Pressured

The energy and utilities sectors are among those where the pressure remains to effect “real” debt reduction in what likely will be a “quarter-in, quarter-out” battle, according to a new report by CreditSights analysts. The report found an 85% escalation in debt in the energy sector over the past four years — among the highest for the sectors — largely driven by the last few years of consolidation.

The energy and utilities sectors are among those where the pressure remains to effect “real” debt reduction in what likely will be a “quarter-in, quarter-out” battle, according to a new report by CreditSights analysts. The report found an 85% escalation in debt in the energy sector over the past four years — among the highest for the sectors — largely driven by the last few years of consolidation.

Pressured by mild weather and weakness in the nearby crude oil pit, natural gas futures slid lower Wednesday as traders continued to retrace gains made during the first half of the month. However, after extending to a double-digit loss in the morning, the May contract battled back in the afternoon as traders positioned themselves ahead of Thursday’s storage report. The prompt month closed at $5.569, down 7.6 cents for the session, but up 4.9 cents from its morning low.

Pressured by its lenders to restrict dividends before credit agreements could be finalized, CMS Energy Corp. last week cut its common dividend 50%, to an annual rate of 72 cents a share. Whether the dividend is restored or even continued after the end of this year will depend on how well the business performs in the future, CFO Alan Wright told analysts during a conference call. By cutting the dividend, however, CMS reached agreement with a group of 21 banks on five credit facilities totaling $1.3 billion.

An assertion by a former UBS PaineWebber broker that he had been fired for advising clients to sell their Enron Corp. shares in August 2001 was verified Wednesday by Congressional investigators, who released a series of e-mail messages between the brokerage and the company. Broker Chung Wu, formerly in PaineWebber’s Houston office, said he suspected his dismissal followed pressure from Enron after he sent a message to clients early on Aug. 21 warning that Enron’s “financial situation is deteriorating” and that they should “take some money off the table.”

Pressured by the release of another in a string of bearish weather forecasts and in sympathy with losses seen in the nearby crude oil pit, natural gas futures plumbed new three-week lows Monday, as traders continued to liquidate longs acquired during the month of October. The December contract never recovered from its 7-cent gap-lower open and finished with a 19.2-cent loss at $2.733.

Rapidly declining gas and oil prices, a weakening economy and higher operating costs pressured ExxonMobil Corp. earnings down 23% or $970 million, excluding merger effects, to $3.3 billion ($0.48 per share). Earnings per share declined by 20%. Domestic natural gas sales were off more than 16% from the same period last year.

Esenjay Exploration Inc. has completed and tested its Runnells #5 well in the deep geo-pressured Frio Trend in Matagorda County, TX, which production tested at an unstimulated daily flow rate of 21 MMcf and 710 bbl of condensate, with flowing tubing pressure of 7,436 pounds per square inch through a 25/64-inch choke. Esenjay, headquartered in Houston, is the generator and operator, and owns a 33% working interest. Esenjay turned the Runnells #5 well to sales and it is currently producing at a daily rate of 18 MMcf and 580 bbl of condensate. Combined, the company’s Runnells #5 and #3 wells are producing 31 MMcf/d and 1,052 bbl/d of condensate. Both wells have additional pay behind pipe.

Pressured by another large storage injection made even larger by a 14 Bcf revision, natural gas futures sunk lower Wednesday as traders once again set their sights on the sub-$3.00 level. However, similar to other moves down toward that level of support, yesterday’s selling was unable to demote prices beneath the $3.00 mark. The August contract settled at $3.087, down 7.8 cents for the day and just pennies above its $3.055 low.