Sign

Late-November price softness showed little sign of abating inpost-weekend activity Monday, and except for residents of theNorthwest and Upper Plains enduring somewhat nasty weather, thereason was apparent to anybody who went outdoors. Temperaturesapproaching the Thanksgiving holiday are unseasonably mild for thegreat majority of the U.S., and the lack of load combined with theearly stages of storage withdrawal season were depressing both cashand futures numbers. Quotes were mostly flat for the SouthernCalifornia border and TCO; otherwise price declines tended to rangefrom about a nickel to more than a dime.

Cash prices continued to act like rampaging bulls as Octoberbegan Thursday. Double-digit increases of between 10 and 20 centswere the order of the day almost across the board as traders notedchilly weather in major northern market areas and the fact thatGulf of Mexico production, while nearly back to normal afterhurricane outages, still was missing a few hundred MMcf/d. At leasttwo big processing plants in southeast Louisiana remained shut downdue to storm damage. Cash also built on Wednesday’s big screenrun-up and initially higher futures prices Thursday. Even theNovember contract eventually wound up with a small loss, a traderpointed out.

Key Energy Group Inc. announced Tuesday that it has signed adefinitive merger agreement to acquire Dawson Production Servicesfor an estimated $352 million. The terms of the agreement call forKey Energy to purchase 11.5 million outstanding shares of Dawsoncommon stock for a total of $202 million, and to assume Dawson’sexisting debt of $150 million.