Williams’ Northwest Pipeline has received authorization from FERC to place its 30-inch Parachute Lateral Pipeline project in the capacity-constrained Piceance Basin of Colorado into service. The 37.6-mile pipeline and related facilities will provide 450,000 Dth/d from Williams’ production facilities in Garfield County, CO, to the Greasewood Hub. The Federal Energy Regulatory Commission (FERC) approved the pipeline project last year (see NGI, Aug. 21, 2006). Affiliate Williams Power also executed a precedent agreement to provide secure transportation service on the lateral for a 15-year term.
Trans Energy Inc., a small-cap producer that repositioned itself last year, agreed to a joint venture with an affiliate of privately held Republic Energy Inc. — one of the Barnett Shale’s long-time operators — to develop deep shale natural gas reserves in northern West Virginia. Financial details were not disclosed. The two companies will conduct seismic data gathering, drilling, coring and completion and production operations jointly in Wetzel County, WV, to develop reserves from the Marcellus, Rhinestreet and other Devonian shale formations at similar depths. The joint venture applies to Wetzel County only, but it may be extended to additional areas if both parties agree. The companies will each hold a 50% working interest in wells drilled, with the first well expected in July.
Chesapeake Energy Corp. last week said its previously announced transaction with Gastar Exploration Ltd. to acquire all of Gastar’s rights, title and interest in a portion of its East Texas undeveloped leasehold and to purchase 10 million newly issued Gastar common shares will not be consummated due to a third party exercising its right of first refusal through an existing agreement. Gastar closed the sale of a portion of its undeveloped leasehold in East Texas for cash proceeds of approximately $88 million, including the issuance of 10 million newly issued Gastar common shares at $2/share, to Navasota Resources LP, the company said recently. An additional $4 million is expected to be received by July 9, 2007 assuming certain title curative actions can be completed. Private exploration and production company Navasota exercised its preferential rights and acquired the leasehold interests and the Gastar common shares for cash. As a result of the issuance of the 10 million new common shares in this transaction, Navasota holds approximately 4.9% of Gastar’s 205,341,375 currently issued and outstanding common shares. The common shares issued to Navasota have not been registered under the Securities Act of 1933, as amended, or Canadian securities laws. Navasota was granted certain limited rights to register the resale of the shares purchased in the transaction. “Gastar plans to use the proceeds from the sale of the leasehold interest to continue our East Texas deep Bossier drilling program, focusing on the areas that are covered by a recently acquired 3-D seismic survey, as well as to continue the development of our coalbed methane properties in southeastern Australia,” said Gastar CEO J. Russell Porter. “The sale of these assets provides Gastar the financial flexibility to pursue our current business plan as well as potential new opportunities.” Because of certain anti-dilution rights previously obtained, Chesapeake will acquire approximately 1.8 million additional shares from Gastar at $2.00/share, thereby maintaining Chesapeake’s fully diluted ownership in Gastar at 14.95%.
The New York State Public Service Commission (PSC) authorized Consolidated Edison Co. (Con Edison) to expand a natural gas efficiency program in its service territory to prepare for the 2007-2008 winter heating season. According to the PSC, the program, budgeted at $14 million, is expected to have a “relatively small impact” on Con Edison’s customers, representing less than a 2% increase in delivery revenues and less than a 1% impact on total bills. Under the PSC order, Con Edison will be allowed to defer the program costs and document revenue losses attributable to the gas efficiency program. When the PSC considers Con Edison’s full rate case in September, it then will determine how Con Edison may recover its costs. The written order may be obtained from the PSC website at www.dps.state.ny.us by assessing the Commission Documents section and referencing Case 03-G-1671.
Sixteen of the world’s biggest cities, including North America’s Chicago, Houston, Mexico City, Toronto and New York, have joined forces with five banks and several groups led by former President Clinton in an ambitious multi-billion-dollar plan to cut urban energy use and greenhouse gas (GHG) emissions. The plan, developed through the William J. Clinton Foundation, provides for participating banks to pledge up to $1 billion each in loans that cities or private landlords could use to upgrade heating, cooling and lighting systems in older buildings. The loans and interest would be repaid with savings accrued through reduced energy costs, according to organizers of the initiative. The National Academy of Sciences (NAS) and the scientific academies of 12 countries also issued a joint statement calling on world leaders to address GHG by increasing energy efficiency, shifting to less-polluting energy sources, and increasing research on new energy technologies that produce no emissions. The statement followed a three-day meeting of mayors, business leaders and environmental experts organized by the Clinton foundation and other partners as part of a two-year-old initiative to advance ways to reduce GHG emissions.
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