Take

The House Subcommittee on Energy and Mineral Resources Thursdayapproved royalty-in-kind legislation (H.R. 3334) to require thefederal government to take the actual oil or natural gas product asits royalty payment instead of cash for production offshore and onfederal lands. The bill, opposed by the Interior Department’sMinerals Management Service (MMS), included an amendment whichwould allow the government to receive cash for production fromlow-volume producing wells in remote locations.

“Everything basically went back to index,” said a trader onLouisiana pipes Thursday after prices had slipped to either side of$2. Markets were down across the board, even in previously immuneintra-Alberta. Reasons for the softness weren’t hard to find:moderating weather, a huge storage injection report and a plungingfutures screen.

Follow-through buying took hold of Nymex trading early, and ledto new session highs before the closing bell last Friday as Julygained 9.9 cents to settle at $2.17. July gapped higher on the openafter coming into the day with solid momentum following Thursday’smodest gains in both the regular and ACCESS trading session. Julyopened at 2.115 Friday, already 4.4 cents above Thursday’s settle.A warming trend for both the weekend and extending into the 6-10day forecast in the South, coupled with some technical momentumwere universally cited as reasons for the strength.

The overall cash market was far from a model of consistencyWednesday. While prices rose by up to a nickel at Gulf Coastpoints, Northeast citygates were no more than flat to up a penny.In contrast, while Michigan and Chicago-area citygates saw gains of2-3 cents, field prices in the Midcontinent were mostly flat around$2.10. However, a Midcontinent producer found it “a littlesurprising” that trading ended on a modestly strong note with latedeals tending to be near the top of small ranges.

The June Nymex contract spiraled 8.0 cents lower to $2.130 onWednesday, thanks to what an analyst said was traders unloadinglong positions ahead of the latest AGA storage report. That report,which came in at 78 Bcf, was slightly above the expected range of50-75 Bcf, and nearly double the 46 Bcf report from last year.

After searching for a leader to take the helm at EquitableResources for nearly a year, the company’s board of directorsannounced yesterday it has appointed Coral Energy CEO Murry S.Gerber, 45. Gerber will assume his position as president and chiefexecutive officer of Equitable on June 1. Gerber also will serve asa director on the company’s board.

No one stepped up to take either of the two 593,000 MMBtu/dpackages of El Paso Natural Gas transportation capacity NGC postedfor release over the past 10 days. One package was offered thoughthe end of April and the other through December 1999. Theycomprised 40% of the 1.3 Bcf/d NGC holds on El Paso and 80% of itsaccess to the San Juan Basin under the purchased contracts. NGC’sMike Flinn said market players missed a huge opportunity. One thatNGC isn’t likely to offer again.

The May Nymex natural gas futures contract took a break from itsrecent meteoric rise by nudging 0.6 lower to $2.556 Friday. Still,that price leaves the spot month up 8.7% for the week.

There’s no point in opening the valves on a new pipeline if noone is there to take the gas, Maritimes and Northeast Pipeline toldFERC this week. The pipeline said its only shipper, affiliate DukeEnergy, has backed out of Phase I of its project, deferring itsrequest for 60 MMcf/d of firm transportation until Nov. 1, 1999. Asa result, Maritimes has requested it be allowed to extend itsin-service date by a year and defer cost-recovery while movingforward on construction of most of the system.