The natural gas pipeline partnership of Williams has agreed to buy the company's Canada operations in Alberta for $1.2 billion. The assets include an oilsands off-gas processing plant near Fort McMurray, 260 miles of natural gas liquids (NGL) and olefins pipelines, and a NGL/olefins fractionation facility at Redwater. Williams Partners LP also is buying an expansion project underway at the Redwater facility. The operating results are expected to contribute distributable cash flow to the partnership of $135-160 million during the remaining 10 months of 2014, and $200-240 million in 2015. Williams owns 64% of the partnership.
Vancouver-based Terrace Energy Corp. has reached an agreement to acquire and develop acreage in Zavalla and Dimmit counties in South Texas in an area that has seen "highly successful" discovery wells in the emerging Buda Limestone formation. Terrace struck a farm-in agreement for a 75% working interest (WI) in several leases that cover 10,000 gross (6,700 net) acres. The company has the opportunity to drill a series of earning wells to test the Buda formation. Each well will secure a 75% WI and a 56.25% net revenue interest in a 640 acre production unit. The company has the option to secure additional production units by drilling additional earning wells each within 120 days from the completion date of the previous earning well. Each production unit may contain up to seven additional drilling locations. The project acreage is in the core of the Eagle Ford trend and is near a number of prolific horizontal wells drilled into the naturally fractured Buda Limestone, Terrace said. "We believe the Buda Limestone formation, which is also present on our Maverick County Project, is highly prospective and will be a core focus for our company as we implement our growth model in South Texas," said CEO Dave Gibbs.
Oklahoma City-based American Energy-Woodford LLC (AEW), an affiliate of American Energy Partners LP (AEP), has raised $500 million in equity commitments and secured $180 million in bank borrowings to acquire assets in the Woodford Shale/Mississippi Lime combination play in central and northern Oklahoma, an area that AEW has named the CNOW play. AEW's exclusive private equity investor is The Energy & Minerals Group; additional equity commitments have been provided by AEW management and others. Financing proceeds will initially be used to acquire approximately 120,000 net acres of leasehold and approximately 6,000 net boe of daily production in the CNOW play with the goal of establishing a leasehold position of up to 200,000 net acres over time. AEW is acquiring the assets from Calyx Energy LLC; Calyx Energy II LLC; Liberty Energy LLC; and Truevine Operating LLC. AEP was founded by former Chesapeake Energy Corp. CEO Aubrey McClendon (see Shale Daily, Jan. 29).
A Halliburton Co. subsidiary will pay $1.8 million in state fines for violating Pennsylvania's Solid Waste Management Act, but it will not face criminal charges as some had called for in 2012, according to the Pennsylvania Attorney General'soffice. Halliburton Energy Services signed an agreement saying it would pay the Pennsylvania Department of Environmental Protection's (DEP) fine and not appeal the agency's findings (see Shale Daily, Feb. 20). The DEP cited Halliburton for committing 255 violations related to the treatment, storage and disposal of drilling waste at its facility in Indiana County, PA. The DEP asked the attorney general's office to conduct a criminal investigation last year, but a spokesman for Attorney General Kathleen Kane said the office's review showed no cause for such action. No further explanation was offered. Environmental groups had also pushed for a criminal investigation. The attorney general's latest decision marks the second time the office has decided not to pursue criminal charges since the DEP learned of the violations in 2011.
Producers interested in developing oil and natural gas resources offshore the South Atlantic and Mid-Atlantic coast received promising news from the Bureau of Ocean Energy Management (BOEM), which Thursday issued a final review of mitigation measures to protect marine life before seismic and other types of surveys are performed in the region. The Interior Department agency's final environmental review of geological and geophysical (G&G) survey activities off the Atlantic Coast establishes "multiple mitigation measures" and a path to take surveys that would update data almost 40 years old on offshore energy potential. The preferred alternative in the programmatic environmental impact statement (PEIS) identifies the "most protective mitigation measures and strongest safeguards" to reduce or eliminate impacts to marine life. "Our scientific knowledge of the Atlantic Ocean is constantly building, and new information and analyses will continue to be developed over time, which is why we are employing a comprehensive adaptive management strategy that takes this into account," said BOEM Director Tommy Beaudreau. "As the PEIS does not by itself authorize any G&G activities, the site-specific reviews will incorporate any significant new information available after the PEIS is published."
Pennsylvania's Public Utility Commission has approved a $75 million UGI pilot program designed to connect to new natural gas main extensions residential and small business customers that do not currently have access to gas service. The Growth Extension Tariff (GET Gas) will allow customers to pay a monthly surcharge, avoiding significant up-front cost, when connecting to a new natural gas main extension, UGI said. The surcharges will remain fixed over a 10-year period and will remain with the service location if a customer moves. Areas served under the program must meet certain minimum economic requirements, including their proximity to existing gas mains and population density, in order to qualify. UGI plans to fund the pilot program at an annual level of $15 million a year for five years, in addition to the more $40 million it spends each year to extend natural gas service to new customers. The Reading, PA-based company expects that the GET Gas program will be available to customers by early fall.
The 11-year-old Na Kika platform in the deepwaters of the Gulf of Mexico (GOM) has ramped up the third phase of its program, with one well in operation and a second scheduled within the next few months, operator BP plc said Monday. Royal Dutch Shell plc owns a half-stake in Na Kika, a massive development in Mississippi Canyon Block 474 that initially ramped up in late 2003 (see Daily GPI, Dec. 3, 2003). The development, about 140 miles south of New Orleans, includes four jointly owned fields now in operation, as well as various three-party producer fields that feed into the platform. Phase three is BP's third new upstream project to begin operation this year, following the Chirag Oil startup in Azerbaijan and the Shell-operated Mars B project also in the deepwater GOM (see Daily GPI, Feb. 4). BP now has 10 operating rigs in the deepwater GOM, a record for the company and the U.S. offshore.
The American Public Gas Association (APGA) has asked the Commodity Futures Trading Commission (CFTC) to look into a 10% price spike in the February New York Mercantile Exchange (Nymex) Henry Hub contract during the final hours of trading on the contract Jan. 29. The 52.4-cent jump for natural gas for February delivery that drove the Nymex price to $5.557/MMBtu -- the highest closing price at the time since Jan. 25, 2010 -- was the largest one-day percentage gain since June 14, 2012, APGA said in a letter sent to CFTC Acting Chair Mark Wetjen. "APGA believes it is important that the CFTC review the trading activities to ensure that natural market forces, and not excessive speculation or other market abuses, were the causes for the 10% price spike in the February 2014 Nymex Henry Hub contract that occurred in the final hours of trading. While the weather may have been particularly cold at that time, APGA questions whether cold weather can fully account for the 10% price spike," the organization said in its letter.
What would be the nation's first floating liquefied natural gas (FLNG) export terminal could be operational in the fourth quarter of 2018, developer Excelerate Energy LP said in conjunction with its FERC filing for the Lavaca Bay LNG Project. "The filing represents a major milestone and further strengthens project momentum as we head towards a final approval," said Excelerate CEO Rob Bryngelson. "We continue to make strong progress on all fronts and hope to make a final investment decision within the next 12 months." Excelerate has been granted permission to export to free trade agreement (FTA) nations by the U.S. Department of Energy (DOE) and filed for non-FTA approval in October 2012 (see Daily GPI, Aug. 14, 2012). The company is fourth on the list of applications DOE is currently processing. The project was announced earlier in 2012 (see Daily GPI, May 16, 2012).