Murphy Oil said it has commenced production from its Medusa field in Mississippi Canyon Blocks 538 and 582. Medusa is located in 2,200 feet of water and consists of a spar facility capable of handling 40,000 b/d of crude oil and 110 MMcf/d of gas. Murphy is the operator of the field and holds a 60% interest with partners Eni Petroleum (25%) and Callon Petroleum (15%). Medusa has reserves of 140 million boe and is expected to reach peak production of 36,000 b/d of oil and 40 MMcf/d of gas.

Petro-Canada’s board approved a C$2.6 billion capital and exploration expenditure budget for 2004. The company will invest $495 million in its North American natural gas business. About $460 million will be spent on existing opportunities in Western Canada, while about $35 million will be spent in Alaska and the Mackenzie Delta/Corridor to assess future opportunities. On the East Coast, the Company expects to invest $325 million. The on- going development and drilling at Hibernia and Terra Nova are expected to require $140 million. Development costs for the White Rose project will be approximately $180 million. Oil Sands investments are expected to be $320 million. Spending on existing operations of $305 million will be dedicated to the Company’s share of Syncrude’s Stage-3 expansion, sustaining capital for both Syncrude and the MacKay River bitumen project and delineation of future bitumen resources. Internationally, the Company will spend a total of $640 million, of which $240 million will be spent on existing operations, while $400 million will be invested in new developments and exploration. In 2004, Petro-Canada’s exploration expense is expected to be $285 million, $150 million in North America and $135 million Internationally.

Closing its previously announced acquisition on schedule, Calgary-based Bonavista Energy Trust said the C$275 million acquisition of properties from Taurus Exploration will increase its production by 22% to 42,800 boe/d. The assets acquired are located adjacent to Bonavista’s existing properties in the Peace River Arch, Central and Eastern Alberta Core Areas. Current production from the assets is approximately 7,800 boe/d, including 30 MMcf/d of natural gas and 2,800 b/d of light 37 degrees API oil and liquids. The acquisition also includes approximately 252,000 net acres of highly prospective and concentrated undeveloped land with over 16,000 kms of 2D and over 200 square kms of 3D seismic data covering these lands. Bonavista Energy Trust is a natural gas weighted energy trust created through the re-organization of Bonavista Petroleum Ltd. on July 2, 2003.

With a bid of $55.5 million, a group led by a Houston cardiologist won an auction to buy Enron Corp.‘s headquarters. The 50-story tower in downtown Houston had been owned by a syndicate of banks that included J.P. Morgan Chase & Co., which bought it in the 1990s for $285 million and leased it back to Enron. The company had moved into the building in 1986, according to a spokesman. The building is carried on Houston’s tax rolls for $93 million. The transaction is scheduled to become final Dec. 16, pending approval by the U.S. Bankruptcy Court for the Southern District of New York. Proceeds from the sale will go to the bank syndicate. An adjoining 40-story skyscraper, which was built for Enron and nearly new when the company declared bankruptcy in Dec. 2001, sold for $105 million about a year ago.

El Paso Corp. has netted about $57 million from the sale of its North American nitrogen business to Dyno Nobel. The sale included nitrogen production facilities and associated working capital located in Cheyenne, WY, St. Helens, OR; and Battle Mountain, NV. The sale is part of El Paso’s 2003 five-point business plan, which included exiting non-core businesses.

Las Vegas-based Southwest Gas Corp. asked Nevada state regulators for separate rate hikes totaling $76.5 million for its north and south customers to cover increasing gas costs, with the bulk of the hike proposed for customers in the southern half of the state who do not have access to Canadian gas. The utility noted that winter supplies will be adequate, but prices will be “significantly” higher than last winter. To lessen the impact, the utility proposed that half the increase to cover purchased natural gas costs be made effective March 1, 2004 and the other half June 1, 2004. Southwest Gas said it needed to assess $59.8 million on the 475,000 southern Nevada customers, and $16.7 million on those in the north (102,000 customers). The percentage increases being sought are 19.2% for the average customers in the south, and 17.2% for those in the north. The regional differences in the rate hike and costs are reflected by the fact that the two parts of the state are served by entirely different supply basins — the Rockies and Canada for the north; and the Southwest sources for the south — and the two distribution pipeline systems are not interconnected.

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