Message-ID: <28904861.1075863438942.JavaMail.evans@thyme> Date: Mon, 20 Aug 2001 12:45:02 -0700 (PDT) From: j.kaminski@enron.com To: a..roberts@enron.com Subject: FW: GPCM News: 8/20/01: RBAC Finalizing Schedule in Houston: Oil Companies Find Output Targets Elusive: NG Futures Dip: Gulf Pines Pipeline Plan: NG Market Ponders Storage Report: Ziff Conference Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Kaminski, Vince J X-To: Roberts, Mike A. X-cc: X-bcc: X-Folder: \VKAMINS (Non-Privileged)\Kaminski, Vince J\Sent Items X-Origin: Kaminski-V X-FileName: VKAMINS (Non-Privileged).pst Mike, Take a look at the comment on AGA. Vince -----Original Message----- From: =09"Robert E. Brooks" @ENRON [mailto:IMCEANOT= ES-+22Robert+20E+2E+20Brooks+22+20+3Crebrooks+40earthlink+2Enet+3E+40ENRON@= ENRON.com]=20 Sent:=09Monday, August 20, 2001 11:51 AM To:=09'GPCM Distribution' Subject:=09GPCM News: 8/20/01: RBAC Finalizing Schedule in Houston: Oil Co= mpanies Find Output Targets Elusive: NG Futures Dip: Gulf Pines Pipeline Pl= an: NG Market Ponders Storage Report: Ziff Conference RBACFinalizing Schedule in Houston =20 Bob Brookswill be in Houstonnext week from Tuesday, August 28 through Thurs= day, August 30. A few time slots are available on Thursday the 30th in the= late morning and early afternoon. Please contact Bob at 323-663-4831 or b= y e-mail at rebrooks@rbac.com if you would like to schedule an appointment= . =20 From http://www.enerfaxgold.com : =20 Oil Companies Find Output Targets Elusive =20 Big oil companies are failing to meet production growth targets because= =20 they are using up mature fields faster than they can find and develop big= =20 enough new ones to replace them, according to analysts. ExxonMobil, Shell,= =20 and Chevron have all missed output targets, despite the incentive of two=20 years of high oil prices. ExxonMobil planned a 3% annual growth target last= =20 year but its output for the second quarter of 2001 was flat versus a year= =20 ago. Shell reported that its 2nd quarter production increased by only 1%,= =20 well short of the 5% target. Depletion from existing oil fields runs at an= =20 average rate of about 5% per year, and that has to be replaced by an=20 equivalent amount of new production just to keep output steady. From 1998 t= o=20 2000 the six biggest publicly traded companies largely failed to replace th= e=20 oil and natural gas they produced with new reserves, after stripping out th= e=20 effect of acquisitions and revisions, according to Andersen management=20 consulting. BP posted one of the best performances, replacing 200% of its= =20 natural gas production and 86% of its oil. Shell replaced only 42% of its= =20 natural gas and 55% of its oil, according to Andersen. BP has set the most= =20 ambitious production growth target of 5.5% for this year up 7% for the long= er=20 term. =20 From http://www.enerfax.com (Sunday, August 19, 2001): =20 Natural Gas Futures Dip Lower Natural gas futures for September delivery on the NYMEX dipped $0.064 l= ower Friday to $3.303 per MMBtu as traders squared short positions now that= Tropical Storm Chantal will miss the GulfCoast. The October contract lost = $0.081 to $3.334 per MMBtu. Tropical Storm Chantal will affect the YucatanP= eninsulaearly this week and then move into the central Gulf but is a noneve= nt. Some traders wanted their positions cleared in preparation for next wee= k's AGA storage report as they do not trust last week's reported build of j= ust 3 Bcf, and believe that the AGA may report a higher build this week to = compensate. A lot of traders got burned by last week's report and are begin= ning to doubt the whole system. But, others look at the data as just a one-= week blip brought about by a crescendo of events that no longer exist and d= o represent not a long-term shift. However, if Wednesday's AGA injection is= low again this week, look for the market to rally to a higher level, but i= n the meantime it will be controlled by the storm entering the Gulf of Mexi= co. Look for support in the $3.15-$3.20 range and again at $3.00. Resistanc= e is pegged at $3.40 and again around $3.60. Natural gas for next day deliv= ery across the USand Canadawas generally $0.10 - $0.20 lower Friday. Natura= l gas for next day delivery at the Henry hub dropped $0.20 to $3.24 per MMB= tu. =20 Gulf South Hold Open Season for Gulf Pines Pipeline=20 =20 Gulf South Pipeline is planning to build a pipeline extending from Mobi= leBayto North Carolinaif it receives enough