Loss

Las Vegas, NV-based Southwest Gas Corp. reported an unusual second-quarter net profit with net income of $3.7 million, or 9 cents/share, compared with a loss of $2.8 million, or 7 cents/share, for the same period in 2005. The second and third quarters traditionally are not profitable for the natural gas-only utility serving the mostly arid, warm weather parts of Nevada, Arizona and California’s eastern mountain/desert areas.

High demand combined with takes in excess of receipts has resulted in a loss of 140 MMcf in system linepack over the last 24 hours, El Paso said Tuesday, and its Washington Ranch storage facility was experiencing maximum withdrawals. “Scheduled pigging of the Havasu Crossover is under way, affecting access to San Juan Basin supply to the South System. The EOC [east of California] takeaway is running approximately 100 MMcf/d higher than at this time yesterday [Monday],” the pipeline said.. There is available capacity on the South System from Waha and through Guadalupe, it added. Maintenance on the San Juan Crossover and further pigging of the Havasu Crossover are scheduled for later this week, requiring that sufficient system linepack be maintained, El Paso said. A Strained Operating Condition may be declared unless the situation improves, it warned.

High demand combined with takes significantly in excess of receipts resulted in a loss of nearly 200 MMcf in system linepack over the previous 24 hours, El Paso said Tuesday. With the Washington Ranch storage facility currently at maximum withdrawals, further reductions in linepack at such rates cannot be sustained, the pipeline added. Since July 10, Washington Ranch has been in net withdrawal for all but one day, resulting in a total drawdown of more than 1.5 Bcf, it said. If customers fail to improve balancing their takes and receipts, El Paso said, it will issue a notice of Strained Operating Condition.

The holiday weekend effect of higher demand loss than usual trumped a minuscule prior-day screen gain and moderately rising power generation load as temperatures began heating up in northern market areas. The result: prices continued to fall at nearly all points Friday.

Cash prices fell by double-digit amounts at all points Wednesday as cooling demand across the southern U.S. proved unable to withstand the loss of prior-day screen support and mounting bearishness about storage.

Houston Exploration Co. late Monday blamed Hurricanes Katrina and Rita for the loss of 8-10 Bcfe of previously planned 2005 production, which is now being delayed until 2006. The Houston-based producer had relatively minor damage from the storms, but it said output at some locations remains shut in while repairs are being made to third-party onshore facilities and pipelines.

El Paso Corp.’s Tennessee Gas Pipeline said Wednesday there has been a 30% loss in natural gas supply to its system since Hurricanes Katrina and Rita struck the Gulf Coast, and by December, it expects to restore about 85% of its supply to pre-hurricane levels. Pipeline executives encouraged customers to begin arranging for firm supply this winter and to join in an industrywide effort to implement conservation measures.

Kern River Gas Transmission reported that due to SoCalGas pipeline maintenance, there will be a loss of 220 MMcf/d of receipt capacity at North Needles and Topock through Wednesday. Should total scheduled volumes exceed 1,100 MMcf for the combined points after the timely scheduled volumes are received from upstream pipelines, SoCalGas will allocate the individual receipt point capacities pro rata at North Needles and Topock based on Cycle 1 scheduled quantities, Kern noted. There will be no impact for deliveries received from Kern River at Kramer Junction.

Dwindling heating demand, energy futures weakness the day before and the loss of industrial load that typifies a weekend market all came into play as prices fell across the board Friday. Declines were remarkably consistent through virtually all geographic areas in ranging from a little more than a dime to about 30 cents.