Calgary-based independent Esprit Exploration Ltd. has completed its reorganization into two entities: Esprit Energy Trust and ProspEx Resources Ltd. Esprit, known until last year as Canadian 88 Energy Corp., held a special shareholder meeting at the end of September to vote on reorganizing into an income trust and an exploration and production company. Under the reorganization, the energy trust will hold 90% of Esprit’s existing proved producing reserves, and gain Canadian tax advantages. ProspEx will own the balance of the assets and some of the undeveloped lands and will operate as an exploration and production company.

Moody’s Investors Service has changed the rating outlook of Tulsa-based ONEOK Inc. to “stable” from “negative,” reflecting its sustained financial leverage improvement, the expectation that it will retain good financial flexibility from its free cash flow position, and management’s demonstrated commitment to improving the credit profile while “navigating its ongoing evaluation.” However, a ratings upgrade, said analysts, is “unlikely in the foreseeable future, given ONEOK’s transaction-oriented posture and willingness to acquire and sell assets in transactions that are very large and transforming and which could alter its business and financial risk profile.” Its ratings also are restrained by a “measure of unpredictability” and the working capital requirements of its energy services business. Analysts expect ONEOK to continue its “long-held strategy of investing in segments along the gas value chain (gas production, gathering and processing, transportation and storage, distribution, and marketing), but areas of strategic focus shift over time.” Moody’s said it would monitor the strategic and credit implications from the company’s pending investment in Northern Border, which it said promises to provide ONEOK with “a new growth and financing vehicle.”

Western Gas Resources completed its purchase of oil and gas assets in the San Juan Basin of New Mexico from Richardson Operating Co., Richardson Production Co., San Juan Oil and Gas and Red Pepper Pipeline LLC for a combined total of $82.2 million. The purchase includes 24,000 net acres (32,000 gross acres) with 100 wells producing 15 MMcf/d gross or 11 MMcf/d net of coalbed methane. Proved reserves are estimated to be 60 Bcf, with an additional upside of 50 Bcf. The purchase price also included 130 miles of related gathering systems, which are currently connected to Western’s existing San Juan River plant. “These assets fully support our strategy for being a premier developer of unconventional natural gas in the Rocky Mountain region,” said Western CEO Peter Dea. “Western is planning an active drilling and recompletion program to further develop the San Juan property.”

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.