Clayton Williams Energy Inc., an independent headquartered in Midland, TX, has closed the sale of oil and gas assets in three East Texas fields to Samson Lone Star Ltd. Partnership. The assets were purchased in 1998 from Sonat Exploration Co. for approximately $46.5 million. Clayton Williams owned 10% of the assets and a subsidiary was general partner for a limited partnership with an affiliate of GE Capital Oil & Gas, which owned the remaining 90%. Under the limited partnership agreement, Clayton Williams’ general partnership interest increased to 35% from 1% after the limited partner received a pre-agreed rate of return. Clayton Williams plans to use the net proceeds from the sale, estimated to be $15.8 million, to reduce its outstanding bank debt and for general corporate purposes. The company also expects to report a third quarter gain of about $10.5 million on the transaction.

Northern Border Pipeline said it has completed construction of its Project 2000, expanding capacity into the Chicago area and initiating service through a new Indiana connection. Northern Border began accepting nominations for initial gas deliveries Monday. Project 2000 includes a 545 MMcf/d connection into a large industrial region via an interconnect with Northern Indiana Public Service (NIPSCO) at North Hayden IN (see Daily GPI, Dec. 22, 1999 & March 16, 2000). The project also increases Northern Border’s delivery capability into the Chicago area by 30%. The project is fully supported by contracts of at least 10 years and is expected to provide additional revenue of about $13 million annually. “I am pleased to report that this project was completed almost four weeks early and under budget,” said Bill Cordes, chairman of the pipeline’s management committee.

Residential natural gas customers in Pittsburgh will be paying 24% less for their natural gas October through December, compared to a year ago, according to distributor Dominion Peoples, which has dropped its rates to match the decline in wholesale prices. The filing made by Dominion Peoples with the Pennsylvania Public Utility Commission is 54% less than the rates set in July.

A 15% rate cut has been approved for BC Gas customers, starting today. The British Columbia distributor noted that although the price of natural gas rose dramatically last winter, it did not pass on the full amount of the increase. Consequently, the company incurred a deficit on behalf of its customers that it continues to pay off.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.