Output

A new deepwater gas discovery by Pioneer Natural Resources will bring its gas output from the Falcon Nest platform to about 400 MMcf/d over the next couple of years, the company said Wednesday.

In an effort to continue to accommodate producers’ current production and future drilling plans, Dallas-based Crosstex Energy LP recently completed a significant capacity expansion at its Gregory Processing Plant north of Corpus Christi, TX. The company noted that with natural gas volumes coming into the system at record levels and significant new volumes on the horizon, the plant expansion was necessary.

Reaping the benefits of its C$2.3 billion purchase of Rio Alto Exploration Ltd. in May, Canadian Natural Resources, Canada’s second largest producer, reported a 54% increase in natural gas production to 1.43 Bcf/d and a 44% increase in earnings in the third quarter to C$117 million or C86 cents/share.

Reaping the benefits of its C$2.3 billion purchase of Rio Alto Exploration Ltd. in May (see Daily GPI, May 14), Canadian Natural Resources, Canada’s second largest producer, reported a 54% increase in natural gas production to 1.43 Bcf/d and a 44% increase in earnings in the third quarter to C$117 million or C86 cents/share.

Rising production in Canada — pushed by the Ladyfern discovery in Western Canada — could exacerbate a “temporary” natural gas oversupply situation in the United States, which in turn could lead to falling North American natural gas prices, lower earnings and declining cash flow estimates for 2002, according to Lehman Brothers analysts Thomas Driscoll and Phil Skolnick in a research note released last Thursday. This gas surge, said the analysts, could send gas prices falling to the $2.25-2.50/MMBtu range for a “sustained period of time” — meaning months, not weeks.

Rising production in Canada — pushed by the Ladyfern discovery in Western Canada — could exacerbate a “temporary” natural gas oversupply situation in the United States, which in turn could lead to falling North American natural gas prices, lower earnings and declining cash flow estimates for 2002, according to Lehman Brothers analysts Thomas Driscoll and Phil Skolnick in a research note released Thursday. This gas surge, said the analysts, could send gas prices falling to the $2.25-2.50/MMBtu range for a “sustained period of time” — meaning months, not weeks.

A natural gas well in northeastern British Columbia is producingas much as 100 MMcf/d, which would make it one of the top 10onshore discoveries in Canadian history, Murphy Oil Corp. reportedyesterday. The El Dorado, AR-based producer boosted its interest inthe play to 63% last November after acquiring Calgary’s Beau CanadaExploration Ltd. Houston-based partner Apache Corp. holds a 37%interest.

Coral Power LLC will supply the natural gas and collect thepower output of a 900 MW generating station to be built andoperated by Tenaska Alabama II Partners L.P., a limited partnershipcomprised of affiliates of Tenaska Inc. The two companies announcedyesterday they had executed an energy conversion agreement for thefacility to be located near Billingsley, AL. Coral plans to marketthe power throughout the Southeast. It is the second of this typeof agreement between Coral and Tenaska. The first was signed inAugust, 1999 for an 845 MW Tenaska Gateway Generating Station inRusk County, TX. The initial financing process for the project willbegin early next year with construction slated to begin in thesummer of 2001 and be completed for summer 2003.

Southern Energy Inc. (SEI), one of Southern Co.’s mainsubsidiaries, named S. Marce Fuller its new CEO last week. Underthe leadership of the former CEO, Tom Boren, SEI reported $69million in second-quarter 1999 earnings, compared with $25 millionfor the same period last year. Now it is up to Fuller to continuehis success.