For the second time in a matter of weeks, President Obama last Tuesday acknowledged that natural gas will play a critical role in the nation’s energy portfolio going forward. “We have a lot of natural gas here in this county,” he said at a town hall meeting in Annandale, VA. He acknowledged the risks associated with hydraulic fracturing (fracking) of the nation’s prolific shale natural gas supply, although he did not mention the practice by name. In late March, Obama championed natural gas as a new source of energy (see NGI, April 4). “The problem is…extracting it [shale gas] from the ground. The technologies aren’t as developed as we’d like and so there are some concerns that it might create pollution in our groundwater, for example. So we’ve got to make sure that if we’re going to do it [fracking], we do it in a way that doesn’t poison people,” Obama said.

BP plc has filed a lawsuit against Halliburton Co., claiming that the oilfield service operator’s “misconduct” contributed to the April 2010 blowout of the Macondo well and explosion aboard the Deepwater Horizon rig in the Gulf of Mexico. BP also has filed claims against Deepwater Horizon owner and operator Transocean Ltd., as well as Cameron International, which manufactured the well’s blowout preventer. BP said the presidential commission investigating the disaster had concluded that the cement slurry designed, mixed and pumped by Halliburton failed, and that results of the failed tests were not provided, which caused technicians to miss “critical signals that hydrocarbons were flowing into the wellbore.” A BP spokesman said the company was not seeking a specific sum from Halliburton but would ask for damages up to the total cost of the spill. BP is seeking at least $40 billion in damages from Transocean and seeks to force Cameron to contribute “all or part of the damages” that may be levied against BP by the U.S. government.

Energy Transfer Partners LP (ETP) will “significantly expand” its Rich Eagle Ford Mainline (REM) project in South Texas and construct a processing facility in Jackson County, TX, to accommodate more than 540,000 MMBtu/d of new commitments for long-term fee-based services from multiple producers, the partnership said. Producers contracting for gas gathering, processing and natural gas liquids (NGL) services include Rosetta Resources Operating LP, SM Energy Co., and a unit of Anadarko Petroleum Corp., ETP said. The REM expansion, which will extend from ETP’s Chisholm Pipeline in DeWitt County east into Jackson County, would add roughly 70 miles of 36-inch diameter pipe to the initial 160-mile, 30-inch diameter REM pipeline. REM was announced in February. When fully constructed the REM pipeline would consist of about 230 miles of 30-inch and 36-inch diameter pipe with a capacity of at least 600 MMcf/d. Completion of the initial phase remains scheduled for the fourth quarter, and completion of the expansion is scheduled for the first quarter of 2013, ETP said.

Copano Energy LLC plans to expand the processing capacity of its Houston Central plant in Colorado County, TX, to accommodate increased demand from producers in the Eagle Ford Shale. Houston-based Copano plans to build a 400,000 Mcf/d cryogenic processing plant, bringing the facility’s total processing capacity to 1.1 Bcf/d. The new plant is estimated to cost $145 million and could be in service by early 2013. Copano, a midstream natural gas company with operations in four states, owns assets including nine processing plants with more than 1 Bcf/d of combined processing capacity and 22,000 b/d of fractionation capacity.

AES Corp. said it plans to acquire DPL Inc. in a $3.5 billion stock deal as it looks to strengthen its regional holdings. Under the agreement, Arlington, VA-based AES will pay $30/share in cash to DPL shareholders for a total of $3.5 billion in equity, and will also assume $1.2 billion in net debt. AES said it has secured bridge financing for the deal through Bank of America Merrill Lynch, while permanent financing will include a combination of cash on hand, nonsecure debt, and the reissuance of AES corporate debt that was temporarily paid down in 2010. Dayton, OH-based DPL — the parent company of Dayton Power & Light Co. (DP&L) — serves more than 500,000 customers in western central Ohio and operates more than 3,800 MW of power generation facilities.

Following the successful completion of its initial open season to sell firm storage services from natural gas storage assets located in north-central Pennsylvania, UGI Storage Co. commenced service April 1 for winning bidders, including Virginia Power Energy Marketing, UGI Central Penn Gas (UGI CPG), J. Aron/Goldman Sachs and New Jersey Resources Energy Services, the Reading, PA-based company said. The three storage fields, which are located in the heart of the Marcellus Shale in Tioga, Potter and Cameron counties, have access to the Dominion Transmission, Transco, Tennessee Gas Pipeline and UGI CPG pipelines. UGIES plans future expansions of storage deliverability, interconnects with Marcellus producers and expansions to establish direct connections to high-value utility markets in southeastern Pennsylvania.

