Thirty-four parcels of Federal land in Alabama, Arkansas, Kentucky, Louisiana, Michigan and Mississippi brought $101,037 to the U.S. Treasury through a competitive auction of oil and gas leases conducted by the U.S. Department of the Interior’s Bureau of Land Management (BLM) on July 11, in Springfield, VA. Bonus bids, filing fees, and rental revenue totaled $322,064, of which $221,027 will be shared with the six states. BLM, Eastern States administers the mineral estate in 31 states east of and adjoining the Mississippi River and offers selected parcels at quarterly competitive auctions. Regulations require the bidding to open at $2 per acre minimum. Seeco, Inc. from Fayetteville, Arkansas purchased a 2,449 acre parcel in Logan County, AR with their bid of $67 per acre — the highest per-acre bid of the auction. Leases are awarded for a term of 10 years and as long thereafter there is production in paying quantities. The Federal Government receives a 12.5% royalty on the value of the amount of production. Also, each respective State Government receives a 25% minimum share of the bonus bids and the royalty from each lease. Twenty-nine parcels remained available for noncompetitive, next-day filing.

Houston-based junior independent Contour Energy Co., which has been struggling to meet its financial obligations for several months, has filed for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division [No. 02-37740-H2-11]. Contour’s subsidiaries, Contour Energy E&P LLC, Kelley Operating Co. Ltd., Concorde Gas Marketing Inc., Concorde Gas Intrastate Inc. and Petrofunds Inc. also filed Chapter 11 petitions with the bankruptcy court. Contour had indicated in early June that bankruptcy was likely (see Daily GPI, June 5). Contour had to evaluate its options after losing its natural gas price hedges as a result of Enron Corp.’s bankruptcy. Following extensive negotiations with an informal committee of holders of more than 75% of their 10.4% subordinated notes, Contour and its subsidiaries filed a joint plan of reorganization and a disclosure statement regarding the plan with the court. Among other things, the plan provides for payment of the claims of holders of the company’s 14% senior secured notes to be funded with a commercial bank credit facility to be negotiated by the company in conjunction with new mezzanine debt financing contemplated by the company’s committee. In a statement, the company said is seeking the financing required to complete its reorganization plan, but added that there was no assurance it would be able to do so.

Sapient, based in Cambridge, MA, has designed and implemented an advanced technology system for Union Gas that streamlines the Ontario natural gas utility’s direct purchase operations and improves service to retail energy marketers (REMs). The new system, called Unionline for Direct Purchase, was launched the first week of July, and provides Union Gas’s REM customers with online access to certain Union Gas web-based systems, enabling them to submit enrollment transactions, view reports and invoices and directly “nominate,” or arrange, the receipt, delivery and movement of gas on the company’s infrastructure. Among other things, the Direct Purchase system provides REMs with desktop access to contract, usage, allocation and invoicing information; provides back-office efficiencies for Union Gas through the creation of web-based systems and processes; and enables REMs to complete bulk transactions, eliminating the need for individual paper transactions and providing REMs with more time to serve customers. To learn more about the system, contact Christina Barber at (617) 761-3131, or cbarber@sapient.com.

Alliant Energy Interstate Power and Light (IPL), based in Cedar Rapids, IA, has filed a 7.2% overall revenue increase request with the Iowa Utilities Board (IUB)to recover investments made in the utility’s natural gas system in the state. On average, residential customers would see a $6 a month increase in their rates. Since the company’s last rate hike in 1995, IPL said it had invested nearly $100 million in Iowa’s gas operations, and plans to invest another $50 million more in the next four years. The company is also seeking an interim increase of 6.7% until permanent rates are approved by the IUB. The average residential customer would see an increase of approximately $5 on their monthly bill if the interim rates are approved by the IUB. If recovery of the investments are permitted by the IUB, customers would see the increase on the delivery portion of their bill. In its request, IPL has proposed changes to eliminate the rate disparities among geographic zones, which were created by a series of mergers over the past 10 years.

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