Position

Industry energy consumers called on the House Wednesday to require the Commodity Futures Trading Commission (CFTC) to provide aggregate position limits across all exchanges in order to control excessive speculation in energy commodities, particularly natural gas.

Whether one believes speculators exert undue influence over commodity prices likely depends as much on one’s market position as on any empirical evidence that speculative trading is “good” or “bad.” So rather than trying to call out market sinners, a new report on gas market speculation from the National Regulatory Research Institute (NRRI) merely offers a primer on the long-debated topic and advice for state utility regulators who must weigh the impact of hedge fund activity on ratepayers.

Whether one believes speculators exert undue influence over commodity prices likely depends as much on one’s market position as on any empirical evidence that speculative trading is “good” or “bad.” So rather than trying to call out market sinners, a new report on gas market speculation from the National Regulatory Research Institute (NRRI) merely offers a primer on the long-debated topic and advice for state utility regulators who must weigh the impact of hedge fund activity on ratepayers.

Denver-based Cimarex Energy Co. agreed to pay $180 million cash to Chesapeake Energy Corp. to add 38,000 net acres in its emerging Woodford Shale position in the Anadarko Basin of western Oklahoma.

Denver-based Cimarex Energy Co. agreed to pay $180 million cash to Chesapeake Energy Corp. to add 38,000 net acres in its emerging Woodford Shale position in the Anadarko Basin of western Oklahoma.

Chesapeake Energy Corp. added about 13,000 net acres to its Haynesville Shale position in a $263 million agreement with International Paper (IP), based in Memphis, TN. The proceeds are to be used to pay down debt, said IP CEO John Faraci. The transaction is set to close in August. Based on the company’s internal research, Chesapeake’s Haynesville Shale play potentially could have a larger impact on the company than any other play, according to Chesapeake CEO Aubrey McClendon. Chesapeake is currently using four operated rigs to further develop its 300,000-plus net acres of leasehold and expects to be operating up to 12 rigs by year-end 2008 and up to 20 rigs by year-end 2009.

House Democrats plan to take up a package of energy measures next week that would put producers in the unenviable position of having to either drill on their existing leases or face the prospect of paying higher fees.

Quicksilver Resources Inc. has increased its position in the emerging Horn River Basin of northeastern British Columbia, which is considered one of the most promising new natural gas shale plays in Canada.

All-time record crude futures prices combined with near-term cold forecasts and short position-covering by the funds to propel prompt-month natural gas futures north of $9 on Tuesday for the first time in nearly 15 months. Continuing what began during the Globex-only trading session on Monday, the March contract reached a high of $9.005 during Tuesday’s regular session before closing at $8.977, up 31.7 cents from Friday’s close and the highest prompt-month close in almost 25 months.