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February 14, 2006
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BP announced last week that it signed a memorandum of understanding with Brass LNG in Nigeria to purchase two million metric tons a year of liquefied natural gas (LNG). The deal, which is expected to be concluded later this year, will cover a 20-year period starting in 2010. The LNG will be delivered by Brass and used by BP to supply markets in the Atlantic basin, particularly the United States and United Kingdom. Under the flexible contract, LNG also may be delivered to other existing LNG markets and a number of proposed new terminals that BP and its partners are seeking to develop in New Jersey, Texas, elsewhere in the U.S. and in Italy. The new LNG supply will compliment BP's equity LNG from Trinidad, Australia, Indonesia and Abu Dhabi, which will make up the majority of its portfolio, together with LNG from Egypt and third-party purchase agreements with Oman and Qatar.

Young Oil Corp. said it tested a Kentucky gas well with an open flow rate of 10 MMcf/d, which is significant for the Appalachian Basin. The gas well was drilled in Knox County, KY, about four miles northeast of Corbin. Young said the well flowed when drilling topped the Big Lime formation at a depth of 1,235 feet. "We expect to complete this new well and have it in production by mid March. We believe the well will settle to about 750 Mcf/d of gas," said CEO Anthony Young. The well was drilled by DrillPro. Young Oil owns 100% of the working interest. "We have a large lease position surrounding this well with DrillPro and fully intend to drill several more wells in this field," said Young. In addition to developing this new Kentucky gas field, Young is developing a 3,700-acre natural gas lease in Fentress County, TN. Young Oil is a privately owned oil and gas exploration and production company.

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