration (EIA) reported Thursday morning that a bearish 106 Bcf — which included a 10 Bcf reclassification from base to working gas — was injected into underground natural gas storage for the week ended July 6. As a result, the natural gas futures market moved lower once again, recording a low of $6.330 before closing at $6.497, down 10.3 cents on the day.

With production from conventional gas fields declining across North America, gas shales are poised to increase their contribution to the nation’s gas supply. There are approximately 40,000 producing wells and fewer than two-dozen significant gas shale plays in the United States today, but the one that could potentially provide the biggest payoff –the Conasauga play — is still a largely unknown quantity.

BP Energy Co.’s ability to market natural gas in the western United States has improved with the completion of its acquisition of Salt Lake City-based marketer Wasatch Energy LLC. The acquisition was announced in December (see NGI, Dec. 25, 2006). The deal, for an undisclosed amount, gives BP Energy all of Wasatch’s natural gas business and assets, including commercial and industrial sales contracts and producer services contracts. Wasatch’s 42 employees also were offered the opportunity to transfer to BP Energy. Wasatch has a portfolio of 350,000 MMBtu/d of gas purchase, transportation and sales activity across 10 western states that serve about 500 commercial and industrial customers and 100 producers. Its sales offices are located in New Mexico, Colorado, Washington, and California.

Nymex Holdings Inc., the parent company of the New York Mercantile Exchange Inc. (Nymex), said Tuesday that average daily volume for the first quarter 2007 was 1.512 million contracts per day, a 40% increase from the same period a year ago. Total volume was 92.210 million contracts for the first quarter. Nymex reported that volume of its contracts on the Chicago Mercantile Exchange’s (CME) Globex electronic trading platform for the first quarter 2007 was 597,000 contracts per day and represented a 485% increase over the first quarter 2006 electronic volume on Nymex Access, which Globex ended up replacing. As another indicator that volume is migrating from the floor to Globex, Nymex floor-traded average daily volume was 330,000 contracts per day, a decrease of 39% from the first quarter 2006. March highlights for the company included average daily volume of 1.372 million contracts per day, a 44% increase from 956,000 per day in the same period of 2006. Nymex electronic volume during the month on the CME Globex electronic trading platform was 567,000 contracts per day and represented a 473% increase over the March 2006 electronic volume on Nymex Access. Nymex floor volume averaged 267,000 contracts per day, a decrease of 46% from March 2006.

The tax relief legislation that President Bush signed last Wednesday to open the eastern Gulf of Mexico to drilling also included a permanent ban on all future oil and gas drilling in Montana’s Rocky Mountain Front Range.

Adding to a busy week for the New York Mercantile Exchange (Nymex) that included new product offerings (see Daily GPI, Dec. 21) and accusations of merger interference (see Daily GPI, Dec. 22), as well as grumblings surrounding its scaled-down 2007 holiday schedule (see Daily GPI, Dec.21), the exchange reported Thursday that it will launch its first energy index futures contract, 3-2-1 Plus as part of the Nymex iPort suite of index futures contracts beginning on Jan. 21 for trade date Jan. 22.

A Gulf Coast producer couldn’t pinpoint any single factor behind a major price rebound Tuesday that included spikes of a dollar or more at a few Northeast citygates, but said it more likely was related to a combination of several relatively minor things. However, a marketer in the Lower Midwest saw one overriding reason for the sharp increases: more power generation load.

A top official with the U.S. Department of Energy (DOE) has told federal lawmakers that the Bush Administration opposes a provision included in a Coast Guard reauthorization bill conference report that threatens to scuttle Cape Wind’s proposed 420 MW wind farm offshore Cape Cod.