Noting

Houston-based Falcon Gas Storage Co. Inc. began operations this week at its Worsham-Steed Gas Storage Facility near Dallas, noting that increased production, reduced demand on the Lone Star and TXU Fuels pipeline systems,and maintenance work on the Natural Gas Pipeline of America (NGPL) Bridgeport Lateral has caused a glut of gas in the region.

Noting that its objective is to focus on North Texas as its core area of development, Empire Energy Corp. on Wednesday signed a letter of agreement to purchase, for an undisclosed amount of cash and stock, additional oil and gas interests in the Fort Worth Basin of North Central Texas. It already owns a 50% working interest in production acreage of the Old World Prospect in Parker County, and will purchase the remaining 50% along with a 100% interest in three other properties in the same area. Empire also will take over as lease operator.

Noting that at the end of August it had experienced significant long imbalances after posting the final cash-out index, Sonat said Wednesday that “similar economic conditions exist this month.” Shipper were advised to monitor the bulletin board for possible issuance of a Type 6 OFO for the weekend if flowing supply levels and demand cause Sonat to exceed its maximum storage injection capability.

Noting that the advent of rolling blackouts constitute a threat to the state’s health and welfare, California’s two top legislative leaders Tuesday filed a suit against the Federal Energy Regulatory Commission in the Ninth Circuit U.S. Court of Appeals, requesting the court to order the federal regulators to provide just and reasonable wholesale electricity rates.

Noting the mild temperatures across the country, favorable arbitrage spreads and “ambitious distributor refills,” the industry continues to “inject a significant amount of natural gas into storage,” said UBS Warburg analyst Ronald Barone last week in his weekly research note. Even though national supplies now stand at 958 Bcf versus 1,117 Bcf a year ago, Barone said he expects to see the storage deficit drop and perhaps post a surplus by this summer.

Noting the mild temperatures across the country, favorable arbitrage spreads and “ambitious distributor refills,” the industry continues to “inject a significant amount of natural gas into storage,” said UBS Warburg analyst Ronald Barone last week in his weekly research note. Even though national supplies now stand at 958 Bcf versus 1,117 Bcf a year ago, Barone said he expects to see the storage deficit drop and perhaps post a surplus by this summer.

Noting it had advised shippers earlier in the week about high linepack problems due to overproduction, reduced demand and limited storage injection capacity, Tennessee said Wednesday a systemwide OFO Balancing Alert will take effect with today’s gas day. Positive daily imbalances that exceed 2% (or 500 dekatherms, whichever is greater) over nominated volumes will be charged $15 plus an index price for each dekatherm outside of the designated tolerance. Penalties will not apply to negative imbalances. The OFO is expected to remain in effect until testing of the Bear Creek Storage Field is completed May 1. Tennessee also said that based on current and anticipated future conditions, its ban on 500 Leg receipts with a dew point higher than 20 degrees F. and without proof of processing will remain in effect through the end of May.

It doesn’t happen very often, so we’re noting an apparentlyspontaneous comment from Dynegy Counsel Ed Ross at a FERCRoundtable last week that one of his chief competitors, Enron, “hasdone an excellent job of being competitive.” He suggested otherscould look to Enron as a “model competitor. They’ve done a verygood job of setting up a strong financial desk and a strongphysical desk and we don’t see any problem with it. I think theyhave set up their books in a way that they truly have separationbetween the regulated and unregulated aspects of their business.”

It doesn’t happen very often, so we’re noting an apparentlyspontaneous comment from Dynegy Counsel Ed Ross at a FERCRoundtable last week that one of his chief competitors, Enron, “hasdone an excellent job of being competitive.” He suggested otherscould look to Enron as a “model competitor. They’ve done a verygood job of setting up a strong financial desk and a strongphysical desk and we don’t see any problem with it. I think theyhave set up their books in a way that they truly have separationbetween the regulated and unregulated aspects of their business.”