Worth

Natural gas production at Fort Worth-based XTO Energy Inc. jumped 26% in the third quarter compared with the same period a year ago, with the company averaging 536 MMcf/d versus 426 MMcf/d in 2001. XTO also expects its fourth quarter production to be higher, management said Tuesday, averaging 540-545 MMcf/d — more than XTO had forecast in July.

Fort Worth-based XTO Corp., one of the few U.S. producers expected to post natural gas production gains in the third quarter, has increased its price hedges for gas production through 2004. The company already had hedged about 90% of its 2002 production through the rest of this year.

Fort Worth-based XTO Corp., one of the few U.S. producers expected to post natural gas production gains in the third quarter, has increased its price hedges for gas production through 2004. The company already had hedged about 90% of its 2002 production through the rest of this year.

After scaling back its drilling program in the first half of the year, Fort Worth-based Quicksilver Resources Inc. said it plans to step up its drilling efforts in the United States and Canada in the second half. The company also said it expects to see results from its cost-cutting efforts in the coming months. Quicksilver reported second quarter net income of $3.7 million, or 18 cents/share, including a 2 cent/share charge for a writedown of an equity investment. Second quarter 2001 net income was $5 million, or 26 cents/share. Net income for the first six months of 2002 was down 59% from the same period last year mainly because of significantly lower commodity prices. Quicksilver’s gas production for the second quarter fell to 7.9 Bcf, or 87 MMcf/d, from 8.3 Bcf in 2Q2001. Realized prices fell 12% to $2.71/Mcf compared to $3.09/Mcf in 2Q2001. The company’s crude oil production fell 25% to 231,000 bbl and realized oil prices averaged $22.28/bbl compared to $23.01 in 2Q2001. Natural gas liquids production fell 24% to 34,000 bbl and liquids prices were down 12%. Quicksilver has drilled 58 gross (36 net) successful development and exploration wells this year, many of them (23 net) in the company’s Michigan Antrim shale project and its Corydon project in Indiana. Through Canadian coalbed methane joint ventures, Quicksilver has participated in 120 total wells in Alberta since late 2000. “We will be accelerating our development drilling both domestically and in Canada in the coming months, which will result in solid reserve growth for the company,” said CEO Glenn Darden. “We are seeing the early results of our previously initiated streamlining efforts to lower costs. Benefits should become more evident in future months.”

After scaling back its drilling program in the first half of the year, Fort Worth-based Quicksilver Resources Inc. said it plans to step up its drilling efforts in the United States and Canada in the second half. The company also said it expects to see results from its cost-cutting efforts in the coming months.

Becoming the latest industry player to attempt to cash in on natural gas market volatility, Fort Worth-based XTO Energy Inc. has hedged 100 MMcf/d of production for 2003 at an average New York Mercantile Exchange (Nymex) price of $4.06/Mcf. A few days ago, Energen Resources Corp. locked in 40 new natural gas contracts in all 12 months of 2003, representing 4.8 Bcf of production at an average Nymex price of $4.10/Mcf.

In a transaction worth about $118 million, two Oklahoma City-based independents, Chesapeake Energy Corp. and Canaan Energy Corp. plan to merge. Chesapeake, which already owns about $4 million of Canaan stock, said it would acquire the 4.5 million shares it does not own for $18 a share in cash and assume $33 million in debt. Canaan’s proved reserves, estimated at 100 Bcfe, are 91% natural gas, 74% proved developed, and are located almost exclusively in Chesapeake’s core Mid-Continent operating area.

Royal Dutch/Shell Group last week agreed to buy the British-based Enterprise Oil Plc in a cash deal worth $5 billion, which would be a 15% premium to Enterprise’s closing share price March 29. Enterprise would add about 6% to Shell’s output and boost its presence in the North Sea, Italy, Brazil and the Gulf of Mexico, which has been an emerging frontier for the independent. Overall, Enterprise produced almost 243,000 boe/d in 2001.

Fort Worth, TX-based XTO Energy Inc. announced that in order to provide stability in the future, it has hedged additional natural gas volumes. The company reported it has now locked in approximately 80% of its projected 2002 natural gas production at an average NYMEX price of $3.88/Mcf.