production

El Paso Corp. has agreed to pay $30 million to settle claims that it allegedly underpaid royalties for production from natural gas wells in Oklahoma, Texas and New Mexico, according to the company’s annual 10-K report that was filed with the Securities and Exchange Commission Tuesday.

Most exploration and production (E&P) companies expect robust commodity prices to continue, and many believe growth in capital spending this year will be even more substantial than what has been officially budgeted so far, Raymond James analysts said Monday.

El Paso Corp.’s Tennessee Gas Pipeline said it has been notified that BP America Production does not plan to resume operation of its Grand Chenier gas processing plant in southwestern Louisiana that was severely damaged by the Gulf Coast hurricanes last summer.

In an update Friday of supply availability on its 500 and 800 Lines, Tennessee said current shut-in production as a result of damage from Hurricanes Katrina and Rita totals about 350,000 Dth/d. About 100,000 Dth/d is offline due to pipeline damage and 250,000 Dth/d is shut in due to third-party damage, Tennessee said. See the bulletin board for an itemized list of ongoing recovery projects and Tennessee’s projections for when they will be completed.

Exploration and production (E&P) companies take different routes in their drive to add value, and their road maps may follow mergers and acquisitions, organic growth, diversification or a simple focus on one region. However, what sets the winners apart is how well they execute their strategies and how quickly they evolve when times change, a John S. Herold equity analyst said Thursday.

East and North Texas gas production growth has prompted Gulf South Pipeline to propose two complementary pipeline expansion projects to relieve existing capacity constraints. Gulf South is holding simultaneous open seasons on the two projects, which could be stand-alone projects or could be developed jointly. Both would create additional west-to-east firm transportation capacity and provide Gulf South additional flexibility in operating its system both now and in the future.

Following the damage to Gulf Coast and Gulf of Mexico production and pipeline infrastructure from last year’s hurricanes, natural gas consumption for power generation and thermal output plummeted 9% to 492.4 Bcf in October compared to the same month in 2004, the Energy Information Administration reported Wednesday in its Electric Power Monthly publication. EIA said the bulk of the lost fuel was made up through a 43.1% increase in petroleum liquids consumption by generators. October 2005 net generation fell nearly 10% from September levels to 315 million MWh but was up 0.8% from October 2004 levels.

Williams’ exploration and production (E&P) business is expected to at least triple the number of its subsurface drilling locations in the Trail Ridge area of the northern Piceance Basin after winning approval of its application for 10-acre bottom-hole well density from the Colorado Oil & Gas Conservation Commission.

ConocoPhillips on Friday boosted its capital budget by $3.6 billion for 2006 to $10.5 billion, with 63% allocated for exploration and production (E&P). Most of the E&P budget is focused on international projects; however, about $900 million is earmarked for developments in the Lower 48 and Latin America, while $800 million will be spent in Alaska and another $800 million in Canada.