BP plc is selling its interests in the Pompano and Mica fields in the deepwater Gulf of Mexico to Stone Energy Offshore LLC, a unit of Stone Energy Corp. Stone Energy is to pay BP $204 million in cash under an agreement that includes the sale of BP’s 75% operated working interest (WI) in the Pompano field and assets and 50% nonoperated WI in the Mica field, together with a 51% operated WI in Mississippi Canyon block 29 and interests in certain leases near the Pompano field. Completion of the sale is subject to the pre-emption rights of various co-working interest owners. The companies expect to complete the sale in 2012, BP said. Both the Pompano and Mica fields produce oil and natural gas through the Pompano platform, about 120 miles southeast of New Orleans. First oil was produced from the Pompano field in October 1994 after being discovered by BP and Kerr-McGee in 1985. The Mica field, tied back to the Pompano platform some 29 miles to the north west, began production in 2001.

The Commodity Futures Trading Commission‘s (CFTC) Division of Market Oversight has issued a letter requiring market participants to comply with the new large trader reporting system for physical commodity swaps and swaptions. Clearing organizations and clearing members must begin reporting under the new large trader reporting system on Monday (Nov. 21), and the division requires that fully compliant month-end open interest reports (from September 2011 through February 2012) be submitted by March 20, 2012. The division said it will provide a temporary and conditional safe harbor for less-than-fully compliant reporting as it launches its XML-based large trader reporting system for swaps. The safe harbor will only be for market participants that make a good faith effort to comply with the new rules. The temporary relief is intended to provide sufficient time for the industry and the CFTC to transition to fully compliant reporting. A party requesting safe harbor must submit an e-mail informing the division when it expects to come into full compliance and the arrangement that it is making to come into full compliance.

The Federal Energy Regulatory Commission (FERC) has opened a series of investigations into whether interstate natural gas companies are over-recovering their cost of service by charging rates that are unjust and unreasonable. Investigations of ANR Storage Co., Bear Creek Storage Co. LLC and MIGC LLC stem from Form 2 cost and revenue information provided by the three companies for 2009 and 2010. FERC staff analysis of the information indicated that current rates may allow the companies to recover revenue substantially more than their actual cost of service. None of the companies has made a general Section 4 rate filing in the last 18 years, the FERC orders said [RP12-123, RP12-121, RP12-122]. The three companies have been directed to file a full cost and revenue study with the Commission in 75 days.

In the coming year Denver-based QEP Resources Inc. and its QEP Energy exploration and production (E&P) unit will spend within earnings and manage production with an eye on prices, CEO Charles Stanley told financial analysts. Spending will focus on higher-return oily assets at the expense of natural gas plays. QEP Energy should deliver 12-14% organic production growth in 2012, the company said. The 2012 capital plan assumes no asset sales or joint ventures and is based on the current forward curve for commodity prices. QEP expects Nymex natural gas to range $3.50-4.00/Mcf this year and $3.75-4.25/Mcf next year. Crude oil is expected to range $80-90/bbl this year and $90-100/bbl next year.

Energy experts believe U.S. natural gas consumption will be 5-10% lower and electric power consumption will be 5-15% lower in 2020 than they would have been without energy efficiency programs, according to the results of a survey released by The Brattle Group. Some areas, including New England and the Mid-Atlantic, could see reductions of as much as 12% in natural gas use due to energy efficiency improvements that began in the 1990s, while other regions may see savings of less than 1%, according to the survey of 50 academics, consultants, utilities, regulators, consumer activists and environmentalists. The reductions are being driven by a number of factors, including longstanding policy drivers such as rising fuel and capital costs, rapid advances in appliance and building technology, brought on partly by government mandates and partly by competitive economics, and cultural shifts in American values that encourage behavioral change, according to the Boston-based consultant.

Atlas Pipeline Partners LP plans to construct a 200 MMcf/d cryogenic gas processing plant in the Permian Basin. The Driver Plant would be constructed in two phases with the first having capacity to handle 100 MMcf/d and expected to enter service in the first quarter of 2013. The second phase would add another 100 MMcf/d of capacity and would be operational in the first quarter of 2015. Completion of both phases would increase capacity at the partnership’s WestTX facility from 255 MMcf/d to 455 MMcf/d. The entire project is expected to cost about $200 million, the partnership said. Pioneer Natural Resources Inc., which owns a 27.2% interest in the WestTX facility, will participate in the project’s costs and cash flows and will anchor the production growth behind the expansion, Atlas Pipeline said.

