Denver-based independent Delta Petroleum Corp. has more than doubled its daily gas production with the purchase of the domestic oil and gas assets of Castle Energy Corp. The transaction includes interests in about 525 producing wells in 14 states, plus undeveloped acreage, with proved reserves of 62 Bcfe and proved developed producing reserves totaling 32 Bcfe. As part of the purchase price, the company issued 9.56 million new shares of common stock to Castle Energy. “The Castle acquisition more than doubles Delta’s daily production to approximately 22 MMcfe/d, comprised of approximately 45% oil and 55% natural gas,” said Delta CEO Roger Parker. “At current commodity prices and current daily production rates, Delta’s oil and gas revenue could be in excess of $27 million for the fiscal year ending June 30, 2003, and cash flow from operations could exceed $13 million.” Following the acquisition, Delta’s proved natural gas equivalent reserves approximate 80 Bcf, compared with 18 Bcf prior to the Castle purchase. Parker said Delta would “immediately initiate workover, recompletion and drilling activities on certain of the Castle properties in order to further increase daily production.” Shareholders approved the purchase at the company’s annual meeting May 30.

Enron Corp.‘s board of directors unanimously accepted the resignations, effective June 6, of its four remaining long-standing directors, Robert A. Belfer, Norman P. Blake, Wendy L. Gramm and Herbert S. Winokur Jr. The board also elected Raymond S. Troubh as interim chairman of the board. Troubh is a financial consultant based in New York who was appointed to the board last November before the company filed for bankruptcy. The board is still awaiting approval from Enron’s bankruptcy court Creditors’ Committee on three new board candidates it has selected. In February, the board announced it would conduct an orderly transition composed of new, independent directors. Six of Enron’s board members resigned in February, two left in March and two more left at the end of May. Blake and Winokur, who were in charge of the board’s restructuring, said they will act as unpaid advisers to provide continuity of information in a brief transition period if needed.

As part of its East Coast exploration drilling program, Calgary-based Husky Energy Inc. said that it plans to drill an exploration well in the Jeanne d’Arc Basin, located 350 kilometers east of Newfoundland and Labrador, on the Trepassey Exploration License (EL 1044). The company holds a 100% working interest in the license. The exploration well will test the oil potential of a large structure approximately 10 kilometers south of the White Rose oilfield. Husky holds six additional licenses in the Jeanne d’Arc Basin and anticipates drilling a second well in late 2002 or in 2003. “The East Coast is a core growth area for Husky,” said John C.S. Lau, CEO of Husky Energy. “The Terra Nova development and the White Rose project are important milestones for Husky.” He added that the company “is the largest license holder in the Jeanne d’Arc Basin, and we are pleased to be moving forward with exploration in this area.” Husky said it has signed a drilling contract with GlobalSanteFe International (Canada) Drilling Co. for the Trepassey well. Under the terms of the contract, Global will provide the semi-submersible drilling rig Glomar Grand Banks. The company said it expects drilling to begin in the third quarter. The well will be drilled to a total depth of 3,100 meters.

Denver-based Gasco Energy Inc. said that it plans to complete its first two wells and re-stimulate an additional well on its Uinta Basin acreage in Utah. As part of a previously announced strategic relationship with Halliburton Energy Services’ Integrated Solutions Group , Gasco engineers will provide completion services for a 10-well pilot program in Gasco’s Riverbend Project. Since the agreement was signed in February, two of the wells, the Federal #23-29-9-19 and the Federal #42-29-9-19, were drilled to 10,600 feet and 11,700 feet respectively and both have indicated net pay from the Wasatch and the Mesaverde formations. From this point, Halliburton will be employed to enhance the production potential of these wells. Surface facilities are under construction and both of the wells will be connected to sales lines before the frac jobs are initiated, Gasco said. The third well in the series, the Alger Pass #1, was acquired earlier this year through a property exchange with El Paso Corp. Gasco said the Alger Pass #1 is producing from the Mesaverde formation and is already flowing to sales (see Daily GPI, March 8 ). It will be re-stimulated to enhance production with one or two additional fracture stimulation jobs utilizing Halliburton’s state-of-the-art frac technology. In the transaction with El Paso in March, Gasco received 2,571 net acres located in its Uinta Basin Riverbend Project in exchange for the contractual right to earn Wasatch rights on 10,850 gross Uinta Basin acres (2,713 net acres).

Peoples Energy’s oil and gas production subsidiary, Peoples Energy Production, has purchased an interest and operated position in the East White Point Field in South Texas from Abraxas Petroleum Corp. The company added that the acquired property is located in close proximity to other Peoples Energy Production holdings in South Texas and adds approximately 1.8 MMcfe/d of net production to the company’s production base. Thomas M. Patrick, COO of Peoples Energy said, “With this transaction, the company will increase its operational activities in South Texas and add to its ongoing development opportunities in the area.” The company said its acquired working interest in this field is approximately 55% and it will also operate a portion of the properties. The acquired reserves, 90% of which are natural gas, were purchased for approximately $10.5 million.

