Investment

El Paso Corp. on Wednesday said it acquired the interest held by one of its partners, a wholly-owned subsidiary of investment banker Lehman Brothers, in a joint drilling venture, which is developing oil and natural gas properties in the Gulf of Mexico, South Texas and the ArkLaTex regions. The purchase price was reported at $62.5 million.

Hedge funds, or private investment funds, represented about 9.05% of natural gas futures trading volume in the first eight months of 2004 and 20.4% of gas futures open interest, but their market participation actually appeared to “dampen” price volatility rather than cause it or increase it, the New York Mercantile Exchange Inc. (Nymex) said Tuesday in a new 2004 Market Participants Study.

If the natural gas market is considered to be in a crisis now, or at least difficult straits, the outlook for the market ahead is anything but settling, according to a study released by Cambridge Energy Research Associates (CERA) and sponsored by Accenture last Monday.

TransCanada Power L.P. on Wednesday confirmed that it has entered into an exclusive arrangement to acquire companies that indirectly own Hydro Investment Corp., which in turn indirectly owns two hydroelectric facilities in British Columbia. The purchase price is C$162 million (including the assumption of debt) and is subject to the usual closing adjustments.

Don’t hold your breath waiting for a revised plan from EnCana Corp. on its stalled Deep Panuke natural gas project offshore Nova Scotia. After notifying provincial authorities in December it would submit a new plan in six months, EnCana now estimates it could take up to a year as it works on ways to make the offshore discovery economical. Panuke originally was estimated to hold 1 Tcf of gas and was expected to produce 400 MMcf/d.

With more than $200 million in added utility infrastructure investment in the state, Spokane, WA-based Avista Corp. filed with Idaho regulators Friday for a combined $23.7 million in rate increases to cover its electricity and natural gas utility operations serving 109,000 and 62,000 power and gas customers respectively.

Marathon Oil Corp. on Friday announced it had approved a 2004 capital, investment and exploration expenditure budget of approximately $2.26 billion, a 3.7% increase over 2003. The company spent $2.18 billion in 2003, excluding $250 million spent on acquisitions.

Reflecting what he says is a flight to quality, an investment banker last Thursday said that competition for the purchase of contracted power assets in the United States remains intense as 2003 comes to a close, while market interest in merchant power assets remains tepid, although renewable projects remain a “bright spot” in an otherwise lackluster merchant sector.

In what is becoming a popular investment vehicle for its Canadian operations, San Jose, CA-based Calpine Corp. announced recently that it is pricing an initial sale of 18.4 million trust units at C$10/unit as part of a sale of the Calpine Natural Gas Trust (CNG Trust), which will acquire selected Calpine Canadian oil/gas properties. It is expected to close Wednesday and make its first cash distribution Dec. 15.