Strengthen

The choice over whether to buy or sell natural gas futures was an easy one to make Wednesday morning. Confronted with a tropical storm that had not strengthened as expected overnight, traders elected to sell the market with a vengeance, pushing the October contract to its lowest level since last Tuesday. Creating a whopping 13-cent gap on the daily bar chart, the October contract started its penultimate trading session by opening well into negative territory. After stabilizing briefly during the late morning, the prompt month was hit with another wave of selling in the afternoon. It finished at $3.494, down 24.8 cents for the day.

In an effort to strengthen its liquidity in these tumultuous times for the energy industry, Calpine Corp. said late last week that it has entered into an agreement to sell certain non-strategic Canadian oil and gas properties for $81 million (C$125 million). In addition, the San Jose, CA-based company secured $106 million in non-recourse project financing to give it the leverage to complete construction of its 300 MW Blue Spruce Energy Center in Aurora, CO, east of Denver.

In an effort to strengthen its liquidity in these tumultuous times for the energy industry, San Jose, CA-based Calpine Corp. said Thursday that it has entered into an agreement to sell certain non-strategic oil and gas properties for $81 million (C$125 million). Calpine inked the deal with NAL Resources on behalf of NAL Oil & Gas Trust and another institutional investor.

The Williams Companies continues to plan asset sales to strengthen its liquidity and improve its balance sheet. The company announced Tuesday that it is considering selling its ownership interest in an olefins production plant in Geismar, LA, and an associated ethylene pipeline system in Louisiana, as well as a Baltic refinery. Terms of a potential petrochemical asset sale have not been developed, but Williams said it has received unsolicited expressions of interest.

Williams plans to sell its Kansas Hugoton natural gas gathering system for $100 million cash to FrontStreet Hugoton LLC as part of its plan to strengthen its balance sheet and more tightly focus on its portfolio of energy businesses. The final sale price will be subject to certain post-closing adjustments, the Tulsa-based company said. To date, Williams has made nearly $5 billion so far in its plan to improve its liquidity, part of an overall fiscal program to create a net $8 billion within the next year.

In an effort to further reduce its debt and strengthen its balance sheet, CMS Energy Corp. announced it has put its oil and gas exploration and production unit, CMS Oil and Gas Co., on the block and intends to exit the E&P business. The E&P operation is one of many CMS will sell this year to improve its financial situation (see NGI, May 6).

Williams CEO Steve Malcolm said his company is cutting $50 million in annual expenses in an effort to strengthen its balance sheet and prepare for the possibility that it will have to assume $2.2 billion in debt from its former communications subsidiary.

Continuing its plan to divest non-core assets and strengthen its balance sheet, Williams’ midstream gas and liquids group sold three natural gas gathering systems located in South Texas for $6 million to Hurd Investments of San Antonio and a subsidiary of Houston-based Copano Energy. The companies purchased Williams’ 76% partnership interest in the Webb-Duval system, and 100% ownership interests in the Olmitos and Cinco Compadres systems.

Continuing its plan to divest non-core assets and strengthen its balance sheet, Williams’ midstream gas and liquids group said late Thursday that it has sold three natural gas gathering systems located in south Texas for $6 million to Hurd Investments of San Antonio and a subsidiary of Houston-based Copano Energy. The companies purchased Williams’ 76% partnership interest in the Webb-Duval system, and 100% ownership interests in the Olmitos and Cinco Compadres systems.