Pogo Producing Co. has agreed to sell its remaining Gulf of Mexico (GOM) shelf properties to Energy XXI (Bermuda) Ltd. (EXXI) for $419.5 million. Pogo said its strategic alternatives process, including the sale or merger of the company and various assets, is ongoing. The properties sold to EXXI include 28 fields currently producing 7,400 boe/d net, and with net proved reserves of 20 MMboe. About 62% of the production and 70% of the reserves are oil. On a reserves basis, 73% of the properties are operated and 74% are proved developed. Offshore leases included in the purchase agreement total nearly 282,000 gross acres (91,600 net acres). The acquisition, which is expected to close by June 1, will boost EXXI’s current production run rate by more than 40% and its proved reserves base by about 50%, said CEO John Schiller. EXXI’s properties are primarily located in the GOM and Gulf Coast onshore. The South Timbalier 21 Field, six miles offshore Lafourche Parish, LA, is its largest single asset. Pogo has been working to sell off assets and possibly sell the company since last December after being pressured by equity fund Third Point LLC, its largest shareholder (see NGI, Dec. 4, 2006).

New York-based equity fund Third Point LLC, which in the past couple of years has scooped up substantial shares in several independent producers, has purchased 2.45 million shares (8.1%) of Houston-based ATP Oil & Gas Corp. Third Point did not report a stake in ATP at year-end 2006. Third Point’s purchase of ATP stock was disclosed in a Schedule 13G filing with the Securities and Exchange Commission. Third Point CEO Daniel S. Loeb last November purchased a 7.2% stake in Pogo Producing Co., and in December he demanded that Pogo initiate a process to sell the company “in whole or part” (see related story). Third Point at one time held a substantial stake in Western Gas Resources, which has since been sold to Anadarko Petroleum Corp.

Michigan Consolidated Gas Co. (MichCon) last Thursday announced a two-year project to install a new gas pipeline in West Michigan that will increase supplies and help meet future demand spurred by residential and business growth. Construction of the 16.3-mile 30-inch diameter Jamestown Pipeline will begin in June and be completed in the 2008 construction season. It will run through Ottawa and Kent counties, Jamestown and Byron townships, and the cities of Wyoming and Kentwood. “This project, in addition to providing western Michigan with an ample natural gas supply for years to come, will also enhance the safety and reliability of the gas supply to the southern Grand Rapids area,” said Jerry Norcia, MichCon executive vice president. “By installing a new pipeline in an existing utility right-of-way, we will minimize the impact to the environment and the potential for third-party damage.” About 92% of the pipeline will be built in an electrical transmission tower right-of-way, which also will minimize the construction impact to traffic on local streets and highways. The $70 million project will provide immediate economic benefits and long-term property tax benefits. In addition to the pipeline, the project will involve construction of a meter and odorization station in Hudsonville, a pressure-reduction station in Byron Township and two additional interconnections to the MichCon distribution system. MichCon filed its application for the project with the Michigan Public Service Commission on Jan. 16. A spokesman said the company will include the project in its next rate case.

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