Houston-based Plains Exploration & Production Co. (PXP) built its emerging domestic natural gas position and nearly doubled its production with an agreement to buy cross-town independent Pogo Producing Co. in a stock and cash transaction valued at $3.6 billion.
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Plains Builds U.S. Gas Position with $3.6B Pogo Merger
Houston-based Plains Exploration & Production Co. (PXP) built its emerging domestic natural gas position and nearly doubled its production with an agreement to buy cross-town independent Pogo Producing Co. in a stock and cash transaction valued at $3.6 billion.
Linn Energy Doubles Gas Reserves with Dominion Midcontinent Deal
Houston-based Linn Energy LLC more than doubled its natural gas reserves last week after it joined with a group of investors to acquire Dominion Resources Inc.’s Midcontinent properties for $2.05 billion. With the announcement, Dominion now has sold or agreed to sell all of the exploration and production (E&P) operations that it plans to divest from its portfolio.
Industry Briefs
Denver-based independent Delta Petroleum Corp. has more than doubled its daily gas production with the purchase of the domestic oil and gas assets of Castle Energy Corp. The transaction includes interests in about 525 producing wells in 14 states, plus undeveloped acreage, with proved reserves of 62 Bcfe and proved developed producing reserves totaling 32 Bcfe. As part of the purchase price, the company issued 9.56 million new shares of common stock to Castle Energy. “The Castle acquisition more than doubles Delta’s daily production to approximately 22 MMcfe/d, comprised of approximately 45% oil and 55% natural gas,” said Delta CEO Roger Parker. “At current commodity prices and current daily production rates, Delta’s oil and gas revenue could be in excess of $27 million for the fiscal year ending June 30, 2003, and cash flow from operations could exceed $13 million.” Following the acquisition, Delta’s proved natural gas equivalent reserves approximate 80 Bcf, compared with 18 Bcf prior to the Castle purchase. Parker said Delta would “immediately initiate workover, recompletion and drilling activities on certain of the Castle properties in order to further increase daily production.” Shareholders approved the purchase at the company’s annual meeting May 30.
Continued GOM Shut-ins Impact Nexen’s 2Q Production
Calgary-based independent Nexen Inc. Thursday reported net income doubled in the second quarter to C$406 million ($360 million), or C$1.55 a share, on strong commodity prices. Revenue rose 6% to C$1.04 billion ($919 million), and cash flow was C$729 million ($644 million). However, Nexen’s oil and gas production was down from a year ago, partly because of continued shut-ins in the Gulf of Mexico (GOM) following last summer’s hurricanes.
Continued GOM Shut-ins Impact Nexen’s 2Q Production
Calgary-based independent Nexen Inc. Thursday reported net income doubled in the second quarter to C$406 million ($360 million), or C$1.55 a share, on strong commodity prices. Revenue rose 6% to C$1.04 billion ($919 million), and cash flow was C$729 million ($644 million). However, Nexen’s oil and gas production fell, partly because of continuing shut-ins in the Gulf of Mexico (GOM) following last summer’s hurricanes.
Chesapeake Caps ‘Most Successful Year to Date’ with Double-Digit Production Growth
Chesapeake Energy Corp. reported its oil and natural gas production jumped 27.4% and net income more than doubled in the final quarter of 2005, as higher U.S.-based production boosted revenue. The Oklahoma City-based independent posted earnings of $452.5 million ($1.11/), compared with $208.5 million (52 cents), for the same period a year ago. Excluding mark-to-market gains on hedging programs and other items, earnings were 84 cents/share, well ahead of Wall Street’s expectations of 79 cents.
Shell Pushes Back LNG Deliveries from Sakhalin II
Shell doubled its costs estimates and pushed back the commercial service date for the Sakhalin II Phase 2 LNG project on Thursday. The company said in May that the project would cost $10 billion, but it now estimates its cost at $20 billion. LNG deliveries to the Costa Azul terminal in Baja California Norte, meanwhile, have been delayed until summer 2008 from November 2007.
Duke: Earnings Up on Pipeline Sale, Still Seeking DENA Deal
Asset sales and lower interest expenses more than doubled Duke Energy Corp.’s first quarter earnings, to $868 million (91 cents/share), compared with $311 million (34 cents) in 1Q2004. On a diluted basis, earnings were 88 cents/share, compared with 33 cents a year ago.
El Paso’s Asset Sales Slash 4Q Earnings
El Paso Corp. reported Wednesday that its 4Q2004 losses more than doubled from a year ago after it sold most of its domestic and international power portfolio. The net quarterly loss was $620 million (minus 97 cents/share), versus a loss of $285 million (minus 47 cents) in 4Q2003. The company also requested a 15-day extension to file its 10-K annual report after an internal audit identified errors related to the carrying value of some investments.