Tale

The Arkoma Basin has become a “tale of two shales” — it’s not quite the best of times yet, but it’s certainly not the worst. By 2010, natural gas volumes from the Fayetteville and Woodford shales may approach 970 MMcfe/d, a significant jump from this year’s expectation of 469 MMcfe/d.

The Arkoma Basin has become a “tale of two shales” — it’s not quite the best of times yet, but it’s certainly not the worst. By 2010, natural gas volumes from the Fayetteville and Woodford shales may approach 970 MMcfe/d, a significant jump from this year’s expectation of 469 MMcfe/d.

The cash and natural gas futures markets read like a”A Tale of Two Cities” Wednesday as most cash points dropped while the April futures contract staged a quarter rally to close at $7.160. Moderating temperatures expected to swoop in for the remainder of the week allowed the Northeast to record declines ranging from just shy of a nickel to 43 cents, the latter of which was recorded by Dracut putting gas for delivery on Thursday at that location at $7.18.

Unocal Corp. boasted record quarterly profit on Monday, but production told a different tale. Worldwide oil and gas production averaged 404,000 boe/d in the quarter, down from 463,000 boe/d in 2Q2003. On the natural gas side, the North American numbers were dismal, with a 26.2% drop in production to 593.7 MMcf/d from 804.8 MMcf/d in 2Q2003.

Higher natural gas prices in the third quarter continue to tell the tale for most North American-based producers. However, asset sales, natural field declines and storm shut-ins also are playing a major role in quarterly financial reports. With third quarter announcements continuing last week, there were across-the-board winners on the earnings side, but only a few reporting strong gains in North American production.

Higher natural gas prices in the third quarter continue to tell the tale for most of North American-based producers. However, asset sales, natural field declines and storm shut-ins also are playing a major role in quarterly financial reports.

Southern Co., which had the foresight to spin off its marketing operations over a year ago and plod along as an unglamorous utility, was the one sporting the positive results Wednesday, reporting third quarter earnings up 5% this year over last at $595 million, or 84 cents per share. At the same time TXU Corp., which expanded marketing operations to the Continent, has lost its sparkle, settling for 73 cents/share earnings in the quarter or $206 million, off 38% from 3Q 2001.

Calling it a “fairy tale” and “nothing more than smoke and mirrors,” bankruptcy-bound Pacific Gas and Electric Co. late Thursday counter-attacked one of its severest critics, the utility consumer group, TURN, alleging that it “misstated the truth, manipulating facts” in an analysis released earlier in the day that attacked the utility’s proposed Chapter 11 reorganization plan. Even for these two long-time public adversaries, the rhetoric was particularly harsh.

In what seems like the never ending tale of woe, there was at least a little good news for Enron Corp. after the U.S. Bankruptcy Court in New York approved a deal late Friday for UBS Warburg to pick up its quickly fading wholesale energy trading unit. Tuesday, the bad news returned. An attorney claimed to have a box of Enron documents shredded by employees, several states began work on a class action lawsuit, and by the end of the day, federal guards were posted in the downtown Houston headquarters to prevent any more documents from being “lost.”