Explore

Ivanhoe Energy and Unocal have entered into a 50-50 joint venture to explore for oil and natural gas in East Texas will focus on the Bossier Sand prospects in more than 46,000 gross acres (37,000 net) in a three-county area. Unocal will become operator and will fund the drilling costs for several exploration wells to offset the $10 million in leasehold, seismic and processing costs incurred by Ivanhoe. Once “investment equilibrium” is reached, the companies will become equal partners. The Bossier sand trend consists of multiple fields and multiple pay zones, with typical wells producing between 2-4 MMcf/d at an average depth of 12,000 feet. Ivanhoe officials noted that Anadarko Petroleum Corp., the area’s largest operator, has drilled more than 300 Bossier wells, achieving a success rate of “virtually 100%.” Drilling is expected to begin on Ivanhoe’s and Unocal’s Lone Star and Creslenn Ranch prospects. Following a successful exploration phase, Ivanhoe intends to project-finance its share of field development costs.

Washington Gas Light Co. last week called on FERC to schedule aformal hearing to explore concerns of distribution customers thatthe liquefied natural gas (LNG) to be imported by Williams’ CovePoint LNG facility will meet the standards for pipeline-qualitygas.

While the Yukon and Alaska claimed the lead, Canada’s NorthwestTerritories remained far from forfeiting as action heated up onboth sides of the international rivalry to be first to takeadvantage of surging natural gas markets with Arctic supplies.

Denver-based Forest Oil. Corp. and Shell Canada Ltd. have agreedto jointly explore and develop a 162-square mile area of theSouthern Foothills near Waterton, AB. Forest will have a 40%working interest in the joint venture, and expects to spend $10million to $15 million in the next year.

Electric market participants in the Northeast last week resolvedto further explore whether the region should become one broadregional transmission organization (RTO) or whether it should bebroken up into smaller RTOs.

Pinnacle West Energy and Houston-based Reliant Energy PowerGeneration, Inc. announced a preliminary agreement last week tojointly develop power plant projects in the Southwest totaling morethan 2,500 MW of generation in Arizona and Nevada. A definitivedevelopment agreement on plant construction and operation isexpected to be signed within 120 days.

Electric market participants in the Northeast last week resolvedto further explore whether the region should become one broadregional transmission organization (RTO) or whether it should bebroken up into smaller RTOs.

After about half a year of negotiations, a first step has beentaken towards filling in the last missing link in the Canadianeast-west pipeline grid for natural gas. The Quebec and NewBrunswick governments set a date of Feb. 28 for a formal signingceremony for an agreement-in-principle on promoting construction ofa gas link between their provinces.

The U.S. Attorney’s office in Washington D.C. has begun toexplore the possibility of criminal action in the case involvingNicholas J. Bush, former president of the Natural Gas SupplyAssociation (NGSA), who was relieved of his duties two weeks ago inthe wake of allegations that he defrauded the trade group of morethan $2.4 million over a 12-year period. NGSA made the allegationsin a lawsuit it filed two weeks ago.