BP America Inc. has discovered oil and gas at its Freedom Prospect, also known as the Gunflint prospect, in the deepwater Gulf of Mexico (GOM). The well, located 70 miles southeast of the Louisiana coast in Mississippi Canyon Block 948, is in about 6,100 feet (1,860 meters) of water. The Freedom well was drilled to a total depth of 29,280 feet (8,927 meters) and encountered more than 550 net feet of hydrocarbon-bearing sands in Middle and Lower Miocene reservoirs. Appraisal will be required to determine the size and commerciality of the discovery. The Freedom well is BP’s third discovery in this part of the deepwater GOM following its Tubular Bells and Kodiak discoveries. The well is operated by BP Exploration & Production Inc., a subsidiary of BP America Inc., which has a 25% working interest, and includes co-owners Noble Energy Inc., with a 37.5% working interest, Samson Offshore Co., with a 25% stake, and Marathon Oil Co., which has a 12.5% stake. The lease was acquired by Noble Energy and Samson Offshore in March 2006.

XTO Energy Inc. updated its price hedges for future sales of natural gas and oil production through 2010. The hedges are in the form of swaps with no fall-away provisions, according to CEO Bob R. Simpson. Through October, XTO hedged 1,480 MMcf/d at a New York Mercantile Exchange price of $8.78/Mcf. For November and December, 1,530 MMcf/d was hedged at a price of $8.70/Mcf. XTO hedged 1,200 MMcf/d for $9.42/Mcf for 2009, and 400 MMcf/d was hedged at $8.81/Mcf for 2010.

The public utilities commissions of New Hampshire and Maine have both approved Unitil Corp.’s proposed acquisition of Northern Utilities Inc. and Unitil’s financing plans for the transaction. Regulatory approval is pending in Massachusetts. In February Unitil agreed to purchase Northern Utilities and Granite State Gas Transmission Inc. from NiSource Inc. for $160 million plus an estimated $25 million for natural gas storage inventory and other working capital items (see Daily GPI, Feb. 20). Six months later, Unitil filed settlement agreements with the utility regulators in Maine and New Hampshire for the proposed acquisition (see Daily GPI, Aug. 28). Northern Utilities is a natural gas distribution utility serving 52,000 customers in 44 communities in Maine and New Hampshire. Granite’s operations consist of 86 miles of federally regulated gas transmission pipeline, primarily in Maine and New Hampshire. Granite’s principal business is delivering gas transportation services to Northern and providing access to interstate gas pipeline supplies. Upon consummation of the transaction, both Northern and Granite would become wholly owned subsidiaries of Unitil Corp. The transaction is scheduled to close by the end of the year.

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