Alternatives

Calgary-based Nexen Inc. is reviewing alternatives for its natural gas and power marketing businesses, which may include the sale of all or part of them. Nexen’s marketing business was the eighth largest North American gas marketer in the first quarter of this year, according to NGI’s Top North American Gas Marketers survey. The firm transacted about 5.1 Bcf/d during the quarter. Earlier this year Nexen scaled back its marketing operations (see NGI, May 4; Feb. 16). The company said it has selected an adviser to assist with this initiative to continue the alignment of its marketing activities with its upstream oil and gas business. Nexen has operations in the North Sea, Western Canada (including the Athabasca oil sands of Alberta and unconventional gas resource plays such as shale gas and coalbed methane), the deepwater Gulf of Mexico, offshore West Africa and the Middle East.

Calgary-based Nexen Inc. is reviewing alternatives for its natural gas and power marketing businesses, which may include the sale of all or part of them, it said Thursday.

Alaska’s Department of Natural Resources has awarded a $5 million contract for evaluation of alternatives for a natural gas pipeline to deliver gas from the North Slope to in-state markets to an engineering unit of Michael Baker Corp., the firm said Thursday.

Constellation Energy has hired Morgan Stanley and UBS to advise it on “strategic alternatives” and said Wednesday “the company and its advisors are in active discussions with potential strategic partners.” Meanwhile, Constellation shares posted a second day of steep declines, and Standard & Poor’s (S&P) warned of a “multiple-notch” downgrade if the company’s credit position isn’t bolstered.

Natural gas and oil prices will reconnect again in the United States, according to Wood Mackenzie’s Ed Kelly, vice president of North American gas and power. When the relinkage occurs will depend upon the long-term race between U.S. domestic supply growth and the growing reliance on gas for power generation.

Pogo Producing Co. has agreed to sell its remaining Gulf of Mexico (GOM) shelf properties to Energy XXI (Bermuda) Ltd. (EXXI) for $419.5 million. Pogo said its strategic alternatives process, including the sale or merger of the company and various assets, is ongoing. The properties sold to EXXI include 28 fields currently producing 7,400 boe/d net, and with net proved reserves of 20 MMboe. About 62% of the production and 70% of the reserves are oil. On a reserves basis, 73% of the properties are operated and 74% are proved developed. Offshore leases included in the purchase agreement total nearly 282,000 gross acres (91,600 net acres). The acquisition, which is expected to close by June 1, will boost EXXI’s current production run rate by more than 40% and its proved reserves base by about 50%, said CEO John Schiller. EXXI’s properties are primarily located in the GOM and Gulf Coast onshore. The South Timbalier 21 Field, six miles offshore Lafourche Parish, LA, is its largest single asset. Pogo has been working to sell off assets and possibly sell the company since last December after being pressured by equity fund Third Point LLC, its largest shareholder (see NGI, Dec. 4, 2006).

From coalbed methane to digester gas, solar photovoltaics to wind generation, natural gas has a stake in the burgeoning push for energy alternatives that now sees 22 states and the District of Columbia enacting renewable portfolio goals for electricity production, a panel of gas industry executives told The LDC Forum: Rockies & West Tuesday in Los Angeles.

From coalbed methane to digester gas, solar photovoltaics to wind generation, natural gas has a stake in the burgeoning push for energy alternatives that now sees 22 states and the District of Columbia enacting renewable portfolio goals for electricity production, a panel of gas industry executives told The LDC Forum: Rockies & West Tuesday in Los Angeles.

With a state policy promoting energy alternatives, grass roots-based Environment California late last month released a report heralding “A New Energy Future” in which a massive transformation could cut overall energy use nationally by 10%. The document’s vision calls for saving one-third of today’s oil use through a large shift to renewable energy and stepped up energy efficiency programs by 2025.