Equivalent

Royal Dutch/Shell Group said Thursday it recategorized an additional 250 million barrels of oil equivalent (boe) of proven reserves at the end of 2002. It also reduced the volume of proved reserves that it planned to book in 2003 by 220 million boe.

The Millennium Pipeline project is off life support after receiving the equivalent of heart bypass surgery. A new precedent agreement with the Northeast’s largest gas distribution company, KeySpan, and an alternative upstream link to supply through the Empire State Pipeline system have breathed new life into the project, according to its sponsors.

El Paso Corp.’s proposed Copper Eagle gas storage project is facing the equivalent of a public stoning in Arizona even before the company decides to move forward with a FERC filing. But El Paso spokeswoman Kim Wallace said the project isn’t dead yet, and is sorely needed in the Southwest where there are only a few storage fields, none of which are in Arizona.

El Paso Corp.’s proposed Copper Eagle gas storage project is facing the equivalent of a public stoning in Arizona even before the company decides to move forward with a FERC filing. But El Paso spokeswoman Kim Wallace said the project isn’t dead yet, and is sorely needed in the Southwest where there are only a few storage fields, none of which are in Arizona.

California’s governor late Friday confirmed that the latestplans call for the state to demand the equivalent of stock optionsin its two largest investor-owned utilities, Pacific Gas andElectric and Southern California Edison, in return for the state’sproposed plan to spend billions of dollars in the next few monthsto help the two utilities avoid bankruptcy and to bring order toCalifornia’s increasingly chaotic energy markets, some of which hasbeen caused directly by the negative cash flow plaguing bothcompanies.

Louis Dreyfus Natural Gas Corp. has announced a 23% increase inreserves, to 1.8 Tcf equivalent in 2000, including 1.6 Tcf ofnatural gas and 33 million barrels of crude oil. The year-endpresent value, discounted at 10%, of estimated future net revenuesfrom proved reserves was $3.7 billion, a $2.7 billion increase overthe prior year-end reserve value. Drilling and acquisitionactivities added 479 Bcfe or 350% of production. Proved reserveadditions from drilling were 275 Bcfe, which replaced over 200% ofproduction at an estimated finding cost of $.87 per Mcfe, andproved reserve acquisitions added 204 Bcfe at a cost of $.82 perMcfe. Louis Dreyfus drilled 461 wells in 2000, with an overallsuccess rate of 93%.

Salomon Smith Barney said yesterday in a report that it expectstotal equivalent production for its coverage group to be up 3%during the fourth quarter of 2000 compared with 4Q99 and up 1%versus the third quarter. Domestic 4Q gas production from the 41large producers (representing over 50% of total US production) inSSB’s coverage group is expected to be up 2.4% compared with theyear-ago fourth quarter and up roughly 2.2% versus the thirdquarter of this year.

EOG Resources and Burlington Resources announced a deal to swapproducing properties with about 40 Bcfe of gas (or 6.5 million bblof oil equivalent) in proved developed reserves. The oil and gasproperties EOG will receive are located in the Permian Basin ofsoutheast New Mexico and West Texas. Burlington will receiveprimarily gas properties centered in its operating areas of theAnadarko Basin in northwest Oklahoma and Hemphill County, TX.

Anadarko Petroleum said its annual energy production is expectedto grow at an average rate of 18% per year, from 48 million energyequivalent barrels (EEBs) in 1998 to an estimated 92 million EEBsin 2002. The company said the new production forecast is based ondevelopment of known fields and does not include any newexploration discoveries.