Offshore update ///

Natural gas market swings. Anyone connected with gas drilling in the U.S. knows about the market swing from $10/Mcf in January 2001 to $2/Mcf in January 2002, and the resulting major drop in active rigs. Speaking on this subject at Cambridge Energy Research Associates’ (CERA) annual conference in Houston, February 11 – 15, R. Skip Horvath, President of the Natural Gas Supply Association (NGSA) said, "We should not mistake the calm in today’s natural gas prices as anything more than the low side of our normal business cycle. There are two features to the production business cycle that are important: first, since the early 1990s, each price increase and decrease has been a little higher than the previous cycle. Second, the high-low price spread has increased. Both these trends underscore the underlying volatility.

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