PanCanadian Petroleum said it has taken another step toward developing its Deep Panuke natural gas field offshore Nova Scotia by awarding a contract for the front-end engineering design (Feed) study for the project to the ACCENT-Saipem Energy Joint Venture. “Starting the Feed study is a very important milestone as we move towards production at Deep Panuke. The study will include the preliminary design of process equipment, structures and pipelines, and will enable us to determine optimum development plans,” said Larry LeBlanc, PanCanadian’s vice president East Coast operations. “It will also allow us to achieve accurate cost estimates and will provide a project definition suitable for soliciting bids for the detailed design, construction and installation phase of the project.” Deep Panuke is located 155 miles southeast of Halifax. Since 1999, PanCanadian has drilled four wells in the field, each of which tested at rates in excess of 50 MMcf/d. PanCanadian has a 100% interest in the Deep Panuke development. The company plans to file a development plan application for the prospect with the Canada-Nova Scotia Offshore Petroleum Board in the fourth quarter of 2001.

Questar Gas received final approval from the Utah Public Service Commission to purchase Utah Gas Service Co., adding gas customers in Moab, Monticello, Vernal and Maeser, Utah. Questar also purchased Wyoming Industrial Gas last week. Wyoming Industrial Gas serves Kemmerer and Diamondville, WY. The stock-for-stock acquisitions, valued at $10.9 million, will add about 10,500 customers to Questar’s service territory, which is more than half the number of customers Questar Gas typically adds annually. The company will now serve about 720,000 customers in Utah, southwestern Wyoming and southeastern Idaho.

Calpine Corp. said it placed its 245 MW Hog Bayou Energy Center in Mobile, AL, into full commercial operation The plant is Calpine’s first combined-cycle merchant power facility to become operational in the Southeast. Calpine owns a 67% interest in the facility, with InterGen holding the remaining 33%. In addition to Hog Bayou, Calpine has three other combined-cycle generating projects under construction in Alabama. These include the 794 MW Decatur Energy Center and the 790 MW Morgan Energy Center (both located in Decatur) and the 770 MW Hillabee Energy Center in Tallapoosa County. Calpine has announced more than 3,000 MW of additional generation to be located throughout the Southeast.

The Oil & Gas Asset Clearinghouse will hold a hybrid auction, combining both live and Internet bidding, in conjunction with the Producing Property Exchange (PPX) in Houston on Aug. 8 at the George R. Brown Convention Center. The Clearinghouse is a full-service marketing and consulting firm for oil and gas property acquisitions and divestitures and a wholly-owned subsidiary of Petroleum Place, an Internet portal and marketplace ( serving the upstream oil and gas industry. The hybrid auction features 750 quality oil and gas properties combined into 145 Lots. Properties in the “selective offering” are located in: Alabama, California, Louisiana, Montana, North Dakota, New Mexico, Ohio, Oklahoma, Texas, Utah, West Virginia and Wyoming. Sellers include Aspect Resources, Bettis, Boyle & Stovall, Saga Petroleum, Forest Oil, Samson Resources, American Coastal Energy, 3-TEC Energy, Chesapeake Operating, EOG Resources, Duncan Oil, and many others. Properties can be previewed online through “data room explorer” hosted on the Petroleum Place web site. Three data rooms are open from July 9 through Aug. 6. Interested parties can call The Clearinghouse at (281) 873-4600 to schedule an appointment. A pre-sale conference will be held on Aug. 7 at the George R. Brown Convention Center from 8 a.m. to 5 p.m. All seller files will be available for review at that time. The hybrid auction will begin at 10 a.m. on Aug. 8.

AltaGas began delivering Canadian gas directly into Montana through its newly constructed pipeline facilities. The system gathers gas from wells near Coutts, AB, and will deliver 5 MMcf/d of gas to the Montana Power Gas Co.’s Cut Bank gas plant. The AltaGas assets are the first natural gas infrastructure in this part of Alberta and have the potential to provide gathering and processing for an area of 700 square miles. Some segments of the facilities are regulated by the National Energy Board and others are regulated by the Federal Energy Regulatory Commission.

MGV Energy Inc., the Canadian subsidiary of Quicksilver Resources, formed a joint venture with Gulf Canada Resources to explore for and develop coal bed methane (CBM) reserves on certain parts of Gulf Canada’s leasehold acreage in Alberta. Exploratory drilling is planned to commence before the end of the year. MGV entered into a similar CBM joint venture with PanCanadian in November 2000.

Equitable Resources signed an agreement to access Weathernomics Gas Buyer, a financial risk management tool for purchasing gas. The web-delivered tool aids in gas price analysis and enables users to better identify weather-driven changes in prices up to one year into the future. “By determining how weather will impact inventory levels and gas prices months into the future, Weathernomics Gas Buyer will help us more effectively negotiate a volatile natural gas market and control costs for our customers,” said Steve Rafferty, director of gas acquisition for Equitable. Weathernomics does not attempt to forecast prices. It forecasts the turning points and future direction of prices to determine if gas is overvalued or undervalued at any given time. It combines long-range weather intelligence, American Gas Association weekly storage data, inventory change forecasts, real-time NYMEX futures contract pricing, and proprietary Weathernomics technology into an engine that provides six possible buy-sell outputs. Weathernomics Gas Buyer is based on long-range weather forecasts from Planalytics Inc.