Riverton, WY-based U.S. Energy Corp. and its Crested Corp. subsidiary announced that their subsidiary, Rocky Mountain Gas Inc. (RMG), has completed an agreement with Gillette, WY-based Big Basin Petroleum LLC to acquire working interests averaging approximately 60% on approximately 1,940 gross acres of producing coalbed methane properties in the Powder River Basin of Wyoming. The companies said the property is being purchased through a cash and stock transaction valued at $1.3 million and marks the RMG’s first production of natural gas from its coalbed methane operations. RMG said the Bobcat property, located approximately 25 miles north of Gillette, consists of phase one and phase two developments and includes various water discharge, storage and disposal permits, a gathering agreement with Thunder Creek Gas Services LLC and a gas marketing agreement with Tegra Energy Services LLC. Currently, eighteen coalbed methane wells have been drilled on the property. Thirteen wells in phase one are currently hooked up and producing at a combined rate of over 1 MMcf/d from the two primary coals on the property, the Cook coal (11 wells) at 650′, and the Canyon coal (2 wells) at 450′. RMG said that production from the wells began in late December 2001 and is on a steep incline. The Cook coal is thirty to forty feet thick and the Canyon coal is twenty to thirty feet thick within the project boundaries. CCBM, Inc., a wholly owned subsidiary of Carrizo Oil & Gas Inc., has agreed to participate for up to 50% of the working interest in phase one of the property pursuant to an agreement between the two parties dated July 10, 2001.

Oneok announced it has sold its remaining equity interest in Magnum Hunter Resources Inc. , an independent producer based in Irving, TX. The interest sold by Oneok represented 4.9 million shares of Magnum Hunter common stock. “Our decision to sell is not a reflection on Magnum Hunter,” said Oneok CEO David Kyle. “Strategically it is time for us to divest our interest. The $35.8 million proceeds from this sale will be used to reduce Oneok’s outstanding commercial paper.” Oneok’s energy marketing and trading operations provide service to customers in 28 states. The company is also the largest natural gas distributor in Kansas and Oklahoma, operating as Kansas Gas Service and Oklahoma Natural Gas, serving 1.4 million customers.

Houston Exploration announced the closing of its South Texas property acquisition from various subsidiaries of Burlington Resources Inc. for $48.1 million. The purchase includes producing and undeveloped properties in four fields in Webb, Jim Hogg, Wharton and Calhoun counties, TX. Part of the growing South Texas focus area for the company includes the N.E. Thompsonville field and the South Laredo field. The N.E. Thompsonville field purchase includes 11 wells producing from the Wilcox and represents 70% of the proved reserves and nearly 75% of the current production. The South Laredo field includes an outside-operated interest in 113 wells, which the Company recognizes as one of the best parts of the overall Lobo trend. The McFarlan and Maude Traylor fields are outside of Houston Exploration’s current focus and the company has signed an agreement to sell to a third party. Due diligence is currently in progress and the closing is planned for June 15. The sale will include interests in 22 wells and presents 12% of the reserve and production considered in the Burlington acquisition. The Burlington acquisition continues to increase the company’s onshore reserve position with the net of 37 Bcfe of proved reserves after the sale, representing a 10% increase to the existing onshore reserve position. Currently the two retained properties are producing average net sales of 14 MMcfe/d.

ChevronTexaco closed the sale of its 12.5% ownership interest in a natural gas liquid fractionator to Enterprise Products Partners L.P. and on the sale of its 33.3% interest in the Discovery Pipeline System to Duke Energy Field Services . Financial details of the agreements were not disclosed. The divestitures were mandated in a consent order by the U.S. Federal Trade Commission as a condition of approving the merger between Chevron and Texaco, which closed on Oct. 9, 2001. Discovery is a gas gathering and processing system that includes a pipeline in the Gulf of Mexico and natural gas processing and fractionation facilities in Louisiana. The fractionator, located in Enterprise’s complex in Mont Belvieu, TX, has the capacity to fractionate, or separate, 210,000 b/d of mixed natural gas liquids into ethane, propane, normal butane, isobutane and natural gasoline. Enterprise currently owns 62.5% interest in the facility and serves as the operator.

Pioneer Drilling said it spent $19 million on four new or refurbished drilling rigs. The company bought the assets of United Drilling Co. and U-D Holdings LP, including two Ideco H-725, 12,000-foot mechanical land drilling rigs, a substantial inventory of spare parts and equipment and five vehicles, for $7 million. It also purchased two National 110-UE 1500HP diesel electric rigs from IDM Equipment, Ltd for $6 million each. The rigs, rated to 18,000 feet, include new equipment with some refurbished components. Pioneer will provide drill pipe, drill collars, blowout preventers and handling tools to complete the rigs. These transactions are being financed with a combination of bank debt, mezzanine capital and/or common stock. Pioneer CEO Michael E. Little said the rigs are ready to be deployed and Pioneer anticipates moving one of the rigs on a multi-well drilling program in mid-June. The first of the two National rigs will be ready to begin operations by October 2002 and the second rig by January 2003. Pioneer provides contract land drilling services to independent and major oil and gas operators drilling wells in Central, South and East Texas. The company’s fleet consists of 22 land drilling rigs that drill in depth ranges between 10,000-18,000 feet, with two additional 1,500-hp land rigs to be added by January 2003.

Devon Energy, BHP Billiton and Petrobras made a discovery on their Cascade prospect in the deepwater Gulf of Mexico. The discovery well is located on Walker Ridge block 206 in 8,200 feet of water. It was drilled to a total depth of 27,929 feet. The well encountered a potentially significant hydrocarbon bearing column. Additional drilling will be required to assess the full potential of the discovery. An appraisal well could be drilled later this year following analysis of core samples and other available information. Devon holds a 25% working interest in the Cascade prospect. BHP Billiton, the operator, has 50% working interest, and Petrobras holds the remaining 25%.

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