Jones Energy Holdings (JEH) acquired all of the producing properties in the Arkoma Basin owned and operated by Southridge Energy LLC and Pablo Energy II, which includes 20 MMcfe/d of current net production and more than 77,000 gross acres located primarily in the liquids-rich fairway of the Woodford Shale in Oklahoma’s Coal and Atoka counties. Terms of the deal were not disclosed. JEH will serve as operator of the assets going forward. JEH, Southridge and Pablo also entered into a joint venture to develop the remaining undrilled locations on the acreage. JEH said it expects to leverage drilling and operational expertise it has developed over the past two decades to develop the remaining undrilled Woodford locations in a low-cost and efficient manner. JEH reported net revenue of $101.1 million in 2010. The Austin, TX-based exploration and production company has 382 producing wells with current production of 45,906 Mcf/d and 4,359 b/d.

The Pennsylvania Game Commission (PGC) has approved four deals with Marcellus Shale operators, including one that could lead to drilling on state lands. The eight-member board will allow Endless Mountain Energy to build up to three well pads on State Game Lands in exchange for rentals, fees and a small tract of land. The commission also allowed Anadarko E&P Co., EXCO Resources and Chesapeake Appalachia to access oil and gas under SGLs from pads on adjacent property. The four deals, valued at more than $18 million, involve lands in northeast Pennsylvania. The PGC owns some, but not all, of the mineral rights to the 1.4 million acres it manages in Pennsylvania. The agency receives no appropriations from the state general fund, and operates mostly on licenses, federal grants and revenue from its natural resources.

Portland, OR-based NW Natural has reached an all-parties settlement on a previously announced joint venture to develop natural gas reserves with Encana Oil & Gas (USA) Inc., a U.S. subsidiary of Canadian-based Encana Corp. (see NGI, Feb. 28). The settlement must be approved by the Oregon Public Utility Commission (PUC), and the parties are seeking an OK by May 1. Parties to the deal include the PUC staff, Oregon’s Citizens’ Utility Board (CUB), Northwest Industrial Gas Users and the utility. NW Natural and the Encana U.S. unit will develop gas reserves in the Jonah Field in Wyoming, located north of Rock Springs.

Alabama’s Circuit Court of Tuscaloosa County has approved a settlement between Constellation Energy Partners LLC and Trust Venture Co. LLC. According to a filing with the Securities and Exchange Commission, Trust Venture sued Constellation in January 2009 over the nonoperating net profits interest (NPI) held bya Torch trust on wells in the Robinson’s Bend Field in Alabama, which were owned by Constellation subsidiary Robinson’s Bend Production II LLC (RBP II). Trust Venture alleged breach of contract over NPI conveyance and claimed that it paid above-market rates for services. It had been seeking unspecified damages and a full accounting of the NPI. Under the terms of the settlement, expected to take effect on June 13, RBP II agreed to pay Trust Venture $1.2 million for legal fees and make an irrevocable offer of at least $1 million to purchase the NPI from the trust at public auction.

The mayor of Dallas has directed city council to form a Gas Drilling Task Force and has appointed a former council member to lead the body. The task force will be charged with making recommendation to city council on issues such as air emissions and water use and disposal related to gas drilling. Mayor Dwaine Caraway and the city council were briefed on gas drilling issues faced by the city. Caraway named Lois Finkelman chair of the Gas Drilling Task Force. Finkelman served four terms on the Dallas City Council (1997-2005) and chaired the council’s Environment Committee. While on the council, she also served on the National League of Cities’ Energy, Environment and Natural Resources Steering Committee.

Rep. Glenn “GT” Thompson (R-PA) said he supports exporting surplus Marcellus Shale gas to China and other countries that do not have free trade agreements with the U.S., and also backs the concept of exporting liquefied natural gas from a port in Maryland. In an interview with the Pittsburgh Tribune-Review, Thompson, whose district is the largest in Pennsylvania and covers Marcellus territory, said he believes the U.S. could someday be stuck with an oversupply of natural gas and nowhere to sell it, an unintended consequence of exponential growth in shale gas.

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