Learning

Shale plays globally are a very good long-term asset and the continuing hype about the under-explored Monterey Shale in California is worthy of most of the superlatives, according to two analysts at Wood Mackenzie’s Houston office.

Setbacks in several production regions, including the Bakken Shale, resulted in an overall decline in Hess Corp.’s 2Q2011 daily output, but those setbacks were mostly short-term, and the company was able to post a 62% earnings increase compared with 2Q2010.

Operators have the tools today to tap into unconventional natural gas and oil reservoirs at a more efficient and more productive pace but the technologic advances have only scratched the rock’s surface, a Schlumberger Ltd. executive said earlier this month.

In reaction to the arrival of the much-anticipated blast of cold air in the eastern half of the country, natural gas futures rocketed higher Wednesday as early short-covering by funds and commercials triggered waves of buy-stop-loss orders. By virtue of its $5.50 high trade, February notched a new all-time contract top and traded within 3 cents of the 21-month prompt-month high made by the January contract on Dec. 13. It closed at $5.43, up 32.3 cents for the session.

It’s not nice to fool the investing public — energy companies and their auditors are learning as Enron’s collapse continues to spark a tidal wave of investigations, recriminations and falling stock prices. Not only the companies are under attack but also the investment analysts who follow them and even the watchdog Securities and Exchange Commission (SEC) itself is coming under fire for a “failure of leadership,” for abdicating its responsibility to set strict financial reporting standards.

It’s not nice to fool the investing public — energy companies and their auditors are learning as Enron’s collapse continues to spark a tidal wave of investigations, recriminations and falling stock prices. Not only the companies are under attack but also the investment analysts who follow them and even the watchdog Securities and Exchange Commission (SEC) itself is coming under fire for a “failure of leadership,” for abdicating its responsibility to set strict financial reporting standards.

California is learning the hard way that yet another earlyoffshoot of more competitive energy markets is the arcane world oftrying to police the activities between state-regulated utilitiesand their unregulated affiliates operating in the gas and electricmarkets. Nearing the end of its first year of dealing with thisissue, California is experiencing, at best, an uneasy peace betweenstate regulators and the state’s three major investor-owned utilityholding companies.

California is learning the hard way that yet another earlyoffshoot of more competitive energy markets is the arcane world oftrying to police the activities between state-regulated utilitiesand their unregulated affiliates. Nearing the end of its first yearof dealing with this issue, California is experiencing, at best, anuneasy peace between state regulators and the state’s three majorinvestor-owned utility holding companies.