Members of the North American Energy Standards Board (NAESB) have ratified standards to implement FERC Order 2004 which significantly broadened the scope of energy affiliates that will be subject to the agency’s standards of conduct governing the relationships between regulated natural gas pipeline/electric transmission providers and their affiliates (see Daily GPI, Nov. 26, 2003 and April 15, 2004). The rule, set to go into effect Sept. 1, significantly expanded the current Order 497 regulations governing regulated pipeline and power transmission providers and preferential treatment, information disclosure and employee sharing with their marketing and wholesale merchant affiliates. The expanded rules apply to traders, producers, gatherers, processors, intrastate and Hinshaw pipelines, and any affiliate making a sale for resale of natural gas or electric energy in interstate commerce. The new standards set out by NAESB include a package of modifications of existing definitions and standards, the deletion of several principles and definitions, the creation of a new principle and the modification of one interpretation. NAESB members approved the standards in balloting that closed June 25.

In a second quarter earnings guidance issued Tuesday, independent producer Murphy Oil Corp. said it expects net income to range between $1.70-1.80 per diluted share, excluding a gain on sale of properties in western Canada. Production during the quarter from continuing operations is estimated to average 117,000 boe/d, the El Dorado, AR company said, with average crude oil and natural gas sales volumes for the quarter approximately 122,000 boe/d. Dry hole charges for the quarter will range between $10-16 million “depending on results of the Pertang well currently drilling in Peninsular Malaysia,” and total worldwide exploration expense should average between $23-29 million. A gain on the sale of certain western Canada properties will be recognized in the second quarter, which will be reflected when earnings are released.

Fortuna Energy Inc., a subsidiary of Calgary-based Talisman Energy Inc. has doubled its existing acreage with the acquisition of Belden & Blake Corp.‘s gas-rich Trenton/Black River assets in the Appalachia region for US$65 million. Talisman CEO Jim Buckee said the “key” to the transaction is the “highly prospective land position.” There were already 40 drilling locations, and Fortuna has identified more than 25 additional locations, he said. “With the added production, Fortuna will be producing 110-120 MMcf/d, and there are now four additional wells awaiting tie in,” said Buckee. “The latest Fortuna well at Moss was also very successful, testing at 15 MMcf/d.” The main assets consist of land adjacent to Fortuna’s holdings in New York, as well as interests in Pennsylvania, Ohio and West Virginia. In total, Fortuna will acquire approximately 475,000 gross acres of Trenton/Black River rights throughout the Appalachia region, with an average working interest of 78%. Fortuna currently has 433,000 acres in Appalachia (approximately 100% working interest). Fortuna will also acquire 4-5 MMcf/d of production (net before royalty), which is expected to increase to 8-10 MMcf/d by the end of the third quarter.

Responding to a nonbinding vote of its shareholders at its annual meeting last April, San Francisco-based utility holding company PG&E Corp. Tuesday announced that its board of directors approved a policy of submitting to a shareholder vote any future “shareholder rights” plan adopted by the parent of Pacific Gas and Electric Co. Under the policy, PG&E will submit to a vote within 12 months any new rights plan adopted or extended by the board. The shareholders had approved a non-binding proposal supporting this action at the annual meeting April 21, 2004. The driver for the shareholders’ action was a February 2004 PG&E Corp. board action to terminate the holding company’s then-existing shareholder rights plan upon the utility exiting Chapter 11 bankruptcy proceedings. The PG&E utility cleared Chapter 11 on April 12, “and the rights that previously had been issued under the plan expired on that date,” the corporation said in a brief report on the board’s action Tuesday.

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