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CNBC: Energy Roundup: Oil on Holiday

08 Oct 2007 | 12:29 PM ET

NEW YORK (AP) – The following is a summary of top stories in the energy sector at midday Monday.

Energy Futures Down in Low Volume Trading Energy futures fell in quiet holiday trading as investors, questioning whether oil will keep surging to new highs, decided to cash in some of their recent profits.

Trading volumes were low as many traders were off for Columbus Day in the U.S. and for a national holiday in Japan.

Light, sweet crude for November delivery fell $1.98 to $79.24 a barrel on the New York Mercantile Exchange. Gasoline for November lost 4.93 cents at $2 a gallon, while Nymex heating oil gave up 5.87 cents at $2.1648 a gallon.

Natural gas futures for November delivery fell 4 cents to $7.033 per 1,000 cubic feet.

At the pump, gasoline prices slipped 0.3 cent overnight to a national average price of $2.767 a gallon, according to AAA and the Oil Price Information Service. Prices remain nearly 50 cents higher than one year ago, and nearly 50 cents below their May peak of $3.227 a gallon.

Edge Petroleum Cuts Production Forecast Independent energy company Edge Petroleum Corp. lowered its production forecast for the third quarter and full-year because of problems at several drilling sites.

For the third quarter, the company now expects to produce 6.1 billion to 6.3 billion cubic feet of natural gas equivalent, down from prior estimates of 6.7 billion to 7.1 billion cubic feet.

For the full year, the company forecast production of 24.7 billion to 25.3 billion cubic feet of equivalent, versus a previous estimate of 26 billion to 27 billion cubic feet.

Edge blamed drilling problems and temporary suspensions in Texas, Mississippi, and Arkansas. The company operates onshore along the Gulf Coast from South Texas to Mississippi and in the Permian basin of West Texas and New Mexico.

BHP Billiton’s Genghis Khan Starts Producing Australian minerals and oil company BHP Billiton Ltd. began producing oil from a deepwater site in the Gulf of Mexico which it acquired in February.

The company paid $533 million for a 44 percent stake in what is known as the Genghis Khan development, a joint venture with Hess Corp. and Repsol YPF SA. The site, located about 4,300 feet below sea level, sits about 120 miles off the Louisiana coast.

BHP Billiton said drilling has already started on a second well nearby, with two more wells to follow. Genghis Khan is one of three deepwater sites the company is developing in the Gulf. It plans to begin production at the other two fields — Atlantis and Neptune — by the end of the year.

BHP Billiton eventually hopes to produce a total of 100,000 barrels of oil from the region per day. For 12 months through the end of June, the company produced the equivalent of about 12,000 barrels per day in the area.

Ormen Lange Field off Norway Opens The European Union welcomed the opening of a major natural gas field off the coast of Norway, which should help reduce dependence on Russian energy supplies in Western Europe.

The Ormen Lange field is jointly owned by Norway’s Petoro, Norsk Hydro, Norsk Shell, Statoil, DONG Energy and Exxon Mobil. Gas reserves are estimated at 11.12 trillion cubic feet.

When fully operational the field could supply one-fifth of the U.K.’s gas supplies for up to the next 40 years.

China Shenhua Energy is Biggest Domestic IPO China Shenhua Energy Co., the country’s biggest coal miner, raised a record 66.6 billion Chinese yuan or $8.9 billion in the country’s largest domestic initial public offering.

Shenhua’s 1.8 billion yuan-denominated shares attracted a record number of IPO subscriptions and were priced at 36.99 yuan or $4.92 each, the top of their indicative range.

The shares begin trading Tuesday on the Shanghai Exchange. Shenhua Energy already trades on the Hong Kong exchange.

Shenhua’s IPO constitutes 9 percent of the listed unit’s capital. Its offering topped China Construction Bank’s IPO late last month, which raised 58.05 billion yuan or $7.7 billion, the previous record for a mainland IPO.

–Compiled by AP Business Writer Greg Stec. Questions or comments can be directed to [email protected].

Copyright 2007 Associated Press. All rights reserved.

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