Prices

As futures prices continue to reside south of $3, the U.S. Gulf of Mexico offshore rig market continues to worsen in terms of both rig utilization and day rates, according to the latest ODS-Petrodata Group Offshore Rig Day Rate Indices. However, even while the Gulf remains in decline, other rig market segments remain strong, the company’s data shows.

As futures prices continue to reside south of $3, the U.S. Gulf of Mexico offshore rig market continues to worsen in terms of both rig utilization and day rates, according to the latest ODS-Petrodata Group Offshore Rig Day Rate Indices. However, even while the Gulf remains in decline, other rig market segments remain strong, the company’s data shows.

Due to spiraling commodity prices, which have led to a drop in Devon Energy Corp.’s stock price, Devon and Mitchell Energy & Development Corp. said Friday that the board of directors of each company has amended their merger agreement to address certain risks posed by Devon’s falling stock price. The amendment would provide for an alternate structure to mitigate the risks in the event the stock price would prevent the issuance of certain tax opinions, which are a condition to the merger transaction.

Despite falling gas prices, declining demand and increasing production, the rush is still on to bring more liquefied natural gas (LNG) to the United States. Two El Paso Corp. subsidiaries are conducting separate open seasons to determine non-binding customer interest in transportation capacity on pipelines that will transport natural gas from El Paso Global LNG’s planned LNG terminal on Grand Bahama Island to Florida.

Swing prices ranged from flat to down about a nickel at most points Tuesday, as the market began to lose some of the cold weather that had kept numbers relatively firm in comparison to a plunging screen the day before. Some San Juan/Rockies/Pacific Northwest points achieved moderate gains, but CIG, Cheyenne Hub and Questar were retreating to sub-$1 levels again, in response to the region’s general supply glut combined with limited storage injection options.

The cash market was up to its old tricks again Monday, ignoring a general lack of hot-weather support and a significantly weaker screen to post moderate gains. Most of the upticks were a dime or less. Rockies points, which had seen the largest declines going into the weekend, rebounded more strongly than others, but several Northeast citygates also saw dime-plus increases.

Despite higher cash market prices, natural gas futures checked lower Monday as traders learned that neither of the tropical systems being monitored Friday had been able to strengthen over the weekend. The October contract suffered the largest setback, tumbling 10.8 cents to finish at $2.392.

Unocal Corp. CEO Charles R. Williamson told analysts last Wednesday at Lehman Brothers’ 15th annual CEO Energy Conference in New York City that the company’s worldwide net oil and gas production could average nearly 800,000 boe/d in 2007, a 63% boost from the company’s average production last year.

Unocal Corp. CEO Charles R. Williamson told analysts on Wednesday at Lehman Brothers’ 15th annual CEO Energy Conference in New York City that the company’s worldwide net oil and gas production could average nearly 800,000 boe/d in 2007, a 63% boost from the company’s average production last year.