production

North American exploration and production (E&P) companies’ cost structures and current share prices suggest that natural gas prices need to be more than $8/Mcf and oil has to be more than $70/bbl to deliver a market return on equity capital, according to an analysis by SunTrust Robinson Humphrey/the Gerdes Group (STRH).

Tennessee said it was allowing all production behind the Grand Chenier and Sabine processing plants that had been ordered to shut in Monday due to Tropical Storm Edouard to resume flows Wednesday.

As the energy sector lines up to begin issuing its quarterly reports in the coming weeks, North American-based exploration and production (E&P) companies are expected to top earnings estimates because of higher oil and natural gas prices. In the second quarter, which ended June 30, crude oil futures jumped almost 40% and gas futures rose almost 30%.

Exploration and production companies are looking to the Marcellus Shale and seeing dollar signs; so are Pennsylvania landowners whose acreage sits atop the shale and its gas reserves.

With its natural gas production 20% higher than at the same time a year ago and commodity prices up, Williams raised its 2008 and 2009 earnings and spending forecasts Wednesday.

Exploration and production companies are looking to the Marcellus Shale and seeing dollar signs; so are Pennsylvania landowners whose acreage sits atop the shale and its gas reserves.

Plains Exploration & Production Co. (PXP) and a subsidiary of Occidental Petroleum Corp. (Oxy) agreed to pay $162 million to an undisclosed third party to jointly acquire 11,500 net acres in the Piceance Basin. The leasehold is adjacent to PXP’s existing Piceance Basin natural gas assets (see Daily GPI, April 19, 2007). The agreement gives PXP and Oxy a 95% working interest in the acreage. Plains plans to operate the leasehold and estimated that it includes more than 800 future drilling locations and 75 million boe net potential of unproved reserves. The transaction is expected to close by the end of September.

Exploration and production (E&P) spending worldwide now is on pace to accelerate 20% this year because of higher oil and natural gas prices, according to a survey of producers by Lehman Brothers. Lehman’s survey in December had forecast worldwide E&P spending in 2008 would rise only 11% (see NGI, Jan. 7).

BP plc, Royal Dutch Shell and Bill Barrett Corp. are considered the “best” oil and natural gas production companies operating in Wyoming based on their environmental performance, according to a conservation group.