The Minerals Management Service (MMS) released a proposed notice for Central Gulf Lease Sale 198 on Tuesday, estimating potential production from the acreage of 276-654 million bbl of oil and 1.59-3.3 Tcf of gas. The lease sale, which is scheduled for March 15, 2006, will encompass about 4,000 unleased blocks covering 21 million acres in the Central Gulf of Mexico Outer Continental Shelf planning area offshore Louisiana, Mississippi and Alabama. Recently revised special provisions for the sale include the following: Deepwater royalty relief lease terms specified in the Energy Policy Act of 2005; Shallow-water deep-gas royalty relief for leases in water depths of zero to less than 400 meters (relief in the recent Western Gulf sale was in the zero to less than 200 meter range). In addition, this sale will provide an increase in the royalty suspension volumes from 25 BCF to 35 BCF for successful shallow-water wells drilled 20,000 feet or deeper; This will be the first Central Gulf sale with the higher rental rates that were implemented in August 2005; A newly developed stipulation regarding limitations on use of the seabed and water column in Mississippi Canyon Block 118 because of an ongoing federally funded University of Mississippi study of gas hydrates; A new Information to Lessee (ITL) clause that relates to ongoing U.S. Coast Guard reviews of the Gulf Landing LNG project; and an earlier time deadline for Electronic Fund Transfer (EFT) rental payments associated with this sale.
Houston-based Dune Energy Inc. has acquired interests in about 320 acres of oil and natural gas leases and four producing wells in Denton County, TX for $5.4 million, and another parcel of properties in Denton and Wise counties from Voyager Partners Ltd. for $68.3 million. All of the assets are located in the Barnett Shale region, near Fort Worth. Closing on the assets is expected by Dec. 15. A reserve report as of Dec. 31, 2004, prepared by independent petroleum engineering firm DeGolyer & MacNaughten, indicated there are 27 Bcfe of net proved reserves underlying the Voyager properties. Since that date, based upon an internal evaluation, Dune believes Voyager has added as much as an additional 18 Bcfe in proved reserves to the properties being acquired, bringing the total to 45 Bcfe. Dune also set up a credit agreement, which provides for a revolving credit commitment of up to $50 million with sub-limits of $13 million, and $16 million, respectively, for term loans, subject to certain covenants and conditions. Additional financing totaling $25 million of subordinated debt is also in place. The company has drawn down a $6 million revolving loan under the agreement in connection with the purchase of some of the Barnett Shale assets. Dune's operations are concentrated onshore the Louisiana/Texas Gulf Coast as well as the Barnett.
Because of the rise in the cost of wholesale natural gas, Missouri Gas Utility Inc. has been approved to increase its gas rates about 28%. The rates took effect on Monday (Nov. 21), according to the Missouri Public Service Commission (MPSC). The utility serves about 740 customers in the state. Residential customers paid 72 cents per 100 cubic feet of gas last winter, and under this filing, the rate will increase to about 93 cents. Last winter, residential customers paid about $662 total over the winter months, and with similar winter conditions, customers will pay about $845 this year. The MPSC conducts annual regulatory reviews to ensure regulated gas companies make prudent decisions in securing supplies for their customers.
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