Warranted

The cause of an apparent “well control incident” at a Chesapeake Energy Corp. natural gas drilling site in Wyoming was under investigation Wednesday, and the producer was preparing resources and equipment to get it under control. No injuries were reported.

A natural gas market eager to see whether last week’s breakout to the upside was warranted or a bout of overzealous exuberance received confirmation of the former on Monday as the July natural gas futures contract tested resistance at $5 for a second consecutive session before closing out the day at $4.916, up 11.9 cents from Friday’s regular session finish.

The first week of 2006 came to a close with the cash market continuing to display more resilience than would seem to be warranted in a period of unusually mild weather and following a storage report that shocked many by estimating a highly unusual small injection for the end of December and sent the screen to its third big loss in a row.

Proving that skepticism over last week’s natural gas storage report was warranted, the Energy Information Administration (EIA) said Thursday morning that it significantly revised its report for the week ended Nov. 19 due to “a resubmission of data from one or more respondents.” The announcement immediately pulled the rug out from under the January futures contract, which ended up settling down 60.2 cents at $6.811.

Proving that skepticism over last week’s natural gas storage report was warranted, the Energy Information Administration (EIA) said Thursday morning that it significantly revised its report for the week ended Nov. 19 due to “a resubmission of data from one or more respondents.” The announcement immediately pulled the rug out from under the January futures contract, which ended up settling down 60.2 cents at $6.811.

In its first orders providing industry guidance on pipeline creditworthiness standards, FERC last Wednesday appeared to take the middle ground by offering protections to both interstate natural gas pipelines and their shippers.

Weighing in on the Alaska pipeline debate and whether government subsidies for Alaska gas production is warranted, Jim Antoine, Minister of Resources Wildlife and Economic Development for the Northwest Territories said treaties, agreements and statutes identified to support gas development 25 years ago are no longer applicable to today’s discussions surrounding an Alaska natural gas pipe. On Sept. 17, Antoine formally asked federal Minister of Natural Resource Herb Dhaliwal to look into the legal status of the 25-year-old agreements.