Closed

SM Energy Co. and Mitsui & Co. Ltd. unit Mitsui E&P Texas LP have closed their acquisition and development agreement (ADA), giving Mitsui E&P a 12.5% working interest in SM Energy’s nonoperated Eagle Ford Shale acreage.

December natural gas closed lower Tuesday as traders elected to join a bearish feeding frenzy and saw no bullish developments on the horizon that would preclude prices working another 20 cents lower. At the closing bell December had fallen 5.4 cents to $3.404 and January had retreated 5.8 cents to $3.542. December crude oil continued its march to the century mark and posted a gain of $1.23 to $99.37/bbl.

Carrizo Oil & Gas Inc. and a unit of India’s Gail (India) Ltd. have closed on a joint venture (JV) that gives Gail 20% of Carrizo’s interest in about 20,200 net acres in the condensate zone of the Eagle Ford Shale for $95 million.

Encore Energy Partners LP(ENP) closed on an acquisition of producing oil and natural gas assets in the Permian Basin of West Texas for a net price of $14.8 million from a private seller. The properties have estimated total net proved reserves of 1.03 million boe, of which 87% are oil and natural gas liquids (NGL). They are 51% proved developed, and current production is about 115 Boe/d. The effective date of the acquisition was May 1, 2011. ENP also said it agreed to acquire certain nonoperated working interests in producing oil and natural gas assets in Sweetwater County, WY, from an undisclosed seller for $28.5 million. The assets have estimated total proved reserves of 4.175 million boe, of which 65% are natural gas and 35% are oil and NGLs. They are 90% proved developed, and net production attributable to the acquisition is 880 boe/d. Closing is expected in September with an effective date of June 1, 2011. ENP said it made new oil and gas hedges covering a substantial portion of the estimated production related to proved developed reserves from both acquisitions for the next several years.

Pittsburgh’s CONSOL Energy Inc., which has increasingly been focused on its Appalachian natural gas operations, agreed Thursday to sell Noble Energy Inc. half of its 663,350 net-acre leasehold in a portion of the Marcellus Shale in Pennsylvania and West Virginia, including a half-stake in existing wells, under a multi-year transaction valued at $3.4 billion.

W&T Offshore Inc. has closed its $36.7 million acquisition of Shell Offshore Inc.’s 64.3% interest in the Fairway Field and the associated Yellowhammer gas processing plant in Alabama with an effective date of Sept. 1, 2010. Current production net to W&T in the Fairway Field is about 19.5 MMcf/d of natural gas and 1,200 b/d of natural gas liquids; W&T has estimated proved reserves of 39.4 Bcf and 2.5 million bbl, or 54.5 Bcfe. The transaction completes a deal for Gulf of Mexico deepwater producing fields announced last year (see Daily GPI, Nov. 8, 2010).

August natural gas futures closed lower Thursday following the weekly government inventory report showing stocks were built at a greater rate than had been anticipated.

Inergy LP has closed on its acquisition of the Seneca Lake gas storage facility in Schuyler County, NY, and two related pipelines for about $65 million from New York State Electric & Gas Corp. Seneca Lake is a 2 Bcf salt cavern storage facility on Inergy’s U.S. Salt property outside Watkins Glen, NY. It has a maximum withdrawal capability of 145 MMcf/d and maximum injection capability of 72.5 MMcf/d. Seneca Lake is connected to the Dominion transmission system via the Seneca West Pipeline and indirectly to the citygate of Binghamton, NY, via the Seneca East Pipeline. The deal was announced in January 2010 (see Daily GPI, Jan. 12, 2010). It required the approval of the Federal Energy Regulatory Commission as well as that of the New York State Public Service Commission.

The City of Morgantown, WV, and Northeast Natural Energy (NNE) appear to be on a collision course, with the city preparing to pass an ordinance Tuesday night that would ban hydraulic fracturing (hydrofracking), and the company in turn vowing to sue the city if it tries to interfere with its two wells.