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Spectra Energy Partners LP has completed its previously announced acquisition of the equity interests of Saltville Gas Storage Co. LLC and the P-25 pipeline from Spectra Energy Corp. The $107 million price paid to Spectra Energy Corp. consisted of 4,207,641 newly issued common units and 85,870 newly issued general partner units of Spectra Energy Partners, along with a cash payment of $4.65 million. With this issuance, Spectra Energy Corp. now owns 82% of Spectra Energy Partners' outstanding common and subordinated units and a 2% general partner interest. Spectra Energy Partners said it expects the transaction to be immediately accretive to earnings and cash available for distribution on a per-unit basis. Saltville owns three gas storage facilities adjacent to the East Tennessee Natural Gas (ETNG) system in southwestern Virginia. Two are high-deliverability salt caverns with a combined working capacity of 4 Bcf, and the other is a reservoir storage facility with 1.5 Bcf of working capacity. The P-25 pipeline is a 72-mile, eight-inch diameter gas pipeline that runs parallel to the ETNG system in Virginia. In February FERC gave Virginia-based Saltville permission to reduce total capacity at one of its high-deliverability fields in southwestern Virginia by approximately 2 Bcf and to cut working gas capacity by about 1.8 Bcf (see NGI, Feb. 25; Oct. 8, 2007). FERC issued a certificate for the project in mid-2004 (see NGI, June 21, 2004).

Houston-based Contango Oil & Gas Co. has purchased working interest in a pair of discoveries in the Gulf of Mexico (GOM), which have estimated proved reserves of 21 Bcfe and estimated proved plus probable reserves of 24 Bcfe, from two undisclosed sellers for a total of $100 million. The company also is ready to sell all of its interests in those discoveries, it said last week. Contango said it purchased an additional 4.17% working interest and 3.33% net revenue interest in the Eugene Island 10 (Dutch) discovery and an additional average 4.56% working interest and approximately 3.33% net revenue interest in the five State of Louisiana leases (collectively, Mary Rose). The deal increases Contango's working interest in Dutch to 47.05% with a net revenue interest of 38.12% and increases its average working interest in Mary Rose to 53.21% with an average net revenue interest of 39.00%. Contango said it now owns an estimated 254 Bcfe of proved reserves and 280 Bcfe of estimated proved plus probable reserves in Dutch and Mary Rose. The effective date of the transaction is Jan. 1, 2008. Simultaneous with the announcement of the acquisition, Contango said it is seeking proposals for the sale of its Dutch and Mary Rose discoveries. Earlier this year Contango closed the sale of its 10% limited partnership interest in Freeport LNG Development LP to Turbo LNG LLC, an affiliate of Japan's Osaka Gas Co. Ltd., for approximately $68 million (see NGI, Feb. 11). At that time the company said it had more than $150 million of cash on hand and planned to invest $109 million in a like-kind exchange for producing oil and gas assets.

Laramie Energy's plans to drill as many as 32 wells near Hightower Mountain in Mesa County, CO, will have "no significant impact" on the area's natural resources, according to Grand Mesa, Uncompahgre and Gunnison National Forest (GMUG) officials. A decision notice issued by GMUG last week authorized activities associated with natural gas exploration and potential production to be conducted at drilling locations and associated facilities. Laramie plans to drill at five locations and construct 4.9 miles of buried pipeline between drilling locations and a 1.4-acre compression station. A 278-page environmental assessment of the project released by GMUG last month found that the plan selected by GMUG would disturb approximately 85.5 acres during drilling location construction and pipeline installation, nearly 30 acres more than under Laramie's initial, above-ground pipeline proposal, but "the long term visual effects will be reduced by burying the pipeline." Laramie was formed in 2004 by Robert Boswell, the former chairman and CEO of Forest Oil Corp., and James Schroeder, former president of Mesa Hydrocarbons LLC. The company initially was funded by CSFB Private Equity and EnCap Investments.

Independent oil and gas exploration and production (E&P) company Sterling Energy is seeking to sell its U.S. oil & gas interests, the company said. Following "a comprehensive strategic review of the company's assets and prospects," London-based Sterling's board concluded that the U.S. business has grown to a size that makes it attractive to prospective buyers and it is in shareholders' best interests to sell the business, the company said. At the end of March Sterling's U.S. net production was a company record 32 MMcf/d. The company reported year-end 2007 U.S. proven and probable reserves of 111 Bcfe, approximately 65% of that amount proved reserves, with another 70 Bcfe of possible reserves. Sterling, which has interests in North America, Africa and the Middle East, said it has retained BMO Capital Markets to manage the sales process. Proceeds of any sale will be used to repay debt and provide funding to increase Sterling's assets in Africa and the Middle East. Since it was formed in October 2002, Sterling has built a portfolio of production assets in the Gulf of Mexico and offshore West Africa, and has an active exploration program focused predominantly on Africa. Sterling said its U.S. operations include a substantial inventory of low-risk development and exploration projects, primarily in the onshore Gulf Coast and shallow-water Gulf of Mexico. Last year Sterling acquired Whittier Energy Corp., an independent oil and gas E&P company with operations in Texas, Louisiana and Mississippi, for $188 million (see NGI, April 2, 2007). Last month Sterling announced a gas discovery from its Marlin #1 well. The well has since come onstream at initial rates of over 4.5 Mcfe/d net. An offset to this well is scheduled to be drilled in May. Other projects in South Texas, Southeast Texas and state waters offshore Texas, some of which have recently been farmed out, will be drilled in the near-term, the company said. Sterling is listed on the Alternative Investment Market of the London Stock Exchange.

Halifax-based Corridor Resources Inc. is holding a nonbinding open season through May 30 to solicit interest in its proposed Salt Springs Storage facility, which would be located near Sussex, NB. The facility would connect to the Maritimes and Northeast Pipeline system. Corridor holds a provincial underground storage exploration license to investigate development its 15,000-plus hectare leasehold, which contains the Salt Springs salt deposit. McCulley Field, Corridor's primary producing asset, is located on the leasehold. Salt Springs contains up to 2,200 feet of high-quality salt at depths ranging from 1,500 to 3,700 feet, and multiple caverns could be developed to store natural gas, liquefied petroleum gases (propane and butane), heating oil and crude oil, the company said. Details regarding the open season and an initial description of the proposed facilities and storage services to be offered may be found at www.corridor.ca.

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