H. Ross Perot, the founder of Plano, TX-based Perot System Corp., will testify July 11 before the California state senate’s investigative committee looking at alleged energy market manipulation in the state’s 2000-2001 electricity crisis. Perot’s appearance is voluntary, but a state legislative committee staff member said there still may be subpoenas eventually directed at Perot and his firm. The center of the controversy is a PowerPoint presentation on “holes” in the state’s newly restructured electricity market that Perot Systems help set up in 1997-98 from an information systems perspective under contract to two state entities — the transmission grid operator, Cal-ISO, and the now bankrupt California Power Exchange (Cal-PX). As part of subpoenaed information from Houston-based Reliant Energy, a copy of the Perot Systems’ presentation came into the hands of investigators with the state senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market.
July
Articles from July
Industry Brief
Several former Enron Corp. executives, who left the company last July and long before it spiraled into bankruptcy, have launched Celeren Corp., which will provide risk management energy services through the sale of energy outsource products for small- to mid-sized businesses and institutions. The Philadelphia-based company also will offer independent power generation services. Celeren, which will serve customers nationwide, will offer commodity procurement and management; capital improvements; financing; and operation and maintenance. Thomas A. Brigger, former Mid-Atlantic regional manager for Enron Energy Services (EES) is CEO and Donald S. Parker, a former regional director for EES, is COO.
U.S. Rig Count Down Slightly, Canada Up
The U.S. rig count for August was 1,252, down 26 from a month earlier, when there were 1,278 rigs, while the Canadian rig count was up by six to 325 from the 319 it posted in July, according to Baker Hughes latest rig survey. However, the U.S. rig count still held constant from its climb of a year ago, up 265 from the 987 rigs counted in August 2000.
Global Marine, Simmons Paint Dim GOM Drilling Picture
Global Marine’s worldwide SCORE, or Summary of Current Offshore Rig Economics, for July 2001 dropped 0.3% from the previous month’s SCORE as dayrates continued to decline, particularly in the Gulf of Mexico. Rapidly declining natural gas prices this year have had a dampening affect on drilling activity in the Gulf.
Global Marine, Simmons Paint Dim GOM Drilling Picture
Global Marine’s worldwide SCORE, or Summary of Current Offshore Rig Economics, for July 2001 dropped 0.3% from the previous month’s SCORE as dayrates continued to decline, particularly in the Gulf of Mexico. Rapidly declining natural gas prices this year have had a dampening affect on drilling activity in the Gulf.
Transportation Notes
Tennessee delayed the start of a maintenance outage on its 500 Line, previously set for today (see Daily GPI, July 27), until Monday. Tennessee anticipates restricting and sealing 40-65% of Secondary services through the end of the month at meters upstream of Station 530, and will not accept any nominations at the Lake Borgne meter Aug. 11-23.
Chevron Begins Gulf Production at Typhoon
Chevron U.S.A. Production Co. reported that oil and gas production began July 29 at its most recent deepwater Gulf of Mexico prospect. Depending upon well performance, production from the Typhoon field is expected to reach about 40,000 b/d of crude oil and about 60 MMcf/d during the fourth quarter 2001. Chevron estimates the commercial life of the Typhoon field to be five to eight years.
Futures Spike, Then Plummet on Big Storage Refill
The July Fourth holiday only delayed by a day the inevitable whiplash that gas futures typically cause on Wednesdays. Thursday opened with bang as August futures gapped about 8 cents higher at the opening bell, but the contract proceeded to do a nosedive in anticipation of another large storage refill. When the American Gas Association reported the ninth 100+ Bcf storage injection in 10 weeks (105 Bcf), futures plummeted to a new low of $3.040. However, the contract encountered surprising support there and managed to rebound to $3.136, down only 6.5 cents for the day.
Industry Briefs
Energy Search Inc. announced that it will hold a special meeting of its common and preferred shareholders on July 19 in Knoxville, TN, to vote on a proposal to approve the merger of Energy Search and EOG Resources Inc. and to approve the transactions proposed by the merger agreement. If the merger and related transactions are approved, shares of Energy Search common stock and preferred stock will be converted to the right to receive $8.22 in cash. Only those persons who owned common stock or preferred stock of Energy Search at the close of business on the first of June will be entitled to vote on the proposal. The board of directors of Energy Search said it unanimously recommends that stockholders vote for the merger proposal. Under the agreement first announced in late May (see Daily GPI, May 24), EOG Resources said total consideration for Energy Search would equal about $37.6 million. Energy Search is an independent oil and gas exploration and production company focused primarily on developmental drilling and production of natural gas reserves in the Appalachian Basin. Energy Search holds 75 Bcfe of reserves and produces about 7 MMcf/d of Appalachian natural gas. Its proven reserves increased 17.9% in 2000 compared to 1999.
Industry Briefs
Tenaska Inc. and Kiowa Power Partners LLC announced that construction will begin in early July on the Kiamichi Energy Facility, a 1,250 MW natural gas-fired, electric generating facility in Pittsburg County, OK, south of Kiowa. Omaha-based Tenaska will act as lead developer, taking responsibility for the project’s final-stage development, financing and construction. The facility will be located on a 100-acre site approximately three miles south of Kiowa, just west of U.S. Highway 69. When operational in 2003, the power generated will be able to meet the energy needs of more than a million homes, the companies said. BVZ Power Partners-Kiowa has been tapped to build the project.