Turmoil

The public capital markets have turned to energy in a big way this year — this despite general economic turmoil and low commodity prices. Wil VanLoh, CEO of Houston-based private equity firm Quantum Energy Partners thinks natural resources are seen by investors as an inflation hedge.

Natural gas producers, especially those active in shale basins, could be in for a rough ride in 2009 and beyond if the current turmoil in the financial markets and the downturn in commodity prices continue unabated, producers told FERC Friday. And while industrial customers see lower gas prices as good news, they say now is not the time to relax.

Natural gas producers, especially those active in shale basins, could be in for a rough ride in 2009 and beyond if the current turmoil in the financial markets and the downturn in commodity prices continue unabated, producers told FERC Friday. And while industrial customers see lower gas prices as good news, they say now is not the time to relax.

Natural gas price fundamentals are “rather bearish” going into winter, and the continued turmoil in the financial markets likely will depress prices through 2009, said Barclays Capital energy analysts.

Natural gas price fundamentals are “rather bearish” going into winter, and the continued turmoil in the financial markets likely will depress prices in the near term, said Barclays Capital energy analysts. Barclays reduced its U.S. gas price forecasts through 2009.

As the turmoil in the credit and financial markets deepens, several more oil and natural gas producers Wednesday reported that they are cutting their planned capital expenditures (capex) for the rest of the year and/or 2009 and are rolling back their drilling programs or postponing planned acquisitions in order to preserve capital liquidity. Producers said they also have taken steps to shore up their bank credit lines and cash liquidity.

El Paso Corp. Thursday set a record capital budget for its extensive pipeline business and said it plans to launch an open season for its proposed east-to-west Ruby pipeline in February.

Despite turmoil in the debt markets that has cooled interest in master limited partnerships (MLP) among some investors, Southern Union Co. remains “committed to an MLP transaction involving our midstream assets,” a company vice president told financial analysts recently.

Despite turmoil in the debt markets that has cooled interest in master limited partnerships (MLP) among some investors, Southern Union Co. remains “committed to an MLP transaction involving our midstream assets,” a company vice president told financial analysts last week.