Prospects

Pushed by growing industrial and power demand for natural gas and the prospects for a cold winter, the Energy Information Administration (EIA) said it expects total gas consumption for the 2002-2003 heating season to rise 12% from a year ago to average 73 Bcf/d. This will prop up spot gas prices during the fourth quarter of the year and into the early part of 2003, but “severe price spikes are not likely” due to the gas cushion in storage, the agency reported.

Citing the downgrade of El Paso Energy Corp. as part of the reason for its action, Moody’s Investors Service downgraded the senior secured debt of a MidAmerican Energy Holdings Co. subsidiary that owns and operates a 537 MW natural gas-fired combined cycle generation plant located in the Midwest.

Citing the downgrade of El Paso Energy Corp. as part of the reason for its action, Moody’s Investors Service downgraded the senior secured debt of a MidAmerican Energy Holdings Co. subsidiary that owns and operates a 537 MW natural gas-fired combined cycle generation plant located in the Midwest.

The Oil & Gas Asset Clearinghouse, a provider of acquisition and divestiture services for oil and gas properties and prospects and a wholly owned subsidiary of Petroleum Place, said Wednesday that it sold over $27 million in properties at its hybrid auction held July 10 in Houston. The selective auction offered 850 oil and gas properties combined into 93 lots. According to the Clearinghouse, a new auction record of $378,000 was set for highest average price per lot.

The cash market managed to keep up a mildly firmer facade Thursday, but prospects for a weekend crash are fairly strong, sources said. Yesterday’s quotes ranged from flat to either side of a nickel higher in most cases, with scattered points Transco Zone 6 (both pools), Transco Station 85 and MRT registering small declines.

Coming as no surprise due to the recent announcements that exploration and production companies are slashing their drilling prospects because of unfavorable natural gas commodity prices, Houston-based offshore drilling contractor Global Marine reported that its worldwide Summary of Current Offshore Rig Economics (SCORE) for September 2001 decreased by 4.3% from the previous month.

Even though overall operations are performing well, with oil and gas production on track to be up 5% over 2000 and development projects on schedule, producer Kerr-McGee Corp. said Friday that uncontrollable outside events — mostly within its chemicals division — will push down projected third quarter earnings, which will be released in one month.

While Capitol Hill’s legislative schedule has been turned upside down in the wake of last week’s terrorist attacks, the Senate Energy and Natural Resources Committee still expects to mark up and vote out a comprehensive energy bill this fall, an aide to the committee said.

With lack of progress in the FERC settlement talks, state legislative negotiations and among state regulators, all holding the hope for some financial relief, Southern California Edison Co. officials indicated Tuesday that they will continue to resist bankruptcy if state and federally-generated relief falls short, but they will be in a “very difficult” predicament unless some solution comes out of the state legislature by mid-August.