Knocked

Encana Corp., one of the biggest natural gas producers in North America, knocked out low prices during 1Q2012 with a solid commodity price hedging program, asset sales and joint ventures, turning the table on year-ago losses. To keep a stranglehold on declining prices, the independent also is reducing gas production through spending cuts or shut-in wells.

Recession fears that once again knocked down Wall Street on Wednesday also put downward pressure on energy futures as November natural gas dropped 13.5 cents to $6.592 and November crude shaved $4.09 to close at $74.54/bbl.

Despite trading within a slim 10-cent range, May natural gas futures on Friday knocked on the $11 door for a second consecutive session, only to be rebuffed once again. The prompt-month contract traded between $10.875 and $10.970 before closing out the day at $10.963, up 17.3 cents from Thursday and 37.6 cents higher than the previous week’s finish.

Columbia Gulf Transmission (CGT) was ramping back up on its flow volumes late last week after its Hartsville (TN) Compressor Station was knocked out of action last Tuesday night in a fiery explosion caused by one of a series of tornadoes in the South that killed at least 59 people.

Oil and gas development scored a strikeout last week as the U.S. House Appropriations Committee knocked out a proposed amendment to narrow the offshore ban on natural gas drilling and development from 50 miles off the U.S. coasts to 25 miles; added language to bill’s accompanying report calling for an additional environmental study of Alaska’s Bristol Bay area before leasing; and recommended that holders of less restrictive 1998-1999 Gulf of Mexico leases renegotiate those leases or be prohibited from bidding on new leases.

Oil and gas development scored a strikeout Thursday as the U.S. House Appropriations Committee knocked out a proposed amendment to narrow the offshore ban on natural gas drilling and development from 50 miles off U.S. coasts to 25 miles; added language to the bill’s accompanying report calling for an additional environmental study of Alaska’s Bristol Bay area before leasing; and recommended that holders of less restrictive 1998-1999 Gulf of Mexico leases renegotiate those leases or be prohibited from bidding on new leases.

Hurricanes last year knocked out a lot of natural gas and oil production for both majors and independents in the final quarter, which affected year-end output. However, four of the top U.S.-based integrated majors, Chevron Corp., ConocoPhillips, Marathon Oil Corp. and Amerada Hess Corp., along with independents Kerr-McGee Corp. and Pogo Producing Co., reported phenomenal earnings growth in 4Q2005 and full-year 2005, boosted by soaring oil and natural gas prices, which overcame all of the production losses.

Severe thunderstorms knocked out multiple natural gas processing plants near Empress, AB, on Tuesday evening, affecting several Bcf/d of processing capacity and significant production of ethane, propane and other gas liquids. TransCanada PipeLines said six processing plants and related operations lost power and suffered some damage, including plants owned by ConocoPhillips, EnCana, Atco, Inter Pipeline and BP Canada. No injuries were reported in any of the outages.

Hurricane Ivan so far has knocked out more than 55.5 Bcf of natural gas because of production shut-ins in the Gulf of Mexico (GOM), and may have at least temporarily reversed what had been a very negative price momentum in the gas market between mid-August and September, according to the latest statistics from the Minerals Management Service (MMS).