Calgary-based Provident Energy Trust has acquired all of the outstanding shares of Olympia Energy Inc. and Viracocha Energy Inc. The transactions are payable through Provident units, exchangeable shares and the assumption of existing debt and working capital. With the new acquisitions, Provident estimates its annual production will be 30,000 boe/d. Based on an independent engineering review, Provident’s proved reserves will increase 46% to 51.8 MMboe from 35.5 MMboe, with a proved developed reserve life index (RLI) of 4.6 years. Proved reserves will increase 48% to 62.1 MMboe from 41.8 MMboe, with a proved RLI of 5.9 years. Proved plus probable reserves will increase 49% to 81.6 MMboe from 54.9 Mboe, with proved plus probable RLI of 6.2 years. Provident is an open-ended energy income trust that owns and manages an oil and gas production business and a midstream services business. Its energy portfolio is focused in Western Canada.

Vancouver-based Powder River Basin Gas Corp. has purchased Wyoming-based S&S Drilling for C$4.25 million. The purchase includes working interests and overrides in several oil and gas properties in Wyoming as well as some equipment. Included are State of Wyoming leases as well as federal bonds and authorities to operate in the state, which are the primary reasons for the acquisition, Powder River Basin officials said. The purchase allows the producer to meet all of the requirements of the regulatory bodies in order to ramp up oil and gas wells in the state. TXU said it has completed the $500 million sale of about 1,900 miles of pipeline, gas storage and the other assets of TXU Fuel Co. to Energy Transfer Partners. The pipeline system has a capacity of 1.3 Bcf/d and TXU signed an eight-year transportation agreement with Energy Transfer for gas to fuel TXU Power’s generating assets. TXU said it will use the $500 million in gross proceeds to retire short-term debt. TXU’s pre-tax gain on the sale is $380 million and will be recognized over the term of the transportation agreement (see Daily GPI, April 27). Energy Transfer said the predominantly fee-based revenues generated from the TUFCO System will result in 70% of the partnership’s midstream natural gas revenue originating from fee-based business. The assets are expected to provide significant growth opportunities for the partnership going forward. Energy Transfer expects the transaction will be immediately accretive to the unitholders and is expected to result in $0.45-$0.50 per common unit of distributable cash flow on an annual basis. As a result, management will recommend to the board an increase in the quarterly cash distribution from $0.70 to $0.75 per common unit ($3.00 annualized).

KeySpan announced the successful completion of a $449 million exchange transaction with Houston Exploration that reduces KeySpan’s ownership of Houston Exploration from 55% to 24%. Under the terms of the transaction, KeySpan exchanged 10.8 million shares of Houston Exploration common stock for all the stock of Seneca-Upshur Petroleum Inc., a wholly owned subsidiary of Houston Exploration. Houston Exploration retired 4.6 million shares and issued 6.2 million shares in a public offering. Based on the Houston Exploration offering price of $48 per share, KeySpan’s Seneca-Upshur’s shares were valued at the equivalent of $449 million, or $41.57 per share. Seneca-Upshur’s assets consist of Appalachian producing properties valued at $60 million dollars, and $389 million in cash. Seneca-Upshur’s proven reserves of 50.5 Bcfe of gas represent 7% of Houston Exploration’s proved reserves.

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