Raises

Even though it says “accurate and precise prediction of commodity prices is futile,” Simmons & Co. International nevertheless makes a stab at it, increasing its natural gas price forecast for 2002 from $2.25/Mcf to $2.90/Mcf, in line with a rise in the forecast for crude oil from $21 a barrel to just over $24 a barrel.

In the story “Rush to LNG in Baja Raises Questions About Demand, Infrastructure” published on Thursday, March 7, in the 8th paragraph, note that Sempra’s proposed LNG terminal will be south of Rosarito and north of Ensenada.

The latest announcements for developing liquefied natural gas (LNG) receiving facilities and related infrastructure in the northern end of Mexico’s Baja California peninsula already has energy planners in the Southwest scratching their heads over where and how the 2.2 Bcf/d already planned — and more in the works — will be transported and consumed. Conventional wisdom says 1 Bcf/d of added capacity — about one and a half projects — centered south of the U.S. border would likely be the maximum volume the market and pipeline infrastructure can handle, according to the California Energy Commission’s leading natural gas planning guru.

The latest announcements for developing liquefied natural gas (LNG) receiving facilities and related infrastructure in the northern end of Mexico’s Baja California peninsula already has energy planners in the Southwest scratching their heads over where and how the 2.2 Bcf/d already planned, and more in the works, will be transported and consumed. Conventional wisdom says 1 Bcf/d of added capacity — about 1 and 1/2 projects — centered south of the U.S. border would likely be the maximum volume the market and pipeline infrastructure can handle, according to the California Energy Commission’s leading natural gas planning guru.

Dynegy said it sold 25 million shares of Class A common stock at $20.75 per share in an underwritten public offering related to the capital restructuring program announced on Monday (see Daily GPI, Dec. 18). Net proceeds from the sale totaled $494 million and will be used to reduce debt. Lehman Brothers acted as sole underwriter and retains a 10% over-allotment option for 30 days.

In an effort to reach higher post merger goals, ChevronTexaco now estimates it will reduce its work force by 4,500 rather than the 4,000 announced last month. The move is part of a program designed to produce savings of $1.8 billion by March 2003 ($1.2 billion of it in six to nine months) and a 2-3% increase in return on capital employed in 2003-2004. The company also said it is expecting long-term production growth of 2.5-3% over the next five years.

In an effort to reach higher post merger goals, ChevronTexaco now estimates it will reduce its work force by 4,500 rather than 4,000 announced last month. The move is part of a program designed to produce savings of $1.8 billion by March 2003 ($1.2 billion of it in six to nine months) and a 2-3% increase in return on capital employed in 2003-2004. The company also said it is expecting long-term production growth of 2.5-3% over the next five years.

Reflecting what is fast becoming an industry trend, Reliant Resources Inc. late last week reported a slight drop in its third quarter 2001 earnings after seeing lower margins in wholesale energy trading and operating losses in retail and European energy operations. However, the company raised its earnings guidance for the year based on expanded wholesale activity and improvements in retail operations.

Due in part to the company’s limited exposure in California and “overdone negative market sentiment” pertaining to the decline in spark spreads and fears of regional capacity overbuild situations, UBS Warburg analyst James Yannello said Dynegy is a company that is on the move, upgrading its rating from ‘buy’ to ‘strong buy’ last week.