Initially

Newfield Exploration Co. has signed another joint venture agreement with ExxonMobil Corp., this one to explore and develop 87,000 gross acres in South Texas that will target the prolific Vicksburg Trend. Newfield, which will equally participate with ExxonMobil in the venture, said it expects to have an active drilling program in the area over the next three years. Newfield, which owns interests in about 482,000 gross lease acres in South Texas, has been active in the region since 2000. Current net production from the region is 230 MMcfe/d. The latest agreement covers properties in Kenedy, Brooks and Hidalgo counties, which complements Newfield’s existing activity areas. Expenditures associated with the South Texas drilling program are estimated at $245 million, or about 15% of Newfield’s 2008 capital budget. Newfield has an existing joint venture agreement with ExxonMobil, also in South Texas. The existing agreement covers the Sarita Field area of Kenedy County, where Newfield expects to drill 10-12 additional wells this year (see NGI, Feb. 11).

More than a decade after it was first announced and eight years after it was initially proposed to open, Millennium Pipeline Co. LLC’s 182-mile long, 30-inch diameter pipeline across New York’s Southern Tier and the lower Hudson Valley will go into operation this November, the company said Tuesday.

Natural gas is being left out initially in California’s preliminary recommended auction for greenhouse gas (GHG) emissions allowances as part of a proposed cap-and-trade system for lowering the energy sector’s carbon footprint in the state by 2020 under a climate change law’s mandate. However, there is no consensus on this or other issues, such as cost, treatment of public-sector utilities, and the needed safeguards and monitoring of the allowance trading market.

El Paso Natural declared a Strained Operating Condition (SOC) for a Draft condition on its entire system Friday. The imbalance tolerance was set initially at 10%, but El Paso said it would reduce the tolerance level if conditions did not improve sufficiently. “A combination of receipt underperformance and takes in excess of scheduled quantities has resulted in a substantial loss of linepack on EPNG’s system with linepack at approximately 7,200 MMcf,” the pipeline said. “Washington Ranch [storage facility] is on withdrawal at maximum rate.”

Alberta natural gas royalties will rise, but a year later than initially proposed and the increase will be less than two-thirds of what had been demanded by a government-appointed revenue inquiry.

XTO Energy Inc. built its position in the Barnett Shale of Texas by 24,000 net acres last week in a private $550 million acquisition. Initially the properties, with estimated proved reserves of more than 200 Bcfe, will add about 25 MMcfe/d to XTO’s production base, but company engineers have identified another 300-350 drilling locations, which offer the potential to more than double the holdings’ reserves.

Alberta natural gas royalties will rise, but a year later than initially proposed, and the increase will be less than two-thirds of what had been demanded by a government-appointed revenue inquiry.

The New York State Public Service Commission (PSC) plans to review the programs and practices initially established to encourage market development of retail electric and natural gas access to determine whether they may have outlived their usefulness and could be allowed to expire or whether the costs of the programs could be shifted from ratepayers to market competitors. PSC Chairwoman Patricia L. Acampora said there currently are more than 100 energy service companies (ESCO), which serve more than 1.3 million customer accounts, with about 40% of the state’s electric usage and 46% of natural gas usage met by ESCOs or through other alternatives to utility supply. The PSC is seeking proposals to modify the existing retail access programs and practices to better align the programs and practices to the current state of market development. Additionally, the PSC said it could consider changes to proposals in future rate proceedings with the understanding that it may be necessary to defer to the generic process in reaching a decision on any particular policy or program. Proposals on Case No. 07-M-0458 may be submitted to the PSC until June 7. Reply comments may be filed until June 27. For information, visit the website at www.dps.state.ny.us.

Crosstex Energy LP last week announced the start-up of its $90 million pipeline expansion in northern Louisiana, which initially adds capacity of 200 MMcf/d to the company’s existing Louisiana Intrastate Gas (LIG) pipeline system, the state’s largest intrastate pipeline network.