Success

Whether the industry is able to meet the gas supply-driven demand for new pipeline infrastructure remains to be seen, but potentially standing in the way of success are regulatory and market obstacles that could slow progress and drive up costs.

Tuesday’s late expiration-day spike of September futures had limited success in rallying the cash market Thursday. It struggled against the negative influences of generally moderate late-August weather throughout the northern U.S. and Canada, the lack of any new tropical storm activity and the prospects that Tropical Depression Ernesto will be dampening potential power generation load along the East Coast.

Big North American gas finds have been few and far between in recent years, but Talisman Energy Inc. continues to have great success in the Monkman area of northeastern British Columbia. The company announced another successful deep well in the Monkman Paleozoic that tested at a gross rate of 42 MMcf/d. It also announced two successful Triassic gas wells with gross raw rates of 30 MMcf/d and 16 MMcf/d in the same area.

Likely responding to the success of the IntercontinentalExchange’s (ICE) electronic trading activity, the New York Mercantile Exchange Inc.’s (Nymex) board of directors voted Tuesday to offer side-by-side open outcry and electronic trading of its benchmark, physically settled energy futures contracts.

XTO Energy Inc.’s success with the drillbit continued to show dividends in the third quarter, with its production up 34% from a year ago to 1.4 Bcfe/d, compared with 1.045 Bcfe/d in 3Q2004. XTO’s total revenues nearly doubled to $964.2 million from $507.4 million, and earnings were up 122% to a record $312.8 million (86 cents/share), from $140.8 million (41 cents). Following the 3Q announcement, XTO raised its full-year production guidance and development budget.

With a 555 kW natural gas cogeneration system as its central element, Chevron Energy Solutions Friday declared an energy efficiency success story at one of San Diego Community College District’s campuses, Miramar College, claiming 30% energy reductions and $200,000 annual fuel bill savings. The net cost of the energy services contract was $4.5 million after the college received a $555,000 rebate from the state.

Building on the success of its Rocky Mountain drilling program, Denver-based independent Bill Barrett Corp. reported Thursday that it increased its first quarter production by 15% to 8.5 Bcfe. The company’s net income for the quarter was $3.1 million on revenues of $51.9 million, compared with net income of $4.7 million on revenues of $36.4 million in 1Q2004.

Encouraged by early drilling success from its new coalbed methane (CBM) fields in the Raton Basin, Pioneer Natural Resource Co. expects to increase its natural gas-heavy production by as much as 6% this year, the CEO said Tuesday.

BP has purchased a land lease option from the Port of Galveston for a planned liquefied natural gas (LNG) import terminal on Pelican Island, which is about five miles north of Galveston, TX. A BP spokesman said the project is in the early planning stages but about 1.2 Bcf/d of sendout capacity is expected and there is enough space at the site for a large expansion.