Houston Exploration announced the closing of its South Texas property acquisition from various subsidiaries of Burlington Resources Inc. for $48.1 million. The purchase includes producing and undeveloped properties in four fields in Webb, Jim Hogg, Wharton and Calhoun counties, TX. Part of the growing South Texas focus area for the company includes the N.E. Thompsonville field and the South Laredo field. The N.E. Thompsonville field purchase includes 11 wells producing from the Wilcox and represents 70% of the proved reserves and nearly 75% of the current production. The South Laredo field includes an outside-operated interest in 113 wells, which the Company recognizes as one of the best parts of the overall Lobo trend. The McFarlan and Maude Traylor fields are outside of Houston Exploration's current focus and the company has signed an agreement to sell to a third party. Due diligence is currently in progress and the closing is planned for June 15. The sale will include interests in 22 wells and presents 12% of the reserve and production considered in the Burlington acquisition. The Burlington acquisition continues to increase the company's onshore reserve position with the net of 37 Bcfe of proved reserves after the sale, representing a 10% increase to the existing onshore reserve position. Currently the two retained properties are producing average net sales of 14 MMcfe/d. "Our continued expansion in South Texas is a result of a focused strategy, which is driven by economic returns and the ability to enhance our drilling inventory to meet our future growth plans," said CEO William G. Hargett.
ChevronTexaco closed the sale of its 12.5% ownership interest in a natural gas liquid fractionator to Enterprise Products Partners L.P. and on the sale of its 33.3% interest in the Discovery Pipeline System to Duke Energy Field Services. Financial details of the agreements were not disclosed. The divestitures were mandated in a consent order by the U.S. Federal Trade Commission as a condition of approving the merger between Chevron and Texaco, which closed on Oct. 9, 2001. Discovery is a gas gathering and processing system that includes a pipeline in the Gulf of Mexico and natural gas processing and fractionation facilities in Louisiana. The fractionator, located in Enterprise's complex in Mont Belvieu, TX, has the capacity to fractionate, or separate, 210,000 b/d of mixed natural gas liquids into ethane, propane, normal butane, isobutane and natural gasoline. Enterprise currently owns 62.5% interest in the facility and serves as the operator.
Pioneer Drilling said it spent $19 million on four new or refurbished drilling rigs. The company bought the assets of United Drilling Co. and U-D Holdings LP, including two Ideco H-725, 12,000-foot mechanical land drilling rigs, a substantial inventory of spare parts and equipment and five vehicles, for $7 million. It also purchased two National 110-UE 1500HP diesel electric rigs from IDM Equipment, Ltd for $6 million each. The rigs, rated to 18,000 feet, include new equipment with some refurbished components. Pioneer will provide drill pipe, drill collars, blowout preventers and handling tools to complete the rigs. These transactions are being financed with a combination of bank debt, mezzanine capital and/or common stock. Pioneer CEO Michael E. Little said the rigs are ready to be deployed and Pioneer anticipates moving one of the rigs on a multi-well drilling program in mid-June. The first of the two National rigs will be ready to begin operations by October 2002 and the second rig by January 2003. Pioneer provides contract land drilling services to independent and major oil and gas operators drilling wells in Central, South and East Texas. The company's fleet consists of 22 land drilling rigs that drill in depth ranges between 10,000-18,000 feet, with two additional 1,500-hp land rigs to be added by January 2003.
Devon Energy, BHP Billiton and Petrobras made a discovery on their Cascade prospect in the deepwater Gulf of Mexico. The discovery well is located on Walker Ridge block 206 in 8,200 feet of water. It was drilled to a total depth of 27,929 feet. The well encountered a potentially significant hydrocarbon bearing column. Additional drilling will be required to assess the full potential of the discovery. An appraisal well could be drilled later this year following analysis of core samples and other available information. "With interests in over 100 deepwater blocks in the Gulf and a significant prospect inventory, the deepwater is an important exploration area for Devon," said Devon's J. Michael Lacey, senior vice president of exploration and production. Devon holds a 25% working interest in the Cascade prospect. BHP Billiton, the operator, has 50% working interest, and Petrobras holds the remaining 25%.
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