Morning

Despite the intensification of Isidore to a category 2 hurricane Friday morning, natural gas futures shuffled lower throughout the session as traders liquidated long positions acquired during last week’s 50-cent price spike. At $3.758, the October contract was down nearly 20 cents from Thursday’s high and 9.8 cents lower on the day, but still 29.1 cents higher for the week. Volume was heavy for a Friday, with an estimated 97,137 contracts changing hands.

corrected 9/13/02

The Western Gulf of Mexico Lease Sale 184, scheduled for Wednesday morning by the Minerals Management Service (MMS), has received 391 bids on 323 tracts from 40 companies, MMS said. Of the bids, 271 tracts received single bids; 39 received two bids; 10 received three bids; and three others had four bids each. Kerr-McGee submitted 54 bids.

September natural gas futures spiked all the way up to $2.80 from $2.67 in about five minutes Thursday morning after the Energy Information Administration (EIA) reported a 33 Bcf storage injection, which was well below most expectations (centered on 45-50 Bcf). EIA also issued a downward revision for its data from the previous week. Despite the bullish news, however, the September contract managed only an 8.5-cent gain for the day and closed at Tuesday’s high of $2.745, leaving some observers unconvinced that the downtrend is over. October gained 8 cents, ending the day at $2.784 and the winter strip rose 5.7 cents to $3.46.

Aquila, Inc. shares plummeted another 14% Tuesday morning to $14.85/share on the news that it plans to buy Cogentrix Energy Inc., a large independent power producer (IPP) with 3,496 MW of generation, for $415 million in stock and equity-linked securities, as well as the assumption of $355 million of recourse debt and $770 million of non-recourse project-level debt. Aquila shares rebounded slightly following a positive conference call, in which company management vowed to sell $500 million in assets and stop all merger and acquisition activity for the rest of this year. ILA shares still were down 6% at the end of the day to $16.04.

Nicor Inc. saw its stock price nearly cut in half Friday morning after reporting a slew of bad news, some of which also spilled over on Dynegy Inc., a joint venture partner. Nicor, long considered a stable old-line utility investment, stunned the market by reversing all of its first quarter earnings and excluding all of its second quarter earnings for a rate program used by subsidiary Nicor Gas, which contributed to a 36% drop in second quarter earnings. The board of directors in turn moved into action, appointing a special, independent committee to investigate the subsidiary’s natural gas purchases, sales, transportation and storage.

Nicor Inc. saw its stock price nearly cut in half Friday morning after reporting a slew of bad news, some of which also spilled over on Dynegy Inc., a joint venture partner. Nicor, long considered a stable old-line utility investment, stunned the market by reversing all of its first quarter earnings and excluding all of its second quarter earnings for a rate program used by subsidiary Nicor Gas, which contributed to a 36% drop in second quarter earnings. The board of directors in turn moved into action, appointing a special, independent committee to investigate the subsidiary’s natural gas purchases, sales, transportation and storage.

Nicor Inc. saw its stock price nearly cut in half Friday morning after reporting a slew of bad news, some of which also spilled over on Dynegy Inc., a joint venture partner. Nicor, long considered a stable old-line utility investment, stunned the market by reversing all of its first quarter earnings and excluding all of its second quarter earnings for a rate program used by subsidiary Nicor Gas, which contributed to a 36% drop in second quarter earnings. The board of directors in turn moved into action, appointing a special, independent committee to investigate the subsidiary’s natural gas purchases, sales, transportation and storage.

Rowan Companies Inc., El Paso Oil & Gas Canada Inc. and Canadian Superior Energy Inc. said Thursday morning that they have contracted the Rowan Gorilla V for the initial drilling of El Paso’s and Canadian Superior’s Marquis Natural Gas Project offshore Nova Scotia. In February, Canadian Superior said the Marquis prospect is targeting up to 2 Tcf reserves (see Daily GPI, Feb. 22). The site is located about 100 miles offshore.