Noting that its objective is to focus on North Texas as its core area of development, Empire Energy Corp. on Wednesday signed a letter of agreement to purchase, for an undisclosed amount of cash and stock, additional oil and gas interests in the Fort Worth Basin of North Central Texas. It already owns a 50% working interest in production acreage of the Old World Prospect in Parker County, and will purchase the remaining 50% along with a 100% interest in three other properties in the same area. Empire also will take over as lease operator. Headquartered in Overland Park, KS, Empire’s current reserves in the Texas prospect total about 290 MMcf. At closing on the new properties, Empire’s total reserves will surpass 1.045 MMcf of proved reserves, not including potential reserves in the prolific Barnett Shale, which underlies the newly purchased acreage. Empire said that the new leases have existing gas production with gas gathering facilities in place. After some upgrades and recompletion activities are performed on the existing gas production facilities, Empire plans to drill several test wells in the Barnett Shale, and if results are positive, will begin a full field development plan to include up to 50 wells. The Old World Prospect purchase is expected to close within the next month.

Alberta-based Enbridge Inc. reported on Thursday that it plans to buy the South Texas gas gathering, treating and transmission assets of the Williams Companies for $50 million. The deal includes 492 miles of Ferc-regulated gas transmission and 298 miles of non-FERC regulated gathering systems and pipeline laterals. The deal is the first acquisition for Enbridge’s recently created Transportation Group South, which is based in Houston and includes for former Midcoast Energy assets, which Enbridge bought earlier this year. The group has overall responsibility for Enbridge’s U.S. business activities. The assets will be owned and operated by Enbridge’s wholly owned subsidiary, Enbridge Midcoast Energy Inc. “Acquisition of these assets enables Enbridge to further expand its geographic footprint and scale of operations,” said Dan C. Tutcher, Enbridge vice president, Transportation Group South. “It levers off the expertise that Enbridge Midcoast Energy has developed in gas gathering, processing and transportation, and enhances our position in the active Gulf Coast region. In addition to its strategic value, we expect the acquisition to be immediately accretive to Enbridge earnings, and to have potential for future expansion.” Enbridge said the transmission assets include two pipelines that run from near the Texas-Mexico border at Laredo and McAllen to Transco Station 30 where they connect with the Transco mainline, which has connections at the Katy hub and continues on to the U.S. Southeast and Northeast. The company said the non-FERC regulated assets include a 130-mile gathering system with a 90 MMcf/d capacity sour gas treatment plant and 78 ton per day sulphur recovery facility, 130 miles of other gathering laterals, a currently inactive processing plant in Bee County with capacity of 60 MMcf/d and a 38-mile lateral connecting the two FERC-regulated mainlines. Enbridge said the closing of the acquisition is subject to regulatory approvals, including approval by FERC.

NUI Corp. said Thursday that subsidiary Virginia Gas Co. has completed its acquisition of a natural gas storage field in southwestern Virginia and now owns 100% of the Early Grove storage field. NUI said the field will give Virginia Gas more control to move natural gas supplies, manage storage contracts and develop the storage facility in Saltville, VA. NUI also increased the projected storage capacity at the Saltville facility by almost 20% to 12 Bcf from 10 Bcf of working gas. The facility has a working gas capacity of 1.1 Bcf. The salt cavern facility is being jointly developed by NUI and Duke Energy Saltville Gas Storage LLC, a subsidiary of Duke Energy Gas Transmission. Plans call for expansion of the facility over three to seven years, depending on the market, and at full capacity based upon current projections, it will eventually be able to deliver up to 550 MMcf/d to the surrounding region through an interconnection to the East Tennessee Natural Gas mainline system. NUI, headquartered in Bedminster, NJ, has also completed its acquisition of Virginia Gas Distribution Co., in which it owned 50%. Both the Early Grove and distribution company interests were purchased from H.A. Street and Edith Street of Grundy, VA but terms of the transaction were not disclosed. Virginia Gas plans to sell the natural gas distribution operation and will announce the sale of its propane distribution company within days.

Denver-based Evergreen Resources Inc. has been awarded the lease rights on three tracts covering 14,908 acres of prospective coalbed methane (CBM) properties in Alaska’s Matanuska Valley. Evergreen was high bidder on the tracts at the 2001 Northern Cook Inlet Basin oil and gas lease sale in September, held by the Alaska Mental Health Land Office. With bids totaling $106,338 for a 100% working interest in the acreage, the leases are contiguous with existing ownership in Evergreen’s 48,000 acre Pioneer Unit there. The area is about 30 miles north of Anchorage. CEO Mark S. Sexton said that the independent now owns 100% interests in nearly 63,000 acres of “highly prospective CBM properties,” which he said have access to the emerging natural gas markets in the Anchorage area. Evergreen’s current operations are principally focused on developing and expanding its CBM project in the Raton Basin of southern Colorado. Congress established the Alaska Mental Health Trust in 1956 that included a grant of one million acres of land to be used to generate revenues to meet the expenses of mental health programs in the state.

Houston-based Falcon Gas Storage Co. Inc. has begun operations at its Worsham-Steed Gas Storage Facility near Dallas, noting that increased production, reduced demand on the Lone Star and TXU Fuels pipeline systems,and maintenance work on the Natural Gas Pipeline of America (NGPL) Bridgeport Lateral has caused a glut of gas in the region. Falcon previously said that up to 100,000 MMBtu/d of injection capacity would be available at its gas storage facility. Because of a current gas oversupply in Texas, Falcon said storage injections are available for “parking” gas supply inventory and injection capacity is available on a firm basis. Withdrawals are available for deliveries of gas during the 2002/2003 and 2003/2004 winter heating seasons. A year ago, Falcon purchased the Worsham-Steed Facility from TXU Fuels Co., which ceased gas storage operations there in 1997. It now is redeveloping the facility for high deliverability, multi-cycle gas storage service. The company currently has more than 20 Bcf of working gas storage capacity with in excess of 600,000 Mcf/d of peak-day deliverability as well as six additional high-deliverability, multi-cycle gas storage projects in various stages of development in Texas, New York and the Rocky Mountains.

Based on normal weather, natural gas customers served by St. Louis-based Laclede Gas will see a 35% reduction in their winter heating bills, the company estimates. Laclede, with an estimated 633,000 customers in St. Louis and eastern Missouri, bases its cost estimates on the recent wholesale price projections for the winter period from November through March 2002. The actual gas costs won’t be available for about a month when Laclede files its winter purchased gas adjustment with the Missouri Public Service Commission, but the company said the lower wholesale gas prices, combined with the cost of storing and transporting the gas supplies to St. Louis through various pipelines, generally account for two-thirds to three-fourths of a residential customer’s total gas bill. Municipal taxes add an average 6% and Laclede’s operating and maintenance costs account for the remainder.

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