Prices

Atlanta Gas Light Co. (AGL) will be the first to say that warmweather and fixed prices can cause trouble. In a situation that hascaught the eye of Georgia’s Public Service Commission (PSC), AGL’snew unregulated billing has enraged hundreds of customers who,because of warm weather, have not used much gas, but still receivedwinter-like gas bills. The public outcry caused the PSC to schedulea vote on Jan. 5 to determine whether a hearing should be held toexamine re-regulating the state’s gas industry. If the commissiondecides a hearing is necessary, it will be held Jan. 26 with adecision to come shortly thereafter.

Atlanta Gas Light Co. (AGL) will be the first to say that warmweather and fixed prices can cause trouble. In a situation that hascaught the eye of Georgia’s Public Service Commission (PSC), AGL’snew unregulated rates have enraged hundreds of customers who,because of warm weather, have not used much gas, but still receivedwinter-like gas bills. The public outcry caused the PSC to schedulea vote on Jan. 5 to determine whether a hearing should be held toexamine re-regulating the state’s gas industry. If the commissiondecides a hearing is necessary, it will be held Jan. 26 with adecision to come shortly thereafter.

Consolidated Natural Gas (CNG) is taking advantage of depressedprices in the E&ampP sector and spending more of its money where itsees the most long-term bang for the buck. Having pulled out of themarketing business, CNG’s $524.5 million capital budget for 1999continues the company’s focus on expanding its exploration andproduction business. More than 60% of the 1999 budget is allocatedto CNG’s E&ampP subsidiary, CNG Producing Co.

The upward track of cash prices continued Wednesday, but at asnail’s pace compared to Tuesday’s skyrocketing pyrotechnics. Mostof the new increases were quite meager, ranging from a penny or soto about a nickel. The first significant winter weather that manyareas have seen so far this season was credited with keeping theNovember price rally going, albeit modestly.

The producer who expected Midcontinent prices to be back aroundNovember indexes “fairly soon” (see Daily GPI, Nov. 3) didn’t havelong to wait. In fact, he underestimated the cash market as biggains across the board-except for intra-Alberta-Tuesday carriednearly all points back to index levels or higher. Rises between 15and 35 cents dominated the market.

The latest lease sale by the Texas General Land office raised$9.2 million Tuesday, down considerably from previous sales of thisspring. The highest bids for tracts were in the bays along thecoast, with the highest single bid from Sabco Oil & Gas Corp.of more than $1.11 million for 320 acres in Corpus Christi Bay. Thesecond highest bidder was Petsec Energy Inc., totaling $275,572 foran 1,135-acre High Island tract off Jefferson County in the Gulf ofMexico. The third highest bidder was Seneca Resources Corp. for a320-acre gulf tract off Brazoria County. The Seneca bid was$236,309.

In what a few sources described as some of the quietest tradingthey had seen in quite a while, cash quotes fell anywhere from 2cents to a dime or so at Eastern points Monday. In contrast,numbers were generally flat to slightly higher for the Rockies,Southwest basins, California and intra-Alberta.

All sources were on the same page Tuesday regarding what waspushing cash prices upward. “Blame the screen,” they chorused,because there weren’t any fundamentals around at which to point.Just about every point was up between 10 and 15 cents, except forintra-Alberta increases of a little over a nickel.

Noticing continued futures strength and a growing threat of newstorm shut-ins in the Gulf of Mexico, cash prices built onTuesday’s gains with even bigger ones Wednesday. Increases oneither side of 20 cents were common at nearly all points. TheCalifornia market, far removed from Gulf storm influence, sawsmaller gains of about a dime, although a Malin rise of 13 centsnearly fulfilled one source’s prediction of up 20 cents there (seeDaily GPI, Sept. 16) based on Tuesday’s intra-Alberta pricestrength.