San Jose-based independent power company Calpine Corp. acquireda 20% interest in 82 Bcf of proven gas reserves in NorthernCalifornia’s Sacramento basin. Calpine’s $15 million investmentprovided a portion of the financing for Houston-based SheridanEnergy Inc.’s acquisition of Sacramento Basin oil and gasproperties from Amerada Hess Corp.

Sheridan completed the previously disclosed acquisition,effective Nov. 1, of about $58 million of Amerada Hess gasproducing and non-producing properties. The acquired properties’proven gas reserves, as of the effective date, are estimated at 82Bcf, of which 78 Bcf are proven developed.

“This transaction significantly diversifies Calpine’s gasportfolio, providing access to proven, local reserves to help fuelour growing natural gas-fired power plant portfolio,” said BradBarnds, Calpine director of fuels management. “These Sacramentobasin reserves can provide enough clean-burning natural gas tosupply a 120-megawatt power plant.”

In return for its $15 million investment, Calpine received about$13 million in redeemable non-voting preferred stock in addition to20% of the outstanding common stock of Sheridan California EnergyInc. (SCEI). SCEI was founded to acquire, own and operate the newSacramento gas reserves. Sheridan owns the remaining 80% in SCEI.In addition, Calpine and Sheridan have signed a 10-year gascontract enabling Calpine to purchase 100% of SCEI’s Sacramentobasin production. Overall, the Sacramento gas reserves currentlyproduce about 20 MMcf/d.

As a result of the transactions, Sheridan reserves are now 93%natural gas. This acquisition doubles the size of Sheridan.

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