Legislators from Kansas are preparing legislation that would give states the authority to inspect natural gas storage facilities, something courts have decreed should be done by the federal government. Citing safety concerns with an absence of any gas storage inspections in his state for the past 19 months, Sen. Pat Roberts (R-KS) plans to introduce a measure in Congress that will return to the state authority to make safety inspections of 11 underground gas storage facilities that collectively hold 270 Bcf of natural gas. Meanwhile, news media in Kansas reported that the head of the state’s House of Representatives utilities committee, Rep. Carl Holmes, intends to push a resolution early next year in support of the congressional effort in Washington, DC.

The U.S. Forest Service (USFS) has withdrawn 3,302 acres of the Wayne National Forest from a federal oil and natural gas lease sale scheduled for Dec. 7, pending a study on the possible effects hydraulic fracturing. The USFS said the study could take up to six months to complete and could result in a revision of a forest plan that was drafted in 2006. The Bureau of Land Management (BLM) plans to go ahead with its auction, which will begin at 10 a.m. on Dec. 7 at the Eastern States office in Springfield, VA. The BLM will place 40 parcels totaling 17,647 acres — 16,761 acres in Mississippi, including land in the Bienville and Homochitto national forests, plus 886 acres in Louisiana’s Kisatchie National Forest — up for auction.

Wyoming is analyzing U.S. Environmental Protection Agency (EPA) findings of high levels of benzene and other chemicals, including petroleum-related compounds, at two monitoring test wells installed near natural gas drilling locations around Pavillion, WY. The findings, which were released earlier this month, are part of testing that has been ongoing since 2009, state officials told NGI. EPA held a public meeting in Pavillion Nov. 9 that drew half of the town’s 126 residents to release the latest test well data. Encana Corp., which recently sold its properties in the area to Midland, TX-based Legacy Reserves, said it intends to follow through on its commitment to the Wyoming Department of Environmental Quality to clean up three drilling waste pits that it contends predated its business in the Pavillion area. EPA has said it sampled water at 42 private drinking water and four stock wells, and the carcinogen benzene measured up to 50 times the EPA limit, along with elevated levels of diesel- and gasoline-grade organic compounds. High levels of methane also were found in 10 of the sampled wells and elevated levels of 2-butoxyethanol phosphate were measured in nine wells.

Consumer organizations urged California regulators to abandon their previous approval of a $1 billion switch to an advanced metering system at Sempra Energy‘s Southern California Gas Co. (SoCalGas). Every other major private-sector utility in the state, including Sempra’s San Diego Gas and Electric Co., is in the final stages of converting its metering to smart technologies that allow two-way communication between the customer site and the utility as part of a statewide effort that began more than five years ago. “Drastically higher” monthly retail natural gas bills are predicted for utility customers in the state if smart gas meters are installed, according to The Utility Reform Network (TURN) and the California Public Utility Commission‘s independent Division of Ratepayer Advocates.

Pennsylvanians believe that the benefits of natural gas drilling in the state’s shale plays outweigh any potential problems, but want the state to impose an extraction tax and require the disclosure of chemicals used by drillers, according to the results of a survey by the Muhlenberg Institute of Public Opinion and the University of Michigan‘s Center for Local, State and Urban Policy. Of the 525 Pennsylvania residents who participated in the telephone survey last month, 41% said natural gas drilling has provided greater benefits than problems; 33% said it had provided more problems than benefits and 26% said the benefits and problems were about equal. And 50% of respondents said they believe drilling will provide more benefits than problems in the future, while only 32% believe the problems will outweigh benefits in the future. The survey found that Pennsylvanians “have significant doubts about the credibility of the media, environmental groups and scientists” when it comes to fracking, and 60% of respondents believe that Gov. Tom Corbett‘s decisions on taxation and regulation of gas drilling are influenced by natural gas companies.

Santa Barbara, CA-based Hypersolar Inc. has filed a patent application for the production of a carbon-neutral methane gas made using sunlight, water and carbon dioxide (CO2) that the company said “can be used as a direct replacement for traditional natural gas.” HyperSolar is developing a solar-powered nanoparticle system that mimics photosynthesis to separate hydrogen from water; the hydrogen can then be reacted with CO2 to produce methane “without drilling or [hydraulic fracturing],” the company said.

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