Focus

Upstream production, mostly focused in North America and northwestern Europe, is the new ConocoPhillips’ strategy going forward, with up to 75% of the capital deployed toward exploration and production, the company’s E&P chief said Wednesday. Although the combined companies’ current production mix is 59% oil and 41% natural gas, by mid-decade gas production will be close to half.

Sen. Dianne Feinstein (D-CA) has called on the Federal Energy Regulatory Commission to pay close attention to natural gas traded between November 2000 and May 2001 as it continues to investigate allegedly fraudulent and manipulative trading practices in California and other western energy markets during the critical 2000-2001 period.

The National Petroleum Council (NPC) voted last Wednesday to conduct a comprehensive new study on natural gas at the request of the Department of Energy to “examine the potential implications of new supplies, new technologies, new perceptions of risk, and other evolving market conditions that may affect the potential for natural gas demand, supplies and delivery through 2025.”

Noting that its objective is to focus on North Texas as its core area of development, Empire Energy Corp. on Wednesday signed a letter of agreement to purchase, for an undisclosed amount of cash and stock, additional oil and gas interests in the Fort Worth Basin of North Central Texas. It already owns a 50% working interest in production acreage of the Old World Prospect in Parker County, and will purchase the remaining 50% along with a 100% interest in three other properties in the same area. Empire also will take over as lease operator. Headquartered in Overland Park, KS, Empire’s current reserves in the Texas prospect total about 290 MMcf. At closing on the new properties, Empire’s total reserves will surpass 1.045 MMcf of proved reserves, not including potential reserves in the prolific Barnett Shale, which underlies the newly purchased acreage. Empire said that the new leases have existing gas production with gas gathering facilities in place. After some upgrades and recompletion activities are performed on the existing gas production facilities, Empire plans to drill several test wells in the Barnett Shale, and if results are positive, will begin a full field development plan to include up to 50 wells. The Old World Prospect purchase is expected to close within the next month.

Noting that its objective is to focus on North Texas as its core area of development, Empire Energy Corp. on Wednesday signed a letter of agreement to purchase, for an undisclosed amount of cash and stock, additional oil and gas interests in the Fort Worth Basin of North Central Texas. It already owns a 50% working interest in production acreage of the Old World Prospect in Parker County, and will purchase the remaining 50% along with a 100% interest in three other properties in the same area. Empire also will take over as lease operator.

In keeping with its plan to merge with National Grid USA and focus on regulated energy transmission and distribution businesses, Niagara Mohawk Holdings Inc. on Tuesday sold its unregulated energy marketing and services subsidiary to Select Energy Inc., a subsidiary of Northeast Utilities. Terms of the sale of Niagara Mohawk Energy Marketing Inc., were not disclosed.

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.

Ivanhoe Energy and Unocal said Monday their 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.

While energy analysts remain shell-shocked following the brazen terrorist attacks on the nation’s financial distriction and admit they have “no answers” for industry, some predict that the war-provoking events may cause the public, Capitol Hill lawmakers and investors to look more favorably upon North American energy producers, service companies and pipelines.