Houston-based Plains Exploration and Production Co. (PXD) has agreed to sell some of its noncore assets in California and Texas to Occidental Petroleum Corp. for $865 million in cash. The sale includes PXD’s interests in California’s Asphalto, Buena Vista and Mount Poso fields in the San Joaquin Valley and the Sansinena Field in the Los Angeles Basin, as well as the Pakenham Field in West Texas. The properties currently generate sales volumes, net of exchange related natural gas volumes, of 7,200 boe/d, and as of Dec. 31, 2005, PXD’s independent reserve engineers estimated proven reserves of 45 million boe. Occidental, which noted that the properties are adjacent to some of its other assets, said the properties will contribute about 56 million boe to its reserves. Occidental CEO Ray R. Irani said the company expects to substantially increase the current production rate to about 8,900 boe/d in the next few years. PXD, which expects the transaction to close by Oct. 1, plans to use the sales proceeds to reduce debt and continue repurchasing company shares. Lehman Brothers and Randall & Dewey, a division of Jefferies & Co., assisted PXD in the sales process.

Evansville, IN-based independent Imperial Petroleum Inc. has closed the $13.8 million sale of some of its assets to Whittier Energy Co. and Premier Natural Resources LP. Proceeds will be used to pay down the company’s senior debt. Imperial retained approximately $1.8 million of the assets previously included in the sale and anticipates a subsequent closing by the buyers on a portion of those assets. “Our asset sale is the key first step in restructuring the company’s senior debt and positioning it for future growth,” said Imperial President Jeffrey T. Wilson. “With the return of production now from our South Louisiana properties, we can focus our efforts on developing our other assets, including our New Albany shale drilling project in the Illinois Basin.”

Saying the utility hasn’t faced the scrutiny of a general rate case in 16 years, the Oregon Public Utility Commission last Tuesday launched a rate case proceeding for the state’s smallest private-sector natural gas utility, Seattle-based Cascade Natural Gas Co. The PUC said it was taking the action to determine if the utility’s rates are too high for its 51,049 customers in Oregon. Following an audit of the utility, the Oregon PUC staff concluded it “should be brought in for a general rate case because it has consistently had excessive earnings for the past several years, and without a rate reduction, these over-earnings would likely continue,” a PUC spokesperson said in announcing the three-member regulatory commission’s action. Based on preliminary review, the PUC staff said it thinks Cascade’s retail natural gas utility rates could be cut by 3.3%, or about $2.3 million annually. The upcoming PUC proceeding will be similar to a general rate case with a schedule to be set by an administrative law judge, however, a key difference, the PUC spokesperson said, is the burden of proof will be on the regulatory staff as opposed to it being on the utility in a traditional company-initiated general rate case.

El Paso Corp.’s Colorado Interstate Gas Company (CIG) subsidiary said last Wednesday that it has received Federal Energy Regulatory Commission (FERC) approval of its general rate case, which establishes rate certainty for its customers through September 2010. CIG filed a negotiated settlement of its rate case before making a filing under Section 4 of the Natural Gas Act. “We are very proud of the support we received from our customers regarding this rate case settlement,” said Jim Cleary, president of El Paso’s Western Pipelines. “To achieve an uncontested settlement, especially prior to the filing of the case, is a terrific accomplishment.” CIG said the rate case settlement preserves the status quo as to services on the its system, with rate levels for several of those services increasing only modestly since the last rate change five years ago.

Fort Worth, TX-based XTO Energy said it has increased its natural gas hedges for 2006 by 140 MMcf/d of natural gas in September at a price of $8.17/Mcf and another 215 MMcf/d in the fourth quarter at a price of $9.74/Mcf. The company reported that hedged volumes beyond 2006 have not changed. For natural gas, XTO Energy now has 400,000 Mcf hedged at $10.05/Mcf for September, 800,000 Mcf hedged at $10.28/Mcf for October through December and 500,000 Mcf hedged at $10.05/Mcf for January 2007 through December 2007. “We continue to act opportunistically with our hedging activities to capture record economic returns for the company,” said XTO Energy CEO Bob R. Simpson. “As we look forward, XTO’s prolific drilling inventory and free cash flow should drive production and reserve growth — and thus, underlying value — for years to come.”

The Department of Energy (DOE) is taking public comments on a proposed change in its gas import-export data collection program. In a Federal Register notice released on Thursday DOE said it is proposing to collect natural gas (including liquefied natural gas) import-export information only on a monthly basis, rather than on a monthly and quarterly basis. The proposed change is designed to reduce the burden on authorization holders while providing information to the public on a more timely basis. DOE currently collects some of the import-export information on a monthly basis and more detail information on a quarterly basis. Its new proposal is to collect all of the detailed information, including country of origin, destination, international point of entry/exit, pricing, transporter, purchaser, market served and contract term, only on a monthly basis. In comments made to DOE about the proposed change, the agency requested input on the practical utility of the information, what enhancements could be made, details on the reporting burden and the costs of providing the information. Send comment on the proposed change to Yvonne Caudillo at yvonne.caudillo@hq.doe.gov or by fax to (202) 586-6050.

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