Severe

Chesapeake Energy 1998 year-end results were hammered bynon-cash impairment charges of $881 million. Due mainly to “thesevere decline in oil and natural gas prices during 1998″Chesapeake lost $934 million on revenues of $382 million.

Despite severe reservations from powerful marketers, such asEnron and Shell Energy Services, SB 601 was introduced to thePennsylvania legislature last week, moving residential and smallcommercial gas customers one step closer to gas supply choice. Thenext step for the bill, which supporters said was the result of aworking collaborative of marketers, LDCs, and the PennsylvaniaPublic Utilities Commission (PUC), will come March 23, when theSenate Consumer Protection committee will hold a hearing on thebill.

The severe winter cold snap last week triggered unprecedentedprice spikes at spot points in the Pacific Northwest and NorthernCalifornia. PG&ampE Citygate prices hit $6.18/MMBtu on Monday andwere near $5 on Tuesday. Prices jumped to $11.05/MMBtu at Sumas onthe previous Friday for weekend flow, and on Monday and Tuesdaystayed north of $6.

Three weeks of severe weather in the Gulf of Mexico have leftproducers with their heads spinning and have sent Gulf productionon a roller coaster ride, but producers should find some solace inthe large number of pipeline companies scrambling to serve theirgrowing transportation needs with new projects. In total, the newpipeline expansions announced last week could add more than 1 Bcf/dof additional pipeline access to markets for deep-water supplies.