Range Resources said it completed the purchase of the 50% of Great Lakes Energy Partners LLC that it did not previously own for $200 million plus the assumption of $68 million of Great Lakes bank debt and the retirement of $27 million of oil and gas commodity hedges. Great Lakes, a 50/50 joint venture between Range and Akron, OH-based FirstEnergy Corp., was formed in 1999 to hold their Appalachian oil and gas properties. Range estimates that it is acquiring 255 Bcfe of net proved reserves in the transaction — Great Lakes has a total of about 500 Bcfe of reserves. The purchase will add 35 MMcfe/d to Range’s production, increase its leasehold position by 664,000 net acres and bring it full control of 5,100 miles of gas gathering systems, having a throughput of more than 100 MMcfe/d. The deal makes Range the third largest Appalchian producer. The acquisition increases Range’s proved reserves by 30% to more than 900 Bcfe and increased its production by 20% to more than 210 MMcfe/d. The purchase cost equates to $1.09/Mcfe of proved reserves after the allocation of $12 million of the purchase price to undeveloped leasehold and gathering systems. Range’s production growth target for the second half of 2004 has been increased to 32-34%. A preliminary production growth target of 12-15% has been set for 2005, assuming no further acquisitions.
Cheniere Energy Inc. has selected Mitsubishi Heavy Industries (MHI) and Matrix Service as the liquefied natural gas (LNG) tank subcontractors for both its Sabine Pass & Corpus Christi LNG receiving terminals. The work will entail engineering and construction of three 160,000 cubic meter single containment storage tanks at each site. Final negotiations with MHI/Matrix are expected to be complete in the next few weeks. Construction of the LNG receiving terminals is expected to start during the first quarter of 2005, subject to receipt of construction permits by the end of 2004. Cheniere filed applications with the Federal Energy Regulatory Commission on Dec. 22, 2003, for permits to site, construct and operate LNG receiving terminals near Sabine Pass, LA, and Corpus Christi, TX. Each facility is designed to have an initial natural gas processing capacity of 2.6 Bcf/d. “FERC recently granted the permit for the first project we started in Freeport, TX,” noted Cheniere CEO Charif Souki. “With all of Freeport’s 1.5 Bcf/d of capacity spoken for, it is urgent for the local and national economies that we move rapidly on our current projects in Sabine Pass and Corpus Christi to deliver an additional 5.2 Bcf/d of import capacity.”
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