Assumption

Louisiana officials last Friday called for the capture or venting of natural gas in the area of the compromised Napoleonville Salt Dome in South Louisiana. The salt dome is in the area of a mysterious sinkhole that developed earlier this summer, threatening some natural gas pipelines in the area.

As it works to craft best practices for hydraulic fracturing (hydrofracking), the U.S. Department of Energy (DOE) was hosting a rare meeting in Washington Monday night — Washington, PA, not Washington, DC.

Fortis Inc. said Monday it agreed to acquire Terasen Inc. from a subsidiary of Kinder Morgan Inc. for C$3.7 billion, including the assumption of approximately C$2.3 billion of debt.

Vintage Petroleum shareholders Thursday voted in favor of Occidental Petroleum’s $4.4 billion purchase offer, including $550 million in debt assumption and $3.87 billion in OXY shares and cash. The positive vote paves the way for the acquisition to be completed at the end of the month.

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.

With the assumption that the governor will sign the bill into law, California’s state Senate Monday unanimously okayed a final bailout for Pacific Gas and Electric Co.’s emergence from Chapter 11 bankruptcy with a law authorizing the utility to refinance part of its debt backed by a retail utility rate revenue stream. The so-called “dedicated rate component” is estimated to lower the overall cost of the PG&E utility’s financial reorganization by about $1 billion.

Nova Scotia’s government last week issued a 25-year natural gas distribution license for the province on the assumption that the chosen distributor had natural gas supplies line up. However, the province has since learned that the new distributor does not have supply in place for its 4,000 potential customers and is still in the negotiating stages with several suppliers.

Nova Scotia’s government last week issued a 25-year natural gas distribution license for the province on the assumption that the chosen distributor had natural gas supplies line up. However, the province has since learned that the new distributor does not have supply in place for its 4,000 potential customers and is still in the negotiating stages with several suppliers.

Shareholders of PanCanadian Energy and AEC Corp. last week approved PanCanadian’s $6.5 billion stock purchase (excluding debt assumption) of AEC and the renaming of PanCanadian to EnCana Corp. The Alberta Court of Queen’s Bench put the final seal on the transaction on Friday. The merger forms the largest independent producer in terms of reserves and production with an enterprise value (including debt) of $18 billion (C$30 billion).