Conventional

Skepticism of conventional wisdom is rarely out of place, particularly in the energy patch. But when the oil and gas industry is dealing with consumers, citizens and landowners, sincerity is the order of the day.

Skepticism of conventional wisdom is rarely out of place, particularly in the energy patch. But when the oil and gas industry is dealing with consumers, citizens and landowners, sincerity is the order of the day.

Linn Energy LLC has agreed to pay $1.2 billion to acquire BP plc’s Hugoton Basin properties in Kansas, the largest conventional gas field in the United States. The agreement, set to close by the end of March, includes the 450 MMcf/d Jayhawk Natural Gas Processing Plant and 2,400 producing gas wells on 600,000 net acres. The properties have a decline rate of about 7% and are expected to provide 110 MMcfe of liquids production, Linn CEO Mark E. Ellis said. The wells are 98% operated, with an estimated 800 future drilling locations. The leasehold is 63% weighted to gas, and reserves life is estimated at 18 years. Proved reserves are estimated at 730 Bcfe, with 81% proved developed. Linn entered into hedging contracts for 100% of the natural gas production associated with the transaction through 2016 using a combination of 50% swaps and 50% puts. In addition, 68% of the natural gas liquids output is hedged through 2016.

Gasco Energy Inc. said Thursday it plans to drill two conventional test wells for oil this fall in the Green River Formation, part of the company’s plans to de-risk thousands of acres it holds in the Uinta Basin in eastern Utah.

Pennsylvania lost nearly $200 million in state revenue by not imposing a tax on natural gas in October 2009, according a statewide think tank.

The economics of shale gas development are fundamentally different than conventional resources, requiring a longer time line to reach profitability, according to Terry Engelder, the Pennsylvania State University geosciences professor who helped prove the value of the Marcellus Shale.

The economics of shale gas development are fundamentally different than conventional resources, requiring a longer time line to reach profitability, according to Terry Engelder, the Pennsylvania State University geosciences professor who helped prove the value of the Marcellus Shale.

Houston-based independent Magnum Hunter Resources Corp.’s Triad Hunter LLC unit has bought Marcellus Shale oil and gas properties and leasehold mineral interests in Wetzel County, WV, for $20 million, the company said. The assets acquired include 2,225 net contiguous acres containing 20 identified horizontal drilling locations, of which seven gross locations are currently booked as proved undeveloped. A company analysis conducted in December found that the assets contained total proved reserves of about 11.5 Bcfe (16% proved developed producing) with net production of 517 Mcfe/d (100% natural gas).

Targeting natural gas and natural gas liquids (NGL) production from shale plays in Texas, Louisiana and Pennsylvania; and conventional production from the Gulf of Mexico, Crosstex Energy Inc. unit Crosstex Energy LP has completed and brought online two expansions of its natural gas gathering system in the Barnett Shale in North Texas and has reactivated its Eunice NGL fractionator in south central Louisiana.