In its final assessment of destroyed and damaged facilities from hurricanes Gustav and Ike, the Minerals Management Service (MMS) Gulf of Mexico (GOM) staff estimated that 2,127 production platforms were exposed to winds that were higher than 74 mph. MMS, which coordinated its assessment with oil and natural gas operators, noted that as of August, there were more than 3,800 production platforms in the GOM; these structures range in size from single well caissons in water depths of 10 feet to a large complex facility in water depth more than 7,000 feet. Final results of the assessment indicate that 60 platforms were destroyed as a result of the two hurricanes. The destroyed platforms produced 13,657 b/d of oil and 96.5 MMcf/d of gas, or around 1.05% of the oil and 1.3% of the gas produced daily in the offshore. MMS also confirmed that 31 platforms with extensive damage may take three to six months to repair. In addition, 93 platforms suffered moderate damage, which may take one to three months to repair. Information on the assessment is available at www.mms.gov.
Questar Corp. subsidiary Questar Exploration and Production (E&P) Co. completed the company's first operated Haynesville Shale horizontal wells in northwest Louisiana. The Waerstad #3, located in Red River Parish, was placed on production at an initial rate of 16 MMcf/d on a 23/64-inch choke with 6,400 pounds per square inch (psi) flowing casing pressure. Eight fracture stimulation stages were pumped in the 3,234-foot horizontal lateral. Questar E&P has a 100% working interest in the Waerstad #3 well. The Wiggins 36H- #1, located in Bienville Parish, was placed on production at an initial rate of 7.4 MMcf/d on a 22/64-inch choke with 5,450 psi flowing casing pressure. Nine fracture stimulation stages were pumped in the 3,455-foot horizontal lateral. Questar E&P has a 62% working interest in the Wiggins 36H- #1 well. The E&P unit also is drilling two additional company-operated Haynesville horizontals and is participating in four other wells that are in various stages of completion. Questar E&P has 31,000 net acres of leasehold in the Elm Grove, Woodardville and Thorn Lake areas of the northwestern part of the state.
The Florida Association of Convention and Visitors Bureaus, which has long opposed offshore drilling, conditionally endorsed federal and state policies allowing the production of oil and natural gas from existing leases within the Gulf of Mexico at least 30 miles from the Florida coastline. The conditions include: Florida offshore drilling must be a component of a comprehensive energy policy; production facilities must incorporate the most advanced zero-discharge systems; Congress must allow for sharing of royalties between states and the federal government; a five-year moratorium on new leases in the eastern Gulf must be established so state officials can evaluate production safety and evaluate any impact on Florida's natural resources; and the military mission of the Defense Department shall have the first priority in the Gulf offshore.
Denver-based Forest Oil Corp. has completed the previously announced sale to undisclosed buyers for some of its Rocky Mountain assets, which include acreage in the Niobrara and San Juan basins and various properties in Wyoming and Utah. Forest received cash proceeds of $200 million. Following the sale, the producer's bank syndicate reaffirmed the borrowing base available under the credit facility at $1.8 billion. Forest estimates 4Q2008 production will average 568-583 MMcfe/d, reflecting the loss of one month of output from the assets that were sold.
Northwest Natural Gas Co. (NW Natural) said it has filed a stipulated agreement with the Oregon Public Utility Commission (OPUC) to create a consolidated natural gas pipeline system integrity program (SIP). The SIP would integrate older programs into a single program and provide customers with enhanced safety and system reliability. It is subject to approval by the OPUC. Parties to the stipulation are NW Natural, OPUC staff, the Citizens' Utility Board of Oregon, and the Northwest Industrial Gas Users. Previously implemented separately, NW Natural's bare steel and transmission integrity programs are requested to be approved as a single program by the OPUC. The SIP also includes a component for a distribution integrity management program, which would be implemented following issuance of new federal regulations. NW Natural said costs would be tracked annually, with recovery to be sought after the first $3.25 million of capital costs incurred. An annual cap for expenditures would be approximately $12 million, with any extraordinary costs above the cap to be approved by all parties. If approved, the settlement will apply to costs incurred during the period from Sept. 30, 2008 to Oct. 31, 2011, or until the effective date of new rates adopted in the company's next general rate case.
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