Territory

It pays to know the territory, particularly if you’re an oil and gas driller in competition with Kentucky coal miners. NGAS Resources Inc., based in Lexington, KY, made its 20 years of experience in eastern Kentucky pay off in 2004, increasing total production by 77%, revenues by 75% and most importantly, completing an acquisition that helped bump up oil and gas assets by 316% to a value of $68.2 million from $16.4 million in 2003.

For the third session in a row, natural gas futures opened in negative territory. However, in sharp contrast to the restrained buying seen Monday and Tuesday, the market accelerated higher Wednesday amid waves of technical and fundamental buying.

Dynegy Inc.’s CEO said Thursday that the company is well on its way to a successful self-restructuring by paring down its debt $1.5 billion and reducing collateral needs more than 50% in the past 12 months. However, said Bruce Williamson, “we’re not done.”

Dynegy Inc.’s CEO said Thursday that the company is well on its way to a successful self-restructuring by paring down its debt $1.5 billion and reducing collateral needs more than 50% in the past 12 months. However, said Bruce Williamson, “we’re not done.”

After trading in positive territory for most of the session, the natural gas futures market dropped lower in the final hour of open-outcry trading Monday on selling ahead of Thursday’s storage report. The October contract was the hardest hit, tumbling 11 cents to finish at $4.661.

Standard & Poor’s Ratings Services (S&P) dropped Mirant Corp. ratings lower into junk territory Tuesday, following on the company’s announcement late Monday of a debt restructuring plan that it said also could serve as a pre-packaged Chapter 11 bankruptcy filing if lenders did not cooperate. S&P cut the corporate credit rating and senior unsecured debt ratings on Mirant and its subsidiaries to ‘CCC’ from ‘B’.

TXU Gas Co., a subsidiary of TXU Corp., on Friday requested to increase its natural gas rates in 437 incorporated cities throughout its service territory, which includes the Dallas/Fort Worth Metroplex area.

Algonquin said colder than expected weather and high demand in its service territory had significantly degraded linepack, and it asked Tuesday that “all point operators voluntarily use means at their disposal to reduce takes to the greatest extent possible.” These restrictions were in effect Tuesday: no forward-haul AO/IT nominations accepted; no due-shipper gas available anywhere on the system; and a Critical Notice posted Feb. 10 requiring all customers to stay within a daily 2% due-pipeline imbalance still stood. However, that afternoon Algonquin cited improving weather and operating conditions in saying it would lift the Critical Notice Wednesday.

In a Critical Notice Tuesday, Algonquin said recent forecast data for its service territory show demand continuing to strengthen in response to colder temperatures. In order to mitigate conditions that could threaten its firm service capability, the pipeline said it “is imperative” that effective with the beginning of Wednesday’s gas day, shippers and point operators limit their daily variances between scheduled deliveries and actual deliveries to 2% or less. Any quantity outside the 2% due-pipeline tolerance will be deemed unauthorized and charged a $15/Dth penalty, Algonquin said. Also on Wednesday, the following restrictions will take effect: no nominated increases through Stony Point Compressor Station except for primary no-notice; no forward-haul IT or Authorized Overrun anywhere on the system; and no due-shipper gas available anywhere on the system.