Period

Record second quarter natural gas production of 631 MMcf/d, a 26% increase from the same period a year ago, have led Fort Worth-based XTO Energy Inc. to increase its gas production projections through the remainder of 2003, the company said Tuesday. The company reported second quarter revenues and operating income about 50% above the same quarter last year.

Record second quarter natural gas production of 631 MMcf/d, a 26% increase from the same period a year ago, have led Fort Worth-based XTO Energy Inc. to increase its gas production projections through the remainder of 2003, the company said Tuesday. The company reported second quarter revenues and operating income about 50% above the same quarter last year.

While much of the gas industry is busy preparing for a period of low prices and declining demand due to the weakening economy, Duke Energy is showing great confidence in future gas market growth and the potential of Canadian supply basins. The company announced plans last week to buy Westcoast Energy in a cash and stock transaction valued at US$8.5 billion, including $4 billion in debt assumption. The move greatly expands Duke’s North American natural gas pipeline holdings and positions it for a strong role in future gas infrastructure expansions.

While much of the gas industry is busy preparing for a period of low prices and declining demand due to the weakening economy, Duke Energy is showing great confidence in future gas market growth. The company announced plans late Thursday to buy Westcoast Energy in a cash and stock transaction valued at US$8.5 billion, including $4 billion in debt assumption. The move greatly expands Duke’s North American natural gas pipeline holdings and positions it for a strong role in future gas infrastructure expansions.

Following a four-day period where natural gas futures rallied 10%, traders elected to play it safe Friday ahead of the weekend. Sensing technical support overhead, bulls were not in the buying mood. Bears meanwhile were also quiet, still licking their wounds from the bear trap that resulted in a 43-cent rally last Monday. The June contract finished at $5.806, up 3.4 cents for the session and 55.1 cents higher for the week.

Contrary to a recent preliminary determination (PD) by FERC, Red Lake Gas Storage LP has argued the California and southwestern gas marketplace has changed dramatically since the energy crisis of 2000-2001, and its proposed 12 Bcf Arizona storage project should be allowed to charge market-based rates.

A week-long period of steadily rising prices at nearly all points, including a few spikes along the way, came to an end Tuesday. Prices tended to range from either side of flat at San Juan Basin and Pacific Northwest points to loosing 30-40 cents or so at Northeast citygates. Many points in the Gulf Coast and Midcontinent/Midwest fell between 20 and 30 cents, or approximately the same amounts by which they had risen the day before.

CenterPoint (formerly Reliant) declared a systemwide Critical Period effective Saturday until further notice, saying it required shippers and pool managers “to stay in balance and have adequate supplies to meet deliveries.”

North American natural gas volumes appear to have fallen 1.4% sequentially and 4.6% over levels for the same period a year ago, according to Lehman Brothers analyst Thomas R. Driscoll. Using final production numbers from 43 Lower 48 and 14 Canadian producers, Driscoll estimated that U.S. production for 2002 will be down 5%-6% over a year ago, while Canada will have a 2.5% drop in production from 2001 levels.