Daily GPI

Citing unfavorable market conditions, BP plc reported decreased earnings in the second quarter relative to the second quarter of 2001. Nevertheless, the company added that “performance and growth [is] firmly on track,” and increased the company’s quarterly common stock dividend to $6 from $5.50 at this time last year.

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.

Quotes for Transco Zone 6-New York City deliveries soared as high as $7.50 Monday as Northeast electric utilities struggled to cope with high temperatures that generated heat advisories throughout much of the area. The heat sparked the PJM Interconnection grid operator to issue a plea for emergency supplies and sparked a run-up in Nepool (New England) and PJM-West power prices for Tuesday to averages of about $116/MWh in each pool, according to the IntercontinentalExchange trading platform. New York and PJM websites showed hourly prices spiking occasionally up to the $1,000/MWh price cap.

Buoyed by triple-digit heat, record-setting power loads, and $7.50 physical prices in the Northeast United States, natural gas futures were fast out of the chute Monday as traders set their sights on a small but unfilled gap left on the daily chart since July 8. Riding that buying wave, the prompt month made an attempt, but ultimately failed, to fill in the $3.08-125 gap completely. Sellers were quick to punish this technical weakness in the noon hour, and market-on-close selling added the final touches Monday afternoon. By its 2:30 p.m. expiry, the August contract had sunk back to $2.976, up 4 cents for the session, but more than 13 cents off its high for the day.

Desperate to improve its financial situation, Dynegy Inc. announced it is selling all of Northern Natural Gas Co. (NNG) to Berkshire Hathaway’s MidAmerican Energy Holdings Co. for $928 million in cash and the assumption of $950 million in outstanding NNG debt. The transaction results in nearly a $600 million loss on the asset, which Dynegy bought from Enron late last year for $1.5 billion, but provides much needed liquidity to Dynegy, which has been under intense selling pressure on the stock market, particularly last week when its shares reached a low of 51 cents. Dynegy shares were up 52 cents (76%) on Monday to $1.20.

Riding a broad stock market rally fueled by investors looking for bargain-basement deals, Williams Cos. Inc.’s stock shot up nearly 88% to close at around $1.99 a share Monday, in spite of the company’s report earlier in the day of a major net loss for the second quarter due mostly to its floundering energy marketing and trading business, which lost nearly half a billion dollars for the period. The sharp bounce in the company’s stock, which had opened at $1.06 a share, suppressed speculation about possible bankruptcy.

Analysts at Raymond James & Associates took a double-blade axe to their natural gas price forecast for the rest of the year, chopping an entire dollar off the prices they are expecting to see in the third and fourth quarters. They based the change on the likelihood that gas prices will crash when the full level of storage is reached well before the end of the injection season.