As part of the agency’s royalty-in-kind (RIK) program, the Minerals Management Service (MMS) requested written offers last week to purchase 387,000 MMBtu/d of royalty gas produced from federal leases in the Gulf of Mexico. The production is delivered into 11 offshore pipeline systems, including ANR Nearshore, Columbia Gulf Bluewater, Central Texas Gathering System, Garden Banks, Mississippi Canyon, Matagorda Offshore Pipeline System, Seagull Shoreline, Stingray, Tennessee Gas 800 Leg, Tetco East Louisiana and the Transco Southeast Lateral. MMS said it may award a contract on the basis of the initial offer received without discussion. However, MMS may negotiate with offerers in the event offers of similar or unanticipated value are received. MMS said the Henry Hub and/or Nymex are preferred indices on all packages in addition to the named indices. Initial deliveries of royalty gas to the buyer will commence on Nov. 1. The royalty gas delivery period will be for a term of five months ending March 31, 2005 or 12 months ending Oct. 31, 2005, depending on the value of offers received. The MMS-implemented RIK program generates revenues through receiving oil and gas royalties in kind, rather than in cash, and competitively selling the commodities in the marketplace.

September ended up being a whopper of a month for energy trading and clearing on IntercontinentalExchange (ICE) and the New York Mercantile Exchange (Nymex). Both exchanges have reported volume records in a variety of products. ICE said it posted record levels of over-the-counter (OTC) cleared volumes and transactions during the month. And Nymex announced that it set a monthly record for total exchange options volume, and for the second consecutive month, records in Nymex Division futures volume, e-miNY energy futures volume, and e-miNY crude oil futures volume. Nymex options volume totaled 2.85 million contracts, surpassing the previous monthly record of 2.77 million in April 2002. Nymex Division futures volume was 10.2 million contracts, breaking the monthly record of 10.16 million set in August. “The September records are not only impressive on their own but also in the context of a 15% increase in overall exchange volume during the first three quarters of the year over the same period last year, which was a record year,” said Nymex President James E. Newsome. ICE reported that at the end of the third quarter, the number of transactions on its trading platform exceeded those that took place in all of 2003, and that was largely driven by trading in cleared products. Over 1,100 traders are active on ICE’s OTC cleared markets, the exchange said. In September, open interest for cleared products surpassed one million contracts and new volume records were established for OTC cleared gas and gas options, power, and crude oil swaps, ICE said.

MarkWest Hydrocarbon executed agreements with Equitable Production that restructures their processing relationship in Appalachia. The new agreements provide Equitable with additional flexibility in its gathering operations upstream of the MarkWest Energy Partners LP processing facilities, and provide Equitable with assurances of continued processing capacity and operations. The new agreements also protect MarkWest Hydrocarbon during periods of low processing margins. Terms of the deal were not disclosed.

Evolution Markets LLC announced the establishment of over-the-counter (OTC) brokerage and structured transaction services for North American natural gas and power trading markets. The company said it hired Jeff Rosenzweig, a power and natural gas market veteran recently with Sempra Energy Trading, to lead its new brokerage desk. The company is also actively recruiting additional team members to serve both gas and power markets. Evolution Markets will provide brokerage and structured transaction services to producers, end users and marketers participating in physical and financial natural gas markets for all natural gas trading hubs in North America and all North American Electric Reliability Council (NERC) power trading regions. Initially, it will serve these markets from operations in its White Plains, NY, headquarters. Its expansion into power and gas markets is a natural complement to its current brokerage operations in emissions, weather, OTC coal, and renewable energy trading markets, the company said. For more information on Evolution Markets’ go to https://www.evomarkets.com.

X-Change Corp. said Wednesday that it has acquired 75 oil and gas wells from longtime Texas Independent Kolt Oil & Gas Inc. The properties include existing oil & gas reserves with a possible 10 million boe on 3,000 acres of leases in the East Texas field in Gregg County, TX, near the town of White Oak and another 2,000+/- in West Central Texas near the town of Albany. X-Change — a Dallas-based company that was organized to seek merger or acquisition candidates — said that several of the wells will be proven up with private investment to determine profitability and future development strategies utilizing new state of the art technologies. The company added that service companies have been notified and workover will begin in November.

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