Hills

Stabilis Energy and Koch Industries unit Flint Hills Resources LLC plan to build up to five liquefied natural gas (LNG) liquefiers to serve oilfield fuel consumers. Their first project is slated for the Eagle Ford Shale.

Chesapeake Energy Corp. has completed sales of its Permian Basin properties, which allows it to reduce the outstanding balance on existing term loans to $1.2 billion from $4 billion by the end of this month. The company said it plans to fully repay the term loans by the end of the year. The assets sold produced close to 21,000 b/d of liquids and 90 MMcf/d of natural gas in 2Q2012, or about 5.7% of Chesapeake’s production during the period. The multi-sales package was announced in September (see Shale Daily, Sept. 13). SWEPI LP, a subsidiary of Royal Dutch Shell plc, bought the southern Delaware Basin assets, while the northern Delaware Basin portion was sold to Chevron U.S.A. Inc., a subsidiary of Chevron Corp. The producing assets in the Midland Basin were sold to affiliates of Houston-based EnerVest Ltd.

Another study is under way to look at hydraulic fracturing (fracking) and increased seismic activity in an urban oilfield sitting in a hilly southwest residential portion of Los Angeles. The producer in the crosshairs of skeptics, Plains Exploration and Production Co. (PXP), is undaunted in its efforts to try to make increased drilling activity in a mostly residential area work, according to local news reports.

Rapid City, SD-based Black Hills Corp.’s Cheyenne Light, Fuel & Power utility said it has filed with the Wyoming Public Service Commission to recover natural gas and electric infrastructure costs with its first general rate increase request since 2008. The company seeks annual increases of $2.6 million, or 6.7%, for gas utility customers and $5.9 million, or 5.9%, for power consumers. The combination utility also is seeking a 10.9% authorized return on equity and a 54-46% equity-to-debt ratio as part of the rate request to be effective April 1 next year. Residential customers using both electricity and gas would face a combined average monthly utility bill increase of close to $10 ($5.14/month for gas and $4.33/month for electricity). Cheyenne Light serves 34,600 gas customers and 39,600 electric customers.

Rapid City, SD-based Black Hills Corp.’s Wyoming combination utility proposed Monday to build and operate a $158 million natural gas-fired electric generation peaking facility in the city of Cheyenne. In a filing to the state Public Service Commission (PSC), Cheyenne Light, Fuel & Power proposed the development of three 40 MW simple-cycle peaking units. If approved by the PSC, the utility plans to begin construction in 2013 and have the facility operable by 2014. Located within close proximity to existing power lines, the proposed plant would provide added tax benefits and electric reliability for customers, according to the utility. Mark Stege, vice president for operations, called the proposal the “right investment” to serve increasing electric demand in the area and maintain “reliability that customers expect from our company.”

Over the next few years much of the gas industry is expected to be heading for the hills of Appalachia with projects to process and pipe natural gas from the Marcellus Shale. Analysts at Tudor, Pickering, Holt & Co. Securities Inc. (TPH) think that from 2009 to 2013 more than $10 billion will be spent on gas infrastructure in the region.

Over the next few years much of the gas industry is expected to be heading for the hills of Appalachia with projects to process and pipe natural gas from the Marcellus Shale. Analysts at Tudor, Pickering, Holt & Co. Securities Inc. (TPH) think that from 2009 to 2013 more than $10 billion will be spent on gas infrastructure in the region.

Energy Capital Partners (ECP) has formed Summit Midstream Partners LLC to acquire and develop midstream assets in traditional and emerging North American production basins and import centers with an initial focus on the Barnett Shale.

Diversified energy and utility holding company Black Hills Corp. said Wednesday that CFO Mark Thies resigned for “personal considerations and health” effective Friday. CEO David Emery will fill in as CFO for an interim period. Emery said the Rapid City, SD-based company has retained an executive search firm to assist in identifying a replacement for Thies, who had been with the company 10 years. The company has retail and wholesale utility and merchant energy businesses in South Dakota, Wyoming, Montana and other states.