ExxonMobil is drawing closer to completing its $41 billion acquisition of U.S. independent XTO Energy Inc. The company said in a regulatory filing that the deal cleared regulatory hurdles in the United States. and The Netherlands. “The applicable waiting period provided under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended…expired on March 15, 2010 without the issuance of a second request,” ExxonMobil said. “The Dutch Competition Authority provided a regulatory clearance of the pending merger on March 9, 2010. Closing of the transaction remains subject to approval by the shareholders of XTO Energy and the satisfaction (or, to the extent permitted by applicable law, waiver) of the other conditions provided in the merger agreement among the parties.” The combination of the companies would add about 45 Tcfe to ExxonMobil’s resource base and lift its gas weighting to 45% (see NGI, Dec. 21, 2009).
The Energy Information Administration’s (EIA) projections for wellhead natural gas prices, consumption, production and imports in its annual energy outlook report for 2009 turned out to be pretty much on target, according to an agency review.The statistical arm of the Department of Energy projected that natural gas demand would come in at around 23.04 Tcf for 2009. Actual consumption turned out to be 23.24 Tcf last year, according to the EIA. The EIA expected domestic gas production to total about 20.48 Tcf in 2009, but output came in at a slightly higher level of 20.57 Tcf. As for natural gas imports, the agency projected that they would total 3.03 Tcf in 2009. Actual imports were 2.96 Tcf last year, the EIA reported. The agency’s 2009 projections appeared to be solid for the electricity side as well. Actual electricity sales last year were 3,722 billion kWh. The EIA projected that they would be 3,725 billion kWh in 2009. It expected electricity prices to average 9.69 cents/kWh. They averaged a slightly higher level of 9.82 cents/kWh, the EIA said. The EIA also estimated that total energy consumption last year would be 100.5 quadrillion Btu; actual demand came in at 99.3 quadrillion Btu.
FPL Group Inc. has proposed to shareholders that its name be changed to NextEra Energy Inc. The Juno Beach, FL-based company’s principal subsidiaries — Florida Power & Light Co. (FPL) and NextEra Energy Resources LLC — would retain their current names. FPL Group’s New York Stock Exchange ticker symbol would change from FPL to NEE. The company’s board has approved the name change, and shareholders will be asked to give their approval at the company’s annual meeting, which is scheduled to be held May 21. The new name would better reflect the company’s “scale as one of the largest and cleanest energy providers in the country, its diverse scope of operations across 28 states and Canada, and its forward-thinking, innovative approach to providing energy-related solutions for customers,” and would help distinguish between FPL Group and subsidiary FPL, the company said. The announcement comes more than a year after FPL Group subsidiary FPL Energy was renamed NextEra Energy Resources LLC.
Forest Oil Corp. plans to sell $100-150 million of midstream assets in East Texas and noncore Canadian properties this year and will use the proceeds to increase flexibility and reduce debt. The Texas assets had throughput of 80 MMcf/d in 2009 with more than 200 miles of pipelines and 350 MMcf/d of capacity. Divesting the Canadian properties — noncore properties with 15-20 MMcfe/d of production and 60-70 Bcfe of estimated proved reserves — would complete a plan first announced last year. The Denver-based producer said the main components of its capital spending and organic growth will be the Texas Panhandle, the Haynesville/Bossier Shale and the Deep Basin Nikanassin Play. Forest has sold $1.1 billion of assets since announcing a divestiture plan almost two years ago.
Ameren Corp. said it will reorganize its three Illinois electric and gas utilities — AmerenCIPS, AmerenCILCO and AmerenIP — into a single utility that will be known as Ameren Illinois Co. and be a direct subsidiary of Ameren. “The merger of AmerenCIPS, AmerenCILCO and AmerenIP into one utility is the logical next step in the evolution of our business in Illinois,” said Ameren CEO Thomas R. Voss. Ameren Illinois will establish its headquarters in Peoria, IL. The company will serve all or part of 85 of Illinois’ 102 counties and rank as the second largest Illinois electricity delivery operation in number of customers (1.2 million). It will be the third largest Illinois natural gas distribution operation in number of customers (813,000). Ameren and its subsidiaries will file an application with the Federal Energy Regulatory Commission and notices with the Illinois Commerce Commission and expect to complete the reorganization by Oct. 1. Customer rates and service will not be affected.
Vancouver, BC-based TransAmerican Energy Inc. said it plans to acquire a 100% interest in 10 Utica shale oil and gas properties on 136,000 acres in Quebec. The company said it will acquire a 100% interest in the Lacasse Property for $225,000 cash. According to TransAmerican, Questerre Energy Corp. has said the entire Quebec Utica Shale region could hold up to 20 Tcf of gas with initial well production rates of up to 12 MMcf/d. From 2006 through 2009 24 wells, both vertical and horizontal, were drilled to test the Utica. Positive gas flow test results have been reported, although none of the wells had been put on production at the end of 2009. The play focuses on an area south of the St. Lawrence River between Montreal and Quebec City. Interest has grown in the region since Denver-based Forest Oil Corp. announced a discovery there after testing two vertical wells. Forest, which has several junior partners in the region, has drilled both vertical and horizontal wells. Talisman Energy has drilled five vertical Utica wells and began drilling two horizontal Utica wells in late 2009 with its partner Questerre, which holds under lease more than 1 million gross acres of land in the region, according to TransAmerican.
