Stone Energy said it has entered into gas put contracts with three separate counterparties covering 90,000 MMBtu/d of its 2004 Gulf Coast Basin production. The contracts set a 2004 floor price on the production of $3.50/MMBtu. Monthly payments are scheduled to be made by the counterparty if Nymex prices fall below the floor price. But Stone is able to fully participate in commodity prices above the floor price. The cost of the contracts, which totaled $2.4 million, will be amortized through earnings as the contracts settle. Previously, the company was unhedged for its 2004 natural gas production from the Gulf Coast Basin. The company continues to evaluate additional cost-effective hedging opportunities for its 2004 oil and natural gas production.

KeySpan Corp. subsidiary KeySpan Energy Development completed the sale of its 24.5% interest in Phoenix Natural Gas to East Surrey Holdings for $96 million. Phoenix is a gas distribution company based in Belfast, Northern Ireland. East Surrey, which had owned 24.5% of Phoenix Natural Gas, has also purchased the 51% interest of the other shareholder, BG Group, a global energy company based in the United Kingdom. The sale of KeySpan’s interest and BG Group’s interest occurred simultaneously, making East Surrey Holdings the 100% owner of Phoenix Natural Gas. KeySpan originally purchased its interest in Phoenix in February 1997. Since then, the business has expanded from a single customer to more than 64,000.

Calgary-based AltaGas Services Inc. on Thursday entered into a purchase and sale agreement with Gibson Energy Ltd. to acquire Gibson’s interests in two natural gas processing systems, Rainbow Lake and Mica Pouce Coupe, for approximately C$17 million. The Rainbow Lake gathering and processing system, located near the town of Rainbow Lake in northwestern Alberta, includes a 100% interest in a 40 MMcf/d sour natural gas processing facility with throughput of approximately 28 MMcf/d and includes 130 kilometers of gathering pipelines. AltaGas said the facility is supported by extensive land dedications in an area with strong producer activity. AltaGas will also have 40.78% ownership in the Mica Pouce Coupe sweet gas processing facility. The Mica Pouce Coupe acquisition is expected to close in early January subject to rights of first refusal by the owner partners, while the Rainbow Lake acquisition is expected to close before the end of December, 2003. “The Rainbow and Mica Pouce Coupe facilities complement AltaGas’ ever growing portfolio of gathering and processing assets and expand the Company’s reach into two new operating areas,” said David Cornhill, CEO. “We continue to pursue strategic growth opportunities to generate earnings and cash flow growth in all components of our business.”

Calgary-based Imperial Oil Resources, ExxonMobil Canada and Chevron Canada Resources have acquired the exploration rights for eight deepwater parcels offshore Newfoundland. The Canada-Newfoundland Offshore Petroleum Board awarded several exploration licenses for offshore areas in a region known as the Orphan Basin. The companies were awarded exploration licenses for the parcels after proposing exploration spending of C$673 million, with Imperial and ExxonMobil Canada 25% stakeholders and Chevron Canada a 50% stakeholder.

Denver-based Westport Resources Corp. has completed its acquisition of oil and natural gas assets in South Texas from privately held United Resources for $350 million. The acquisition increases Westport’s total proved reserves by approximately 211 Bcfe, of which 97% are natural gas. About 60% of the added proved reserves are classified as proved developed, and Westport has identified more than 100 Bcfe of probable and possible potential and an exploratory prospect inventory comprised of 48,000 gross (25,000 net) undeveloped acres. The acquired properties produced approximately 27 Bcfe in 2003 and Westport expects to increase production more than 10% during the next twelve months. The properties have an average lease operating cost of approximately 50 cents/Mcfe and a reserve to production ratio of approximately eight years based upon estimated 2003 production.

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