Spiked

The stock market price of natural gas-weighted companies spiked from late Friday through Tuesday as prospects for a more profitable product heightened when the U.S. Department of Energy (DOE) broke the log-jam and announced it was conferring a worldwide liquefied natural gas (LNG) export license on a second project (see Daily GPI, May 20).

Williams Partners Transco Pipeline delivered a system-record volume of natural gas on Jan. 22 of 10.4 million Dth as gas demand and prices in Eastern Seaboard markets spiked amid bitterly cold temperatures.

Halliburton Co., the No. 1 hydraulic fracturing (fracking) services provider in North America, said Monday fourth quarter net profits spiked 50% year/year on the strength of U.S. operations. However, as the industry shifts from dry natural gas plays to liquids, CEO Dave Lesar said costs are rising.

Weekend prices showed almost a directly opposite pattern from deals done a day earlier. Whereas Northeast citygates had spiked Thursday while the rest of the market was softer, on Friday it was the Northeast (along with the Rockies) plunging while all other points were rising, based largely on the bullish Nymex response to Thursday morning’s storage withdrawal report.

March natural gas futures spiked to a more-than-two-year high on Friday as traders were beginning to fully digest the fact that pre-winter forecasts for a number of mild stretches this season are turning out to be completely incorrect. The prompt-month contract settled Friday’s regular session 25.5 cents higher at $9.146 and was pushing even higher in the Globex electronic session late in the afternoon. Friday’s regular session close marked a 48.6-cent increase over the previous week’s close.

While near-month futures spiked to an all-time high Tuesday of $14.338 and the 2006 strip stands at $11.93, two analysts predict the gas market will scale back down by about 33% next year to range between $7.15 and $8/Mcf after the hurricane recovery is complete. They said prices should remain just above $6 over the long term.

Northeast citygates spiked by multi-dollar amounts Friday, greatly outpacing strong price increases at all points except Sumas. Transco Zone 6-New York City led the pack with a peak quote of $30 and an average of more than $16 as a massive cold front moved into the East. It is scheduled to stick around for a while.

Houston Exploration Co. (THX) shares spiked more than $5 last Tuesday morning to a new 52-week high after its parent company KeySpan Corp. announced plans to transfer 10.8 million THX shares back to the exploration and production (E&P) affiliate in exchange for 100% of a wholly owned THX subsidiary, Seneca-Upshur Petroleum Inc., including 50.5 Bcf of Appalachian gas reserves.

Houston Exploration Co. (THX) shares spiked more than $5 Tuesday morning to a new 52-week high and ended the day up 9% at $49.70 after KeySpan Corp. announced plans to transfer 10.8 million THX shares back to the exploration and production (E&P) affiliate in exchange for 100% of a wholly owned THX subsidiary, Seneca-Upshur Petroleum Inc.