Upward

By last Friday, Sempra Energy’s stock price was clawing its way back upward after dropping nearly 10% earlier in the week on the news that a California state Superior Court judge had rejected the company’s multiple requests for a summary judgment, declaring that a class action lawsuit against Sempra was ready for a jury trial some time next year.

Although its credit ratings remain in the “junk” category, Aquila Inc. received some welcome news last week from Standard & Poor’s Ratings Services (S&P) after it upgraded the Kansas City, MO-based company’s corporate credit rating to “B-” from “CCC+” and removed it from CreditWatch. Fitch Ratings also raised its outlook on Aquila to “stable” from “negative,” and affirmed its rating at “B+,” the fourth-highest junk rating.

Although its credit ratings remain in the “junk” category, Aquila Inc. received some welcome news Wednesday from Standard & Poor’s Ratings Services (S&P) after it upgraded the Kansas City, MO-based company’s corporate credit rating to “B-” from “CCC+” and removed it from CreditWatch. The outlook remains negative.

Deepwater field sizes have increased steadily but deepwater operating costs per unit are facing upward pressure as well, according to Ziff Energy’s fifth annual study on deepwater statistics. Ziff found that deepwater average unit operating costs did fall from 1997 to 1999. However since then average unit operating costs have remained nearly flat with a small increase between 2000 and 2003. For the 13 deepwater fields tracked in the latest study for 2003, all but three of the fields had increased unit costs even among fields with increased production volumes, Ziff said. For information about the study, contact Ziff at (888) 736-5780.

A change in inventory accounting principles helped Royal Dutch/Shell Group increase net income in the first quarter by $226 million to $4.7 billion, up from the previously reported $4.43 billion. The oil major last week also updated its quarterly production figures to give investors “further clarity” ahead of its second quarter results, which will be announced July 29.

Royal Dutch/Shell Group said a change in inventory accounting principles increased net income in the first quarter by $226 million to $4.7 billion. It had previously reported net income of $4.43 billion. Shell also updated its quarterly production figures, and said it was publishing the information to give investors “further clarity.” The second quarter results are scheduled to be announced July 29.

Regional variations in upward price trends tended to even out a bit Tuesday. With scattered exceptions, nearly all points were united in seeing gains ranging from a little less than 15 cents to about 35 cents; however, the lion’s share of increases were clustered around the 20-25 cents range. The primary skewing came in most of the smaller gains being recorded in the West.

After apparently disconnecting from crude oil futures on Friday (see Daily GPI, May 24), the June natural gas futures contract reestablished a link with its big brother Monday as oil supply fears compounded by a platform shutdown in the Gulf of Mexico on Saturday helped push crude and natural gas significantly higher.

Those who suspected Thursday that the week’s upward price momentum was starting to fade go to the head of the class. After four straight days of rising quotes at nearly all points, softness set in Friday across the board. Declines ranged from about a nickel to a quarter, with a majority being in the teens.