While New Englanders were burning heating oil-and lots of money-in midwinter, consumers of natural-gas heating were enjoying relatively stable prices. The newest Houston bumper sticker could read "Have you hugged your gas producer today?" Some of that gas is coming from Wyoming, which exploration editor Peggy Williams tells us is contributing increasingly bumper crops to U.S. supply. "Wyoming's natural gas production hit 1.2 trillion cubic feet in 1998; that was the most produced in the state's history," Williams writes in this month's cover story, "Wyoming." "All indications are that 1999 gas production will continue the upward trend." Wyoming gas production economics have improved during the past decade, basis differentials have eased, and Wyoming's pipeline web has expanded, creating greater access to national markets, she reports. More than 80% of the permits issued for Wyoming gas exploration in 1999 target ultra-shallow coalbed methane gas reservoirs, mainly in the Powder River Basin, she adds. One of those producers is Denver-based Pennaco Energy, which senior financial editor Brian A. Toal profiles in "A New Power in the Powder." In 1999, the company drilled 418 net wells in the Powder River coalbed methane play, growing its reserves during 1999 to 90 billion cubic feet, from 18.1 Bcf, and more than tripling its net daily production to 37 million cubic feet. And it did this for less than 17 cents per thousand cubic feet, Toal writes. The company is among those clearly focused on its niche-an attribute that would receive the approval of G. Warfield (Skip) Hobbs, guest author of "Searching for Exploration Success" and managing director of Ammonite Resources, a Connecticut-based petroleum consulting firm. Hobbs writes that, based on the firm's research, E&P companies with consistent success have some attributes in common, including a focused strategy leveraged by some kind of competitive advantage. "Note the key word 'consistent.' Even fools are sometimes blessed by luck," he adds. Helping to separate the fools from the flotsam is software, according to editor Leslie Haines, in "Digitizing Decision-making." "If a company has $100 million to spend and a portfolio of 65 projects, and management seeks a net present value of $200 million, which combination among the 65 choices will yield the desired result...?" Haines asks. More and more executives are asking their computers, through decision-making software. And as for questions about the 1999 and 2000 M&A market, those are answered by guest authors Ken Dewey and Gregg Jacobson of Randall & Dewey, the Houston-based M&A specialists. It was a buyer's market last year, and it remains so now, they report, in "Powder Check," which is followed by Oil and Gas Investor's biannual list of large U.S. M&A deals. Apache Corp. is prominent on the list. Dewey and Jacobson say the Houston E&P firm's return to the M&A market is a sign it is time to buy, if one can get the financing. That bumper sticker would read "Have you hugged your capital provider today?" -Nissa Darbonne, Managing Editor
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