Calgary-based independent producer Pinnacle Energy Corp. is diversifying its interests and recasting itself as a land management company with significant interests in coal. It will continue to exploit its oil and gas properties, the company said. Pinnacle is working to acquire control of "significant" coal reserves in Montana and Utah along with assets and personnel to aid in land management and coal marketing. The company has producing oil and gas wells in Pawnee County, OK, and is planning to drill four wells in the Glencoe Prospect during the second quarter. "We believe that the available properties we've identified could potentially bring Pinnacle additional enterprise value within the next few years. Negotiations for the potential coal reserves are moving forward rapidly, and we are planning an announcement immediately upon successful closing of the transaction," said President Nolan Weir.

Although reports out of the Navajo Nation indicate an agreement has been reached in a long-standing interstate natural gas pipeline right-of-way (ROW) dispute with an El Paso Corp. subsidiary (see Daily GPI, Jan. 23), a spokesperson for Houston-based El Paso told NGI there is no "fully executed agreement" and a confidentiality agreement between the parties remains in effect as talks continue. In the meantime, interim agreements continue between both sides and natural gas flows, which vary between approximately 2-3 Bcf/d, have never been threatened, the spokesperson said. At issue since a 20-year ROW agreement expired in October 2005 is the valuation of the Navajo Nation lands for the purpose of an interstate pipeline ROW. The Native American tribe has alleged that El Paso is questioning its sovereignty, but the pipeline company contends it is strictly an economic dispute. The Houston-based pipeline operator needs a renewed long-term agreement with the Navajos to ship natural gas across more than 900 miles of tribal lands in Arizona, Nevada, New Mexico and California. Three years ago El Paso Natural Gas Co. and the Navajo Nation signed an interim agreement that ended a stalemate over the fair dollar value of the gas pipeline's access to tribal lands (see Daily GPI, Jan. 18, 2006). Last summer Navajo Nation President Joe Shirley Jr., said a deal had been reached. The last public statement by El Paso was in an 8K filing to the Securities and Exchange Commission (SEC) on May 19 saying that on May 14 the two sides had reached a "preliminary agreement" and a final deal was to be worked out by June 30, 2008. That never happened. In the meantime, "there has never been a problem with gas flows," nor has the Navajo Nation tried to circumvent the Natural Gas Policy Act, the El Paso spokesperson said.

A Pennsylvania Department of Environmental Protection (DEP) investigation in Dimock Township, Susquehanna County, has discovered elevated natural gas levels in four water wells, but not at levels that pose a danger. Gas has not been found in any of the nearby homes. DEP has worked since Jan. 1 to identify the source of elevated gas levels in water wells. Investigators assessed water wells and living space at more than 20 residences in the rural area about 25 miles north of Scranton. Using a procedure called isotopic analysis, the department sampled gas from two nearby gas wells, a pipeline and two water wells in an attempt to determine the source of the migrating gas. Isotopic analysis compares the chemistry of the gas from the various sources to determine if there are chemical similarities. The results analysis is ongoing. The department is also reviewing records from recently drilled wells in the area. Drinking water standard limitations have not been established for natural gas and associated health risks have not been identified.

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