The Federal Energy Regulatory Commission approved Gulfstream Natural Gas System LLC‘s proposal for a mostly compression expansion of its system in the West-Central portion of Florida. In its Phase V Expansion Project the pipeline plans to add a 20,500 hp compressor unit and associated facilities in Manatee County, FL, which would increase mainline capacity by 35,000 Dth/d. Gulfstream said it has executed a 25-year firm service agreement with Florida Power Corp. for all of the capacity to serve the utility’s Hines Generating Station in Polk County, FL. Gulfstream pegged the cost of the Phase V facilities at $50.8 million. The Commission approved Gulfstream’s request for a predetermination supporting rolled-in rate treatment for the costs of the expansion in its next Section 4 rate case, absent a material change in circumstances.
The Illinois House of Representatives passed a resolution that calls on Congress to pass legislation that would postpone the Environmental Protection Agency‘s effort to regulate greenhouse gas emissions from stationary sources using its Clean Air Act authority. The delay would remain in effect until Congress adopts what the resolution called “a balanced approach to address climate and energy supply issues without crippling the economy.” A copy of the resolution was delivered to the Illinois delegation of Congress.
Xcel Energy filed earlier in March with Colorado regulators for approval of a $52.7 million rate increase to cover the utility’s updated forecast of fuel and purchased energy prices for the second quarter of this year and an undercollection for the first quarter. It asked the Colorado Public Utilities Commission (PUC) to make the increase effective April 1. Minneapolis-based Xcel said the electric commodity adjustment (ECA) filing is estimated to drive up residential and small business customer bills an average of 8%. The ECA portion of Xcel customers’ electric bills would increase to 3.73 cents/kWh in the second quarter, compared to 2.93 cents/kWh currently. For the typical residential customer, bills would increase by about $5.18 monthly to around $71.53. Small businesses face a monthly increase of $9.21, taking the average bill to more than $122. Costs associated with increase or decreases through the ECA are passed through on a dollar-per-dollar basis.
Spokane, WA-based Avista Utilities asked Idaho regulators to increase the natural gas efficiency rider for its utility customers in the northern part of the state. The changes would increase the rider by 2.6%, or about $1.52 monthly. The Idaho Public Utilities Commission (PUC) that must act on the pending request said granting the increase in the rider would not affect company earnings, and all monies collected under the rider must be used for gas conservation programs for Avista’s 72,300 gas utility customers in the state. On the electric side, the PUC said the utility also is proposing a rider increase as it anticipates a shortfall of about $600,000 at the end of this year. In both the gas and electricity efficiency programs Avista saw increased savings resulting from the riders last year. Avista reported a reduction of more than 2 million therms by gas customers last year, exceeding the utility target of 1.6 million therms. Avista’s most recent cost-benefit analysis for the gas efficiency efforts estimated a net benefit to customers of more than $8.9 million in 2008, the PUC said.
Southern Union Co. recently received approval from the Federal Energy Regulatory Commission to place its Trunkline LNG Infrastructure Enhancement Project (IEP) into service. IEP involved two components: the installation of four ambient air vaporization units and the construction of a natural gas liquids (NGL) extraction facility. Trunkline LNG Co. LLC in Lake Charles, LA, is the only liquefied natural gas (LNG) regasification terminal in North America to employ ambient air vaporization technology, the company said. BG LNG Services is the facility’s customer. The availability of an NGL extraction facility will provide BG with greater flexibility in sourcing its LNG supply, Southern Union said. The terminal is fully contracted to BG through 2030. IEP cost approximately $430 million, excluding capitalized interest, and is expected to generate operating income of $55-60 million per year.
Chesapeake Utilities said it has inked an agreement with Mountaire Farms of Delaware Inc. of Millsboro, DE, to provide the poultry plant with natural gas service. The anticipated annual margin from the consumption of natural gas at the Mountaire Farm’s Millsboro facility equates to approximately 850 average residential heating customers. In addition, by replacing Mountaire Farms’ current energy source with natural gas service, Chesapeake Utilities said Mountaire will directly reduce their carbon dioxide emissions by over 25%, which equates to taking more than 1,000 cars off the road that drive 12,000 miles a year at 20 miles per gallon. To supply the gas, Chesapeake Utilities will have to extend its distribution main infrastructure by over 2.5 miles along with an extension of 1.7 miles in Sussex County of its transmission pipeline system, Eastern Shore Natural Gas Co. Chesapeake Utilities’ natural gas distribution operations serve approximately 116,600 residential, commercial and industrial customers in Delaware, Maryland and Florida.
ATCO Midstream and SaskEnergy Inc. have completed an an expansion of the Kisbey Gas Plant in southeastern Saskatchewan, the companies said. The $44 million project was funded by SaskEnergy’s Bayhurst Energy Services Corp. and ATCO Midstream and triples the capacity of the Kisbey Gas Plant to 5 MMcf/d. It also extends the associated gathering system, which was purchased by the companies in 2007. Increased oil production in the area created additional gas production volumes, which were being flared. The expansion captures the gas for productive use.
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