In a deal exchanging disputed oil/gas properties for cash, Calpine Corp. late Wednesday said it had settled its remaining differences with Rosetta Resources Inc., its spinoff to which it sold the bulk of its oil and natural gas properties in the summer of 2005 (see Daily GPI, June 30, 2005). As part of the settlement, Calpine gets a $97 million payment and Rosetta obtains “certain residual oil and gas properties” and a 10-year supply pact from Calpine.

In August last year, Rosetta, a Houston-based independent producer, reached a partial settlement with then-bankrupt Calpine over the independent power generation developer/operator’s sale two years earlier of its North American oil and gas reserves. No dollar amount was assigned to the partial deal, which eventually was approved by the U.S. Bankruptcy Court, Southern District of New York (see Power Market Today, Aug. 9, 2007).

Earlier last year, Calpine alleged that it was cheated out of about $400 million, according to a disclosure statement filed as part of its bankruptcy proceeding, and at that time said it was filing a lawsuit against Rosetta (see Daily GPI, June 22, 2007).

Subsequently, the bankruptcy court in New York rejected a request by Rosetta to dismiss Calpine’s allegations of fraud by the oil and gas producer. Calpine made the charges as part of its Chapter 11 bankruptcy proceeding (see Power Market Today, Oct. 29, 2007). The issue never went to trial.

Calpine said the settlement resolves disputes that were part of the litigation in the U.S. Bankruptcy Court, including the two companies’ respective claims of fraud. As part of the deal, the companies are completing a 10-year extension of an existing dedicated reserves gas purchase agreement for Rosetta’s California production located near Calpine’s intrastate CPN Pipeline Co.

Calpine CEO Jack Fusco said the past disputes have now been “amicably resolved, and we have entered into a mutually beneficial 10-year gas supply agreement that assures Calpine of a continued relationship with Rosetta and a reliable supply of natural gas for our California plants through 2019.”

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