Brief

The “buy Canadian” bug reached Fort Worth, TX-based QuicksilverResources yesterday as it announced the purchase of controllinginterest in Alberta-based MGV Energy. No terms of the transactionwere disclosed. MGV currently produces 1.2 MMcf/d and has 5 Bcf ofproven producing reserves. The move gives Quicksilver, whichproduces over 50 MMcf/d from developments in Montana, Michigan,Wyoming and Texas, a Canadian presence. “This is the first of manysteps we will undertake in Canada,” said Porter Farrell, aQuicksilver spokesman. “We’ve been very aggressive in establishinga core area up there and are intent on growing it.”

Conoco Global Power, Conoco’s power subsidiary, announced plansto build a $250 million, 420 MW cogeneration plant at Dupont’sSabine River Works facility near Orange, TX. Conoco also announceda 10-year tolling agreement with PG&E Energy Trading in whichthe San Francisco-based company will provide the 80-90 MMcf/d ofgas for the plant while gaining the right to dispatch up to 250 MWof the project’s output. The value of the tolling agreement was notdisclosed. Conoco will be the project manager during construction,then give way to Dupont, which will operate the facility when it isfinished. Commercial operations are scheduled to begin in 2001.”This is the largest agreement of this kind PG&E Energy Tradinghas in Texas. What’s more, this energy will be sold into theEntergy power grid, making it even more valuable,” said TonyChovanec, vice president of PG&E Energy Trading’s marketingoperations.

The Senate last week confirmed Commissioner Curt Hebert Jr. to anew five-year term on the Federal Energy Regulatory Commission. Histerm expires in June 2004.

After a brief and uninspired upside push was thwarted, naturalgas futures continued lower yesterday as follow-through sellingtook prices to their lowest level since April. No fresh news wasseen influencing prices, and as a result bears remained solidly incontrol, traders said. The August contract finished down an evennickel at $2.141.

The Interior Department’s Minerals Management Service hasscheduled a meeting in Houston to discuss implementation of itsGulf of Mexico Royalty In-Kind pilot program, which is slated tobegin in October. The three-year program will involve thecollection and sale of as much as 800 MMcf/d of royalty gas fromfederal leases in the Gulf. It is the MMS’s third RIK pilot, all ofwhich are being conducted to determine the feasibility andeconomics of accepting royalties in kind rather that as a cashpayment from lessees. The meeting on the Gulf RIK will begin at 10a.m. on July 20 at the MMS Houston Compliance Division Office RM104, 4141 Sam Houston Parkway East. It is open to the publicwithout reservation. Lessees, operators, payers and potentialpurchasers are encouraged to attend.

After a brief uptick during the Wednesday night Access tradingsession, natural gas futures continued lower yesterday at the NewYork Mercantile Exchange and settled below key support levels. Julyfinished at $2.285, after carving out a $2.27 low early Thursdaymorning. Estimated volume of 95,938 was almost double that ofMonday and Tuesday.

Putting more emphasis its core business, Crystal Oil Co. changedits name recently to Crystal Gas Storage Inc. The company owns andoperates two natural gas storage facilities near Hattiesburg, MSand owns interests in other natural gas properties in Louisiana.

The merger of New Century Energies and Northern States Powerappears to be moving faster than expected. The companies announcedplans yesterday to hold their special shareholder meetings toapprove the merger in late June rather than in September. Theproposed merger requires shareholder approval as well as approvalor regulatory review by various federal and state agencies. Whencompleted the merged company will serve 3 million electricitycustomers and 1.5 million natural gas customers in 12 U.S. states.

Cumberland County awarded South Jersey Energy, the marketingaffiliate of South Jersey Industries, a one-year gas supplycontract yesterday. A company spokesman said the contract was worth$500,000. South Jersey will supply gas to all municipal facilitiesand aims to save the county government 20% off its regular gasbill. The announcement marks South Jersey’s third contract with NewJersey county governments in the past 12 months. It also has supplydeals with Atlantic and Camden Counties.