SandRidge Energy Inc. has signed a letter of intent with an undisclosed independent producer to sell some of its deep acreage rights in the natural gas-rich Cana Shale in Oklahoma for $140 million in cash. The Oklahoma City-based producer would retain the shallow drilling rights; it said has no associated proved reserves or current production from the deep rights to be sold. Proceeds from the sale, to be completed before the end of September, would be used to pay down existing debt. The transaction is not expected to affect a pending merger with Arena Resources Inc. (see NGI, April 12).
Calgary-based Paramount Energy Trust, which had been Canada’s only 100% natural gas energy trust, has completed its transition into Perpetual Energy Inc. The trust’s unitholders voted in favor of the transition at the annual meeting in June. At that time Paramount said subsidiary Warwick Gas Storage Inc. would proceed with plans to develop a gas storage facility near Vegreville, AB (see NGI, June 21). Perpetual’s common shares are to trade on the Toronto Stock Exchange under “PMT.”
Three workers were injured when a 20-inch diameter gas gathering pipeline owned by OGE Energy Corp. unit Enogex exploded at about 11 a.m. CDT last Tuesday about 50 miles southwest of Oklahoma City, OK, the company told NGI. The line was undergoing maintenance, but it was not known if the explosion was related to the work, Enogex spokesman Brian Alford said. The three injured are Enogex employees and were taken to an Oklahoma City hospital. The line has a capacity of 85 MMcf/d, but Alford said he did not know how much gas was flowing at the time of the explosion, which happened in a rural area.
The Bureau of Land Management‘s Carlsbad Field Office in New Mexico has begun a process to revise and update its Resource Management Plan (RMP) for public lands in Eddy, Lea and southwestern Chaves counties. The revised RMP would give BLM an “overall management direction” for the next two decades for about 2.2 million surface acres and 4.1 million acres of federal mineral estate. About 1.9 million acres of the managed land is split estate, with private or state surface ownership, and federally owned minerals. The BLM said it was revising the RMP because of continuing natural gas and oil development, changing demands and types of uses of BLM-administered public lands, and the conditions of the resources they contain. More information is available from the Carlsbad Field Office website.
A Birmingham, AL-based developer has received the initial environmental go-ahead for its proposal to build salt dome natural gas storage facilities in Chambers and Liberty counties, TX. Turtle Bayou Gas Storage Co. LLC‘s project “would be strategically located in southeast Texas where it would be able to store gas from Gulf Coast producers, liquefied natural gas terminals, and additional supply coming from the Midcontinent via new pipeline projects. Potential gas supplies would include those from fast-growing unconventional sources (e.g., shale, tight sights and coalbed methane),” the draft environmental assessment said [PF09-14]. The project would have two salt dome storage caverns, with a combined total gas capacity of approximately 16.6 Bcf and a combined working capacity of 12 Bcf. The proposed storage facility would be able to cycle up to six times per year with a service cycle of 20 days withdrawal and 40 days injection. It would have an average daily injection capacity of about 300 MMcf and a maximum daily withdrawal capacity of 600 MMcf. Turtle Bayou proposes to contruct two 24-inch diameter interconnects with Natural Gas Pipeline Company of America and Texas Eastern Transmission, which would provide storage customers with access to most major interstate and intrastate pipe systems serving the Midwest, Northeast, Mid-Atlantic and Southeastern regions.
New Mexico’s Public Regulation Commission (PRC) slashed by 80% the fees charged by its pipeline safety bureau. “Prudent oversight” of the the pipeline safety unit’s funds produced a surplus of about $500,000 going into the new (July 1-June 30) fiscal year, the five-member elected state regulatory commission said. While the safety fund’s positive balance caused the regulators to consider eliminating the fees in the new fiscal year, they eventually voted unanimously to charge 20% of the current fees. The commissioners said they wanted to provide some security in the face of uncertain economic times. Assessed to what the state considers jurisdictional oil, gas and hazardous liquid pipeline operators, the fees are divided between residential and commercial service categories. The lower fees went into effect July 1.
The Federal Energy Regulatory Commission issued Mississippi Hub LLC (MS Hub) a certificate to double the capacity of its salt dome storage facility, which is under construction in southern Mississippi. In September 2009 the Commission authorized MS Hub to increase to 22.1 Bcf the storage capacity that it originally approved in 2007 (17.34 Bcf). Facilities that were authorized in the 2007 and 2009 orders still are being built. The latest order gives MS Hub, a Sempra Energy subsidiary, the go-ahead to expand the capacity of the project to 44.2 Bcf. The expansion includes 15 Bcf of additional working gas capacity and 7.1 of of additional cushion gas. It will increase delivery capacity to 2.8 Bcf/d from 1.4 Bcf/d and raise the injection capacity to 1.5 Bcf/d from 0.8 Bcf/d [CP10-65]. The project calls for the construction of two 11.05 Bcf salt dome storage caverns in Simpson County, MS; and 37,305 hp of additional compression for gas injection into the storage caverns. The facilities are targeted for completion in 2015.
QEP Resources Inc. has completed its tax-free spin-off from Questar Corp., a transaction that was launched earlier this year (see NGI, May 24). All of QEP Resources’ common stock was distributed through a pro rata dividend to Questar shareholders. Each Questar shareholder received one share of QEP Resources common stock for each share of Questar common stock (including fractional shares) held on the record date, June 18. Shares of QEP Resources are trading on the New York Stock Exchange under the “QEP” symbol.
Seal Beach, CA-based Clean Energy Fuels Corp. announced that it has signed a 10-year contract with the Los Angeles County Metropolitan Transit Authority to upgrade, operate and maintain the transit unit’s compressed natural gas (CNG) fueling stations. The county has the largest clean-air bus fleet in the nation, with CNG-powered buses representing about 95% of the fleet. Clean Energy said that during the next 12 months it will rework and upgrade the CNG station compressor equipment at stations in the transit authority’s Central and South Bay divisions, where the fuel requirement is expected to be about nine million gallons annually. The county transit unit obtained federal stimulus package funding last year for the CNG station upgrade. Across America Clean Energy is partnering with many major public transit agencies, fueling more than 5,000 clean-air buses, about half of which are in the Los Angeles County fleet.
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