Consumers Energy, the principal subsidiary of CMS Energy, said a settlement agreement has been filed with the Michigan Public Service Commission (MPSC) on the price of its purchased natural gas through March 2002. Michigan’s largest utility reached the settlement through negotiations with the MPSC staff, the Michigan attorney general’s office, the Residential Ratepayer Consortium and the Association of Businesses Advocating Tariff Equity. In a Dec. 15, 2000 filing, Consumers Energy requested a ceiling price of $5.69/Mcf for its 1.6 million gas customers. If approved by the MPSC, the settlement would lower the ceiling price to $4.69/Mcf from June 2001 through March 31, 2002. Under the settlement and interim rules, the utility may charge a market-based rate that’s less than the ceiling price. If gas market prices cause costs to rise above the ceiling price, the cost can be recovered by the utility through an annual reconciliation process. The utility’s gas price for July bills is $4.32/Mcf.

Matador Petroleum Corp., an independent production company backed by Unocal Corp., filed to go public in a bid to raise $70 million to repay debt and for general corporate purposes. The Dallas-based producer filed a prospectus with the Securities and Exchange Commission outlining its initial public offering plans. The company has applied for a Nasdaq listing under the symbol “MATA.” Matador, formed in 1987, said its operations are mainly located in the East Texas Basin and the Permian Basin of West Texas and Southeastern New Mexico. In January 1998 it acquired nearly all of Unocal’s oil and natural gas properties and related assets in Southeastern New Mexico in exchange for 34% of its then-outstanding stock. Unocal, based in El Segundo, CA, holds a 33.8% stake, or 4.4 million common shares, of Matador.

Calpine Corp. said the U.S. Bankruptcy Court for the Northern District of California approved an agreement authorizing PG&E to assume Calpine’s modified QF contracts. Effective immediately, PG&E has assumed all of Calpine’s QF contracts. Calpine continues to receive its contractual capacity payments plus a five-year fixed energy price component of 5.37 cents/kWh, which is consistent with the recent California Public Utilities Commission Decision No. 01-06-015. In addition, all past due receivables under the QF contracts are now elevated to administrative priority status and will be paid to Calpine with interest upon the effective date of a confirmed plan of reorganization. Administrative claims enjoy priority over payments made to the general unsecured creditors. As of April 6, Calpine had recorded $267 million in accounts receivable with PG&E under its QF contracts.

Calgary-headquartered Petrobank Energy and Resources Ltd. and Ventus Energy Ltd. announced they will merge into a new company that will have three focused core areas in Western Canada, including northwest Alberta, central Alberta and southeast Saskatchewan. The arrangement gives Ventus shareholders the option of receiving C$9.75 cash or one common share of the new company for each share they hold, while Petrobank shareholders would receive one new share for each 4.25 Petrobank shares held. The new company would “provide the financial and technical platform from which domestic and high impact international projects will be pursued,” according to a statement. In Western Canada, the new company will have 1.1 million net acres of undeveloped land with a large inventory of drilling locations that will allow it to operate a year-round development and exploration program. After both Petrobank and Ventus dispose of certain properties, the combined company will produce approximately 35 MMcf/d with liquids production of 10,000 bbl/d. Included among the assets is an agreement with the Gift Lake Metis Settlement, which will allow the new company access to more than 180,000 acres of land. Ventus has drilled four exploration wells at Gift resulting in two gas discoveries. Also, the new company will continue to focus on aboriginal partnerships covering northern core area land blocks. Pro forma net debt after completing the transaction will be approximately C$140 million, including C$47.5 million of subordinated notes. The new company also would have 31.7 million common shares outstanding along with 2 million voting preferred shares. The agreement includes a break fee equal to 3.5% of the equity value in certain circumstances. So far, Ventus directors and officers holding approximately 12% of the common stock of Ventus and Petrobank directors and officers holding 35% of the voting shares of Petrobank have agreed in favor of the arrangement.

Denver-based Western Gas Resources Inc. said Wednesday it had increased hedging positions on its equity gas volumes for the rest of this year and through 2002, hedging through the rest of 2001 to 79,000 MMBtu/d, an increase of 29,000 MMBtu/d, at an average price of $4.36/MMBtu. For the second quarter of 2001, Western had hedging positions of 49,000 MMBtu/d, about 50% of its projected equity gas volumes, at an average price of $4.39/MMBtu. Western said it also has floors on nearly 10,000 bbl/d of its equity production of crude, condensate and natural gas liquids (NGL) for all of 2001 at a net equivalent, minimum oil price of $24/bbl. The floors, said Western, represent approximately 65% of its forecasted 2001 NGL production. In 2002, Western will increase its hedging position to 80,000 MMBtu/d, an increase of 27,500 MMBtu/d, which totals about 55% of its projected equity gas production. Collar structures will provide for an average minimum price of $3.81/MMBtu and an average maximum price of $5.87/MMBtu. Western has not hedged any equity NGL volumes for the coming year.

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