Mmbtu

The Energy Information Administration (EIA) is predicting that natural gas spot prices will remain in the $4.80-$5.50/MMBtu range for the rest of 2003, assuming normal weather. Natural gas wellhead prices are projected to average $4.97/Mcf for the year, an increase of about $2/Mcf over the 2002 annual average, which will be the largest annual wellhead price increase on record, EIA said in its September Short Term Energy Outlook.

The Energy Information Administration (EIA) is predicting that natural gas spot prices will remain in the $4.80-$5.50/MMBtu range for the rest of 2003, assuming normal weather. Natural gas wellhead prices are projected to average $4.97/Mcf for the year, an increase of about $2/Mcf over the 2002 annual average, which will be the largest annual wellhead price increase on record, EIA said in its September Short Term Energy Outlook.

Although gas prices are nearly $2/MMBtu lower than they were in early June and show no signs of substantially reversing course, ever-bullish analysts at Raymond James & Associates devoted their “Stat of the Week” outlook to making a case for a significant rebound in the August natural gas market. Others experts, however, aren’t buying it.

Kinder Morgan Energy Partners, LP (KMP) said it has entered into a 15-year agreement to supply Praxair Inc. with up to 90,000 MMBtu/d of natural gas from its Texas intrastate pipeline system.

Kinder Morgan Energy Partners, LP (KMP) on Tuesday entered into a 15-year agreement to supply Praxair Inc. with up to 90,000 MMBtu/d of natural gas from its Texas intrastate pipeline system.

Devon Energy said it has a costless price collar on about 655,000 MMBtu/d of its 2003 gas production with a floor price of $3.34 and a ceiling of $5.11. It also locked in a price of $2.94 for 141 MMcf/d of 2003 gas production. If the monthly gas price indices are outside of the ranges set by the floor and ceiling prices in the various collars, Devon and the counterparty to the collars will settle the difference, the company said. Any settlements will either increase or decrease Devon’s gas revenues for the period. Devon also has collared oil volumes of 54,000 b/d with an average floor price of $22.26/bbl and an average ceiling of $28.14.

Dominion Resources CFO Thomas Chewning expects natural gas prices to average between $3.10 and $3.60 over the next several years. Once the storage surplus is reduced, said Chewning, a tight supply-demand scenario will develop. “[Prices] will be above that sometimes and below that sometimes, but on average, that’s where we think it’s going be,” he told analysts at Lehman Brothers 2002 CEO Energy/Power Conference in New York City last Wednesday.

Dominion Resources CFO Thomas Chewning expects natural gas prices to average between $3.10 and $3.60 over the next several years. Once the storage surplus is reduced, said Chewning, a tight supply-demand scenario will develop. “[Prices] will be above that sometimes and below that sometimes, but on average, that’s where we think it’s going be,” he told analysts at Lehman Brothers 2002 CEO Energy/Power Conference in New York City Wednesday.

As long as high natural gas storage levels persist — now about 18% above the five year average — prices could drop to as low as $2.00-$2.25/MMBtu in the next few months, and as prices trend downward, weakness in the share prices of U.S. exploration and production (E&P) companies will persist, according to the latest oil and gas production research by Lehman Brothers analysts.