Daily GPI

Proposals, alternatives and mitigating measures covering two proposed offshore oil and natural gas lease sales of 1.5 million acres in the eastern Gulf of Mexico (GOM) have been identified by the Department of Interior’s Minerals Management Service (MMS). The two proposed sales under consideration are included in the MMS 2002-2007 oil and gas leasing program. Sale 189 is tentatively scheduled for December 2003, and Sale 197 is proposed for March 2005.

The Oil & Gas Asset Clearinghouse, a provider of acquisition and divestiture services for oil and gas properties and prospects and a wholly owned subsidiary of Petroleum Place, said Wednesday that it sold over $27 million in properties at its hybrid auction held July 10 in Houston. The selective auction offered 850 oil and gas properties combined into 93 lots. According to the Clearinghouse, a new auction record of $378,000 was set for highest average price per lot.

Tennessee reported Wednesday it had discovered a pinhole leak in a valve on its East Cameron 49B compressor platform. While repairs are made Thursday through Sunday, physical receipts will be suspended at 13 upstream meters. Other meters will experience higher than normal pipeline pressure.

El Paso Energy Partners LP (EPN) reported a 70% jump in second quarter 2002 net income over the similar time period a year ago. The company posted net income of $28.7 million ($0.33 per unit), up from $16.9 million ($0.19 per unit), excluding one-time charges in the second quarter of 2001. Including $5.1 million in one-time charges related to the sale of EPN’s interest in the UTOS pipeline, net income for the 2001 quarter was $11.8 million ($0.04 per unit).

There will be no shutdown of the Hobart Ranch Processing Plant in Hemphill County, TX as anticipated in a February bulletin board posting, Williams Gas Pipeline-Central said Friday. Duke Energy Field Services has sold the plant to Enbridge Pipelines (Texas Gathering) Inc., which is currently processing gas at Hobart Ranch, the pipeline added. Thus the physical interconnect on Central remains available for nominations.

Transco Zone 6-New York City again skyrocketed by more than a dollar and further raised the peak price bar to $10 Tuesday, but the overall cash market rally had run out of gas, so to speak. Only Iroquois Zone 2 and Columbia-Appalachia managed to join NYC in higher numbers; the rest of the market ranged from flat to down about 20 cents. Most declines were around a dime or slightly less.

Despite a second straight day record electricity demand, and spiking New York City physical gas prices, natural gas futures traded quietly sideways Tuesday, as neither bull nor bear was willing to influence a move in either direction. On its first day as prompt contract, September slipped 1.4 cents to finish at $2.891, just 0.1 cents above its opening trade for the session and smack-dab in the middle of its $2.85-93 trading range. At 86,242, estimated volume was moderate to light.

Dynegy Inc.’s restructuring is on schedule, liquidity is improving, and investors are slowly showing a little more faith. Now, management wants to stabilize the once prosperous marketing and trading unit, and will disregard those who believe the energy merchant sector has been wiped out. “It’s awfully easy to get in a doom-and-gloom mood,” interim CEO Dan Dienstbier said Tuesday. “But I’m not pessimistic in our ability to complete our plan and move forward…Sometimes, you have to go home and say, ‘Hey, get a grip…This is a good, solid company, and we intend to be here when it is all sorted out.'”

Ignoring protests from some shareholders who want a complete separation from Dynegy Inc., ChevronTexaco Corp. Tuesday offered its strongest public endorsement to date, writing down a total of $631 million in second-quarter earnings related to its stake in the marketer, and reiterating that all of its U.S. natural gas agreements remain in place and will remain in place for at least the near term. ChevronTexaco’s profits were down 78% compared to the second quarter a year ago, and part of the loss related to a $531 million special-item charge for the company’s investment in Dynegy’s common and preferred stock to its estimated fair value as of June 30, 2002, and $100 million related to its share of Dynegy’s own writedown.