Otherwise

As they often are, Northeast citygates were conspicuous in an otherwise close to flat market Tuesday by giving back much of the large gains they had realized a day earlier. Most points saw little change as the Northeast and Midwest are due to see modest warm-ups Wednesday while the South begins turning colder.

Equitable Resources Inc. and Range Resources Corp. have formed a joint venture to develop a 300,000-acre natural gas field in southwestern Virginia. Under the plan, Range will pay Equitable $315 million to equalize their interests in the Nora Field, which is located near the Big Sandy shale natural gas field in Kentucky and West Virginia.

North American exploration and production (E&P) “capital intensity,” otherwise defined as finding and development (F&D) costs, appears likely to be 20% higher than average this year, twice the long-term 10% historical trend but less than a year ago. Higher oilfield service costs are pushing up F&D costs, said energy analyst John Gerdes, but the rise also follows the continued growth in domestic resource plays, most notably, shale gas.

North American exploration and production (E&P) “capital intensity,” otherwise defined as finding and development (F&D) costs, appears likely to be 20% higher than average this year, twice the long-term 10% historical trend but less than a year ago. Higher oilfield service costs are pushing up F&D costs, said energy analyst John Gerdes, but the rise also follows the continued growth in domestic resource plays, most notably, shale gas.

Triple-digit spikes at Northeast citygates stood out amid otherwise mixed pricing Friday that nevertheless had a major bias toward the upside. The extra Northeast strength was hardly surprising, since that region was destined to bear the brunt of a weekend return to widespread, very cold weather.

Flat to lower prices at a few scattered points remained the exceptions in an otherwise bullish market Thursday. This time cash numbers could claim support from a prior-day screen gain of 40.3 cents, along with continuing concern about Hurricane Katrina shut-ins and winter supplies, in offsetting weaker weather-driven demand.

There is still some potential silver lining in the one major dark cloud hovering around San Diego-based Sempra Energy’s otherwise bullish future, according to an analysis released Friday by Washington, DC-based Stanford Washington Research Group. The dark cloud is the trial scheduled later this year in a California Superior Court regarding allegations of California-Arizona border wholesale natural gas price fixing. The potential silver lining hangs on possible FERC preemption and the filed rate doctrine.

The Federal Energy Regulatory Commission last week called for a review of rates imposed by the PJM Interconnection, saying they may be unjust, unreasonable and otherwise unlawful.

EOG Resources’ CEO Mark Papa may call it “weird” gas, but coalbed methane (CBM), tight sandstone, biogenic gas and shale formations, otherwise known as unconventional natural gas resources, are an increasingly important component of the North American natural gas supply.