NGI The Weekly Gas Market Report

With the company’s NRG Energy independent power producer unit leading the way, Xcel Energy Inc. is raising its earnings estimates for this year to $2.30 per share, up from previous estimates of $2.20 per share. Meanwhile, executives at the company last Tuesday sought to allay any possible concerns about Xcel’s supply position heading into the summer months.

In one of the largest open season tallies ever, El Paso Natural Gas reported last week that it received 127 shipper requests for a total of 9.7 Bcf/d of firm transportation capacity in its recent March open season for an expansion to California (see NGI, March 19). A total of 76 shippers requested 4.5 Bcf/d for deliveries to the California border or inside the state and a total of 51 requested 5.2 Bcf/d for deliveries to states east of California.

FERC has ordered a formal, non-public investigation into the “apparent disclosure” to The New York Times of documents that were supposed to be sealed and protected as part of the California regulators’ complaint case against El Paso Natural Gas and affiliates.

The Eastern Gulf of Mexico Sale 181, which covers an area about 64 miles offshore Louisiana, 15 miles offshore Alabama and at least 100 miles offshore Florida, is still on track for December, Interior Secretary Gale Norton said last week — even though her boss President Bush and his brother, Florida Gov. Jeb Bush, have voiced opposition to opening up Florida’s coast for drilling.

Spring is not the only thing currently in the air, as merger and acquisition activity continues at the rapid pace set during 2000. Midland, TX-based Pure Resources Inc. and Denver, CO-based Hallwood Energy Corp. announced they have signed a definitive merger agreement in which subsidiary Pure Resources II will acquire all of the outstanding shares of Hallwood common stock at a price of $12.50/share.

Downplaying the current struggle to boost gas supply enough to meet rapidly growing gas demand, officials at the Potential Gas Committee (PGC) last week instead highlighted the slow and steady growth of the resource base in the U.S. Canada and Mexico, and the need for fewer government restrictions on land access and exploration and production.

Bidding is expected to be high for two Minerals Management Service Gulf of Mexico sales this summer, one that focuses on a region of the Central Gulf that has been a no man’s land for exploration and production, and another in the Western Gulf. Part of the attraction will be the added incentives for drillers, which MMS is using to increase domestic oil and gas production.

With the FERC-ordered capacity re-assignments at the Topock, AZ, delivery points barely off the ground, El Paso Natural Gas has proposed a new plan to re-allocate shippers’ receipt point rights across its entire pipeline system in an attempt to further improve delivery and scheduling.

New York State Electric & Gas Corp.(NYSEG) last Wednesday took direct aim at a recent New York Independent System Operator (NYISO) report on the state’s power market, asserting, among other things, that it “unrealistically assumes” that 8,600 MW of new generation for the state can be built by 2005.