interest. An open season for ca= pacity on the Gulf Pines Pipeline is being currently being held. Gulf South= Pipeline, formerly Koch Gateway Pipeline, is owned by Entergy-Koch. If com= pleted, Gulf Pines would be 600 - 700 miles long, and would extend through = Georgia, South Carolinaand North Carolina. Anticipating an in-service date = of summer 2004, Gulf South is soliciting binding and non-binding bids for c= apacity on Gulf Pines through September 19th. The pipeline would offer an i= nterconnection with Gulf South near MobileBay, allowing customers to source= supply from Texasand Louisianaas well as from MobileBay. The Gulf South sy= stem also offers links to major storage and supply hubs. =20 Gas Daily reports this proposed pipeline may have a capacity of 1 bcf per d= ay. It also gives the following website for additional information: http:= //www.gulfpinespipeline.com . =20 Natural Gas Market Ponders Storage Report =20 While some were questioning the accuracy of this week's astonishingly l= ow natural gas storage report, others blamed Tropical Storm Barry and highe= r demands from new power generation load. However, both the futures and cas= h markets jumped. Futures closed up $0.374 the day the report was announced= , and the cash market rose $0.20 - $0.40 the day after. Some chose to not b= elieve the 3 Bcf storage fill reported by the AGA, chalking it up to bad da= ta. The average amount injected during a week in August is over 60 Bcf. The= prior week's fill was 80 Bcf. Factoring in Barry and the prolonged heat wa= ve that week, the market had been expecting a somewhat lower number, but al= l had predicted something above 50 Bcf. There are various reports and theor= ies. Buyers for northeastern utilities said they had all injected and were = shocked by the minus 12 Bcf storage number reported for the East. They coul= d not entirely dismiss it, however. They noted that in the last 4 years all= the new plants that have been built are natural gas only facilities. Last = week could have been a good indication of what that could mean to the marke= t. The AGA says they checked and re-checked when they came up with the unbe= lievable number. The AGA's numbers have always lined up with the more exten= sive EIA reports. It is possible that a number of factors came together all= at once, with the impact of Barry on production and an higher generation l= oads because of Eastern heat wave. However, the curve in the cash market ha= s been going down. That may mean that if there is a market opportunity to m= ove volumes from storage to a consumer right now, that could be done, assum= ing 4 or 5 weeks later it could be replaced at the same price or maybe even= less. Also, there is speculation that the pipelines were re-packing their = lines with volumes out of storage because of a sudden draw down. =20 Ziff Energy Group to Hold Conference In Portland =20 Current Realities, Future Expectations Pacific NorthwestGas Strategies Conference October 2,2001Portland,Oregon(at the Hilton Portland) Hear Commissioner Wilson Condon, State of Alaska, describe how Alaskagas su= pply will energize the Pacific Northwestsupply portfolio. And let Joe Marus= hack, VP, ANS Gas Commercialization for Phillips Alaska, tell you about the plans to make these supplies a reality. Get additional gas supply updates from Art Eastly, President & CEO, Canadia= n Forest Oil Ltd. (NWT) and Lanny Outlaw, President & CEO, Western Gas Reso= urces (Rockies). Our keynote speaker on transportation will be Michael Stewart, Executive VP= ,Westcoast Gas Pipeline. Also discussing pipeline expansions will be: Peter= Lund, PG&E Transmission, NW; Kirk Morgan, Williams Gas Pipeline West; Dona= ld Zinko, Colorado Interstate Gas; and Randy Jespersen, BC Gas Utility Ltd. You'll also have an opportunity to hear the latest on Questar's new salt ca= vern storage facility - available to the PNW - from Questar's Gary Schmitt. Find out views on future demand growth in the PNW from keynote speaker Dick= Reiten, Chairman & CEO, NW Natural. Hear how the Bonneville Power Administ= ration plans to reconnect with its supply contracts from Acting Administrat= or & CEO, Steve Wright. Also hear what Paula Pyron, Executive Director, NW = Industrial Gas Users, has to say about her constituents' needs. For more information please visit: http://www.ziffenergyconferences.com call 1-800-853-6252, or email us at gasconference@ziffenergy.com=20 =20 Bob Brooks GPCM Natural Gas Market Forecasting System http://gpcm.rbac.com