Newfield Exploration Co. has signed another joint venture agreement with ExxonMobil Corp., this one to explore and develop 87,000 gross acres in South Texas that will target the prolific Vicksburg Trend. Newfield, which will equally participate with ExxonMobil in the venture, said it expects to have an active drilling program in the area over the next three years. Newfield, which owns interests in about 482,000 gross lease acres in South Texas, has been active in the region since 2000. Current net production from the region is 230 MMcfe/d. The latest agreement covers properties in Kenedy, Brooks and Hidalgo counties, which complements Newfield's existing activity areas. Expenditures associated with the South Texas drilling program are estimated at $245 million, or about 15% of Newfield's 2008 capital budget. Newfield has an existing joint venture agreement with ExxonMobil, also in South Texas. The existing agreement covers the Sarita Field area of Kenedy County, where Newfield expects to drill 10-12 additional wells this year (see NGI, Feb. 11).
The Minnesota Court of Appeals said the state's utilities regulator has to reconsider its decision to block CenterPoint Energy from recovering $21 million from customers that it underbilled over four years. The 21-page opinion issued last week by the four-judge panel reversed and remanded a decision by the Minnesota Public Utilities Commission (MPUC) in Case A07-0653; File Nos. E, G-999/AA-05-1403, G-008/AA-05-1423 (Northern Area), G-008-AA-05-1424 (Viking Area). CenterPoint informed the MPUC in January 2006 that an internal accounting process had overstated sales of natural gas between 2000 and 2005. CenterPoint said it misstated sales in two ways: it mistakenly recognized sales for gas that was lost, and it mistakenly recognized underbilled sales (i.e., sales that were billed to customers in the future). About 80% of the revenue CenterPoint receives from customers is attributed to the costs incurred in obtaining gas from suppliers, the court noted. The accounting error resulted in CenterPoint failing to recover $28 million in costs for natural gas delivered to Minnesota customers over the period. The MPUC allowed CenterPoint to recover one year of the underbilling, but it denied the utility's request for a variance to the MPUC rules to recover the remaining amount because the agency said it was not in the public's interests.
Western Gas Partners LP, the midstream partnership formed last year by Anadarko Petroleum Corp., had a modest debut Friday, opening and closing at the same price: $16.50/unit. Anadarko had expected the offering of 18.8 million units to be priced between $17 and $19, which was down from last year's estimate of $20-22/unit. Anadarko announced the spin-off last October (see NGI, Oct. 22, 2007). Based on the IPO, Western Gas now expects to raise about $309 million before expenses. The offering is expected to close by Wednesday (May 14). In a Securities and Exchange Commission filing last year, Anadarko said Western Gas assets initially would include in East Texas, 636 miles of gathering and treating miles, 780 receipt points, 29,305 hp compression, 510 MMcf/d in treating capacity, and 320 MMcf/d average throughput; in the Rocky Mountains, 114 miles of gathering and treating, 162 receipt points, 20,385 hp compression, 92 MMcf/d treating capacity and 57 MMcf/d average throughput. There also are 264 miles of transport pipe, with 18 receipt points, 27,326 hp compression and 1,209 MMcf/d average throughput. In the Midcontinent, Western Gas would hold 1,752 miles of gathering lines, 1,495 receipt points, 130,720 hp compression, 120 MMcf/d average throughput. In West Texas, it would hold 79 miles of gathering lines, 48 receipt points and 192 MMcf/d average throughput.
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