Conjunction

The Interior Department’s Minerals Management Service has finalized Cook Inlet Lease Sale 191 scheduled for May 19 in conjunction with an Alaska state lease sale in the area. MMS estimates the region may contain up to 1 Tcf of recoverable natural gas.

In conjunction with the early January announcement that it would sell power plants in the U.S. Southeast and exit some overseas businesses as part of a company-wide reorganization plan, Duke Energy said last week that it is combining its North American and international merchant energy operations and eliminating some executive positions.

In conjunction with last week’s announcement that it would sell power plants in the U.S. Southeast and exit some overseas businesses as part of a company-wide reorganization plan, Duke Energy said Monday that it is combining its North American and international merchant energy operations and eliminating some executive positions.

Gastar Exploration, Ltd., in conjunction with First Source Texas Inc. (FST), has entered into an agreement with an undisclosed private industry participant to acquire a 75% interest in approximately 9,100 gross acres (6,500 net acres) that lie immediately adjacent to and nearby Gastar’s existing East Texas Deep Bossier acreage. Assuming that Gastar’s and FST’s existing partners in the Deep Bossier play exercise their rights to a proportionate share of these leases, Gastar is expected to hold a 45% working interest position in these additional leases. With the addition of these leases, Gastar, FST and their minority partners will control a total of approximately 22,200 gross seismically controlled acres in the East Texas Deep Bossier play. The terms of the agreement called for Gastar, FST and their partners to make an initial payment of $800,000 and a subsequent final payment of $800,000 on or before Aug. 15, 2004. “The addition of this acreage, which Gastar believes significantly enhances our position in the Deep Bossier play, is another direct consequence of the positive results achieved from Gastar’s initial Deep Bossier well, the Belin Trust A-1 well,” said J. Russell Porter, Gastar’s COO.

Gastar Exploration, Ltd., in conjunction with First Source Texas Inc. (FST), has entered into an agreement with an undisclosed private industry participant to acquire a 75% interest in approximately 9,100 gross acres (6,500 net acres) that lie immediately adjacent to and nearby Gastar’s existing East Texas Deep Bossier acreage. Assuming that Gastar’s and FST’s existing partners in the Deep Bossier play exercise their rights to a proportionate share of these leases, Gastar is expected to hold a 45% working interest position in these additional leases. With the addition of these leases, Gastar, FST and their minority partners will control a total of approximately 22,200 gross seismically controlled acres in the East Texas Deep Bossier play. The terms of the agreement called for Gastar, FST and their partners to make an initial payment of $800,000 and a subsequent final payment of $800,000 on or before Aug. 15, 2004. “The addition of this acreage, which Gastar believes significantly enhances our position in the Deep Bossier play, is another direct consequence of the positive results achieved from Gastar’s initial Deep Bossier well, the Belin Trust A-1 well,” said J. Russell Porter, Gastar’s COO.

El Paso reported that in conjunction with the White Rock Station controls replacement project, the White Rock 1 turbine compressor was disassembled “and it has been determined that repairs can not be completed within the original time frame.” Following completion of the station’s controls replacement, due April 27, White Rock 1 will remain down through May 3, reducing El Paso’s San Juan Basin capacity by 105 MMcf/d.

Sonat will declare force majeures in conjunction with shut-in tests scheduled at its two storage fields during April. Firm storage (CSS) customers will be allocated to 36% of their currently effective Daily Injection Quantity (DIQ) and Daily Withdrawal Quantity (DWQ) during April 1-7 work at the Muldon facility in Mississippi and to 64% of DIQ/DWQ during April 8-21 work at the Bear Creek facility in North Louisiana. These reduced levels of DIQ and DWQ are subject to change, if necessary.

Initial work was completed early this month on Transco’s McMullen Lateral in South Texas in conjunction with a state highway widening project (see Daily GPI, Sept. 19), but additional maintenance will be required Wednesday and Thursday. All flows upstream of Milepost 47.866 on the lateral will be shut in at that time, affecting about 35 MMcf/d. See the bulletin board for a list of affected points.

Questar Pipeline launched a major pipeline expansion initiative last week in conjunction with plans announced recently to move forward with the eastern portion of its Southern Trails Pipeline to California (see Daily GPI, April 10) and in response to strong demand for capacity on several other downstream pipelines, particularly Kern River. Questar also said it is moving forward with plans to build the Rocky Mountain region’s first high deliverability salt cavern storage operation, and will attempt to turn its existing pipeline system into a market hub.