Indicates

The 54th Reed-Hycalog Rig Census on the U.S. land drilling market indicates that for the first time in years natural gas supply is beginning to outweigh demand, Raymond James & Associates said Monday.

Forecasted weather for the next few days indicates colder than normal temperatures in the Front Range of Colorado, CIG said. With the Fort Morgan Storage Field in Morgan County, CO, shut in due to a well leak (see Daily GPI, Oct. 25), the pipeline has its storage withdrawal capability reduced by about 51%. Storage customers have 49% of their ADWQ (Average Daily Withdrawal Quantity) available until further notice and should adjust flowing supplies to ensure that withdrawals remain at or below their revised contractual limits, CIG said. Additionally, CIG will not be able to approve payback nominations from the pipeline. A spokesman said Thursday the number of area families evacuated due to the leak had risen to 13, and some (but not all yet) were being allowed to return to their homes on a case-by-case basis. There is no projection for when repairs to the well will be completed and service restored at the Fort Morgan field, he said.

Despite the volatility in natural gas prices, Raymond James’ mid-2006 exploration and production (E&P) capital expenditure survey indicates North American producers’ total spending in 2006, which includes exploration and development (E&D), acquisitions and stock buybacks, should jump 10-15%.

A field-by-field analysis of global oil production and development indicates the world is not running out of energy in the near- or medium-term, with a boost in unconventional supplies — condensate, gas-to-liquids (GTL), natural gas liquids (NGL) and oil sands — expanding hydrocarbon capacity by as much as 25% over the next decade, according to a forecast by Cambridge Energy Research Associates (CERA). In North America, U.S. capacity is expected to decline, but Canada will gain with the expansion of its unconventional sources.

Expansion of the U.S. natural gas pipeline grid slowed substantially in 2004 with only 7.7 Bcf/d of capacity added, but the current inventory of proposed projects indicates that major growth will take place between 2005 and 2007, with potentially as much as 44.4 Bcf/d of new capacity added to the national network, the Energy Information Administration (EIA) said Tuesday in a new report.

In its nearly two years of operation the U.S. portion of North Baja Pipeline has lost money so far, principally because one of its early subscribers defaulted and the capacity hasn’t been re-sold. This information was revealed in a FERC filing by Gas Transmission Northwest (GTN), the national gas pipeline portion of the former PG&E Corp. merchant energy unit that is now undergoing Chapter 11 reorganization. GTN is in the process of being sold to TransCanada.

A survey of 47 gas producers indicates that second quarter domestic gas production fell 3.8% compared to second quarter 2003 levels and was down 0.6% from the first quarter 2004, according to analysts at Raymond James & Associates. Sharp declines among the majors and utility companies were only partially offset by production increases by the independents, the analysts said.

A survey of 47 gas producers indicates that second quarter domestic gas production fell 3.8% compared to second quarter 2003 levels and was down 0.6% from the first quarter 2004, according to analysts at Raymond James & Associates. Sharp declines among the majors and utility companies were only partially offset by production increases by the independents, the analysts said.

A survey of many exploration and production companies by Lehman Brothers indicates that E&P spending next year will be flat to down slightly in the United States and Canada but up about 6.1% internationally as the majors continue to look overseas. Worldwide E&P spending, based on a survey of 335 companies, is expected to grow 4% to $144.3 billion, the survey found.