XTO Energy Inc. has completed its $4.2 billion acquisition of privately held Hunt Petroleum Corp. and has updated its natural gas and oil hedges through 2010. Hunt, which agreed to the transaction in June (see NGI, June 16), sold XTO total estimated proved reserves of 1.05 Tcfe, 62% proved developed. Production was estimated at 197 MMcf/d of gas, 8,500 b/d of oil and 2,300 b/d of natural gas liquids. XTO paid Hunt $2.6 billion in cash and provided about 23.5 million shares of XTO common stock. About 70% of the acquired properties are in East Texas and in central and northern Louisiana where XTO has stepped up its exploration activities. Another 28% of the reserves, both onshore and offshore, are along the Gulf Coast of Texas, Louisiana, Mississippi and Alabama. Nonoperating interests, reflecting more than 300,000 net acres of potential in the North Sea and the balance of proved reserves, also were conveyed in the deal. In addition, XTO gained about 15,000 net acres of leasehold in the Bakken Shale region of North Dakota. In conjunction with the transaction XTO added gas and oil hedges through 2010. For gas XTO hedged through December 1.45 Bcf/d at $8.79/Mcf.; total gas equivalent hedged through December is 1.75 Bcfe/d at $10.06/Mcfe. XTO hedged 1.185 Bcf/d at $9.59/Mcf for 2009; total gas equivalent hedged is 1.515 Bcfe/d at $11.97/Mcfe. And for 2010 XTO hedged 300 MMcf/d at $9.50/Mcf; total gas equivalent hedged is 450 MMcfe/d at $13.57/Mcfe.
The Federal Energy Regulatory Commission approved North Baja Pipeline's proposal to build a lateral extending from a proposed interconnection at the United States-Mexico border near Yuma County, AZ, as well as issued a new presidential permit authorizing the importation of regasified liquefied natural gas (LNG). The proposed lateral would provide Arizona Public Service Co. (APS) with access to both regasified LNG from Mexico and domestic sources for use at the Yucca Power Plant as well as for the planned future power generation needs of APS. The order requires the lateral facilities to be placed in service within one year. Sempra Energy's North Baja line has executed a precedent agreement with APS for a term of 15 years to transport 81,250 Dth/d to the Yucca Power Plant. APS is planning to expand its generating capacity at the Yucca Power Plant by adding two gas-fired turbine units totaling 96 MW. The $8.5 million project calls for the construction of 3.27 miles of 12-inch diameter pipeline, extending from the international border at the Colorado River to the Yucca Power Plant. The U.S. lateral would lie entirely in Arizona. North Baja Pipeline requested that FERC act on its application quickly so that it can achieve its targeted in-service date of Jan. 1, 2009. A 3.14-mile-long Mexican segment would be constructed by Sempra's Gasoducto Bajanorte S. de R.L. de C.V., and would connect with the Gasoducto Bajanorte pipeline north of Algodones, Mexico, and extend to the international border.
Equitable Resources Inc.'s Equitable Midstream unit has launched an open season for expansion of its gathering and transportation systems within the Marcellus fairway from south-central West Virginia to Northwestern Pennsylvania. The expansion, called the Marcellus Eastern Access Hub, would provide incremental capacity, which will in turn help increase gas production, the company said. The expansion would also provide Appalachian producers with operational flexibility and access to additional storage capacity. Equitable said the Marcellus Eastern Access Hub would provide access to the premium markets in the Eastern and Mid-Atlantic states through interconnections with National Fuel Gas Supply and Tennessee Gas Pipeline in northwestern Pennsylvania, Texas Eastern, Columbia Transmission and Dominion Transmission in western Pennsylvania, and Columbia Transmission in central West Virginia. The move follows erroneous reports last month that Equitable Resources was pulling out of the Northeast Passage pipeline project. At the time the company said it merely has altered its game plan to get its Appalachian gas to market. The company initially was interested in the Northeast Passage project, which it and Tennessee Gas Pipeline planned to develop, as a vehicle to deliver its Kentucky gas to market. But Equitable has decided that it could meet that need with Tennessee's proposed 300 Line expansion. Equitable Resources said it is still interested in Northeast Passage as a possible vehicle to carry its Marcellus gas production from southwestern Pennsylvania and West Virginia. Equitable Midstream said it is now seeking nonbinding commitments from producers to help define the the Marcellus Eastern Access Hub expansion by identifying production access and firm delivery points. Bids are due by Sept. 30. The company noted that the first phase of the expansion is scheduled to be placed into service at year-end 2008, with the second phase beginning service in November 2011. Interested producers may contact Andy Murphy at (412) 395-3358 or firstname.lastname@example.org.
Gulfstream Natural Gas System LLC has placed into service the Phase III expansion of its its natural gas pipeline system in Florida. The expansion, which the Federal Energy Regulatory Commission approved for service in late August, extends Gulfstream's 691-mile pipeline by 34.3 miles from the line's terminus in Martin County, FL, to Palm Beach County. The 30-inch diameter expanded pipeline will provide firm transportation service for Florida Power & Light Co.'s (FPL) proposed greenfield power generation station, known as the West County Energy Center, in Palm Beach County [CP00-b-014]. FPL has executed an agreement for the entire expansion capacity (345,000 Dth/d) for a term of 23 years, according to Gulfstream. Under Gulfstream's agreement with FPL, 185,000 Dth/d is available immediately to supply FPL's initial fuel needs for the West County Energy Center. The full capacity of 345,000 Dth/d is expected to be available by June 1, 2009. In addition, Gulfstream said it plans to place in operation in the near term a Phase IV expansion of its system, which includes approximately 17.8 miles of 20-inch pipeline in Tampa Bay connecting the existing Gulfstream pipeline to Progress Energy's Bartow power plant in Pinellas County, FL. The Phase IV project, which also involves the installation of additional compression in Coden, AL, and Manatee County, FL, will provide 155,000 Dth/d to the Bartow facility, which has been converted from oil to gas.
Sempra Energy and the Mexican government have accomplished what California has been unable to do in siting Sempra's Energia Costa Azul liquefied natural gas (LNG) receiving terminal along the Pacific Coast of North Baja California, Mexico, Timothy Alan Simon told his fellow commissioners at the California Public Utility Commission (CPUC). The 1 Bcf LNG terminal, which cost nearly $1 billion, has only handled two test cargo shipments so far. Its gas output ultimately will serve power plants in North Baja and loads in the southwestern United States. Simon and California Energy Commission member James Boyd represented California at the recent terminal dedication. Simon said the facility is "generating a lot of excitement" in the weeks since it has begun operations. Simon said it gives the West "much needed access" to natural gas. "In an increasingly carbon-constrained world it is critical that we make prudent investments in facilities that will allow us to diversify our energy supplies and address a central resource and reliability needs, while reducing greenhouse gas [GHG] emissions. These are global issues that require concerted international policy development and implementation," Simon said.
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