Exploration

After suffering through a long period of low prices and thinmargins, exploration and production (E&P) companies appear tobe headed toward a period of success, a report published recentlyby Deutsche Banc Alex. Brown (Deutsche Banc) said. Strong gasprices, industry consolidation and probable low storage levels arethe main factors contributing the report’s bullish conclusions.

Newfield Exploration Co. said it would buy interests inproducing gas assets in south Texas from an undisclosed seller for$142 million. The producing gas fields are located in Hidalgo,Brooks and Kenedy counties. The effective date of the transactionis Jan. 1, 2000 and the deal is expected to close in late February.

Houston-based Newfield Exploration Co. made David A. Trice CEOeffective today, replacing Joe B. Foster who resigned as CEO butwill remain as chairman and be involved with the company in anon-executive role. Foster, a director of Baker Hughes Inc. since1990, has been made interim CEO of that company in the wake of theresignation of Max L. Lukens. Foster resigned his Newfield positiontwo weeks ahead of the planned date of Feb. 15 to accept thetemporary post at Baker Hughes. Foster founded Newfield in 1989after serving as executive vice president of Tenneco Inc. andChairman of Tenneco Oil.

North American exploration and production in 2000 will be nearlyall about gas and all about independents, with spending plans ofthe majors largely forsaking this country for opportunitiesoverseas. That’s one finding of Lehman Brothers, which from Nov. 6to Dec. 10 surveyed 320 companies in what it calls “the mostextensive study of oil company spending plans that has ever beendone.”

EnerMark Income Fund of Calgary offered to acquire all shares ofWestern Star Exploration Ltd. by way of a take-over bid. WesternStar assets are mainly producing gas properties concentrated in theHanna, Taber and Thornbury areas of Alberta. EnerMark’s estimate ofWestern Star’s proven reserves total 36,855 MMcf of gas and 147MBoe of crude oil and gas liquids. These reserve volumes includethe results of a successful 21-well gas development program atHanna Garden.

David A. Trice was named Joe B. Foster’s successor as CEO ofHouston-based Newfield Exploration Co. effective Feb. 15 whenFoster vacates the position as part of his retirement plans.Foster, a principal founder of Newfield, will continue as chairman.Newfield is an independent oil and gas company active in the Gulfof Mexico, along the U.S. Gulf Coast and off Australia.

Newfield Exploration Co. announced yesterday that the A-2 gaswell blowout on the Ship Shoal 354 production platform has beencapped and stabilized. The blowout occurred Sept. 9 andself-ignited on Sept. 12. Newfield operates the platform, which islocated about 140 miles south of New Orleans, LA, in 463 feet ofwater. There were no injuries associated with the blowout or thewell capping operations and pollution from the event has beenminimal, the company said.

MCN Energy followed through as planned on the previously announcedsales of its Midcontinent/Gulf Coast exploration and production(E&P) properties and subsidiaries. Undisclosed privately heldcompanies paid about $105 million for the assets, which are primarilylocated in Texas and Oklahoma. Proceeds from the sales will helpstrengthen MCN’s balance sheet by reducing its debt. At year-end 1998,these Midcontinent/Gulf Coast assets represented 144 Bcfe of reserves,or 12% of the 1.2 Tcfe of proved reserves on MCN’s books. About 80% ofthe reserves sold were gas. MCN announced earlier in August that,consistent with its new regional, operating strategy, the company willretain its natural gas producing properties in Michigan (see Daily GPIAug. 3). Negotiations continue on theremaining Appalachian E&P package.

Using new technology to increase transport speed from thewellhead to the pipeline, Mobil Exploration & Producing U.S.Inc. said it recently commenced selling gas from the newly streamedMobile 822 No. 6 well, in the Gulf of Mexico. The company said theprocess, which took 369 days, was its fastest drill-to-salesoperation to date in the Mobile Bay.