Taking

Natural gas bulls never got a chance yesterday as traders shedlong positions in sympathy with falling cash market prices and inanticipation of warming temperatures this week. By the time thedust had cleared and the orders were tabulated, the March contracthad slipped a cool 18 cents lower, tumbling beneath several keylayers of support and easily negating last Friday’s impressivegains.

It was no secret what bull traders in the natural gas pit had todo yesterday in order to propel the market higher; the charts toldthe story.

Taking a cue from stronger cash market prices, the futuresmarket continued higher yesterday as buyers pressed prices throughseveral key resistance levels. After gapping higher on the open at$2.55, the January contract moved mostly sideways before checkinglower to fill in the gap late in the morning. However, from thereit was all gravy for bulls, who bid the prompt month up 7.6 centsto its $2.585 close.

EnerMark Income Fund of Calgary offered to acquire all shares ofWestern Star Exploration Ltd. by way of a take-over bid. WesternStar assets are mainly producing gas properties concentrated in theHanna, Taber and Thornbury areas of Alberta. EnerMark’s estimate ofWestern Star’s proven reserves total 36,855 MMcf of gas and 147MBoe of crude oil and gas liquids. These reserve volumes includethe results of a successful 21-well gas development program atHanna Garden.

Taking a giant step toward successfully completing a 10-monthquest, Sempra Energy announced last week that the Nova ScotiaUtility and Review Board (URB) has said it will recommend SempraAtlantic Gas as the province’s first-ever gas distributor. Theprovincial government, which has the final say in the matter, saidit would issue a decision in the next three weeks.

Taking a giant step toward successfully completing a 10-monthquest, Sempra Energy announced yesterday that the Nova ScotiaUtility and Review Board (URB) has said it will recommend SempraAtlantic Gas as the province’s first ever gas distributor. Theprovincial government, which has the final say in the matter, saidit would issue a decision in the next three weeks.

Vastar Resources would appear to be taking a wait-and-see viewof next year’s gas prices. CEO Chuck Davidson told Houston energyreporters Tuesday that “not much” of the company’s gas productionis hedged next year. Indeed, Vastar generally doesn’t hedge morethan a year out and hedges less than 50% of its production.Davidson said the company also is using more collars rather thanhedges linked to a specific price.

Vastar Resources would appear to be taking a wait-and-see viewof next year’s gas prices. CEO Chuck Davidson told Houston energyreporters Tuesday that “not much” of the company’s gas productionis hedged next year. Indeed, Vastar generally doesn’t hedge morethan a year out and hedges less than 50% of its production.Davidson said the company also is using more collars rather thanhedges linked to a specific price.

Citing high storage inventories and declining injectioncapabilities related to high field pressures, CIG will implement anOFO taking effect today until further notice for all firmtransportation and storage customers. To relieve a “criticaloperational situation,” CIG is limiting No-Notice Transportation(NNT-1 and NNT-2) customers to an injection maximum of 1/250th oftheir contractual Maximum Available Capacity. Shippers with storageinventory exceeding MAC should initiate withdrawals to get withintheir allowable limits, the pipeline said. Although interruptiblestorage customers (IS-1) were not specifically part of the OFO,they were notified that injections are not available. In additionto the storage situation, CIG said, excessive positive imbalanceson FT contracts are threatening system integrity.