Lomak, Domain to Merge, Form Large Independent

Lomak Petroleum and Domain Energy Corp. said they will merge toform a company with a reserve base of nearly 1 Tcf in gasequivalents, reserve life of 12 years and extensive development andexploration opportunities. The company to be created will be calledRange Resources Corp. and will have total assets exceeding $1.1billion.

May 13, 1998

Transportaion Notes

Nautilus Pipeline said it is on track to begin receiving gasagain at Ship Shoal 207 at the start of the May 1 gas day.Processing of a large condensate slug at Exxon’s Garden City Plantonshore Louisiana (see Daily GPI, April 17) is expected to becompleted by Thursday.

April 29, 1998

Chevron Discovers New Gas Trend Offshore MS

Chevron U.S.A. Production Co. announced the discovery of a largenew natural gas trend offshore Mississippi in the Gulf of Mexicothat could hold 1 Tcf of gross reserves. Chevron said the VioscaKnoll Carbonate Trend is unique to the Gulf in part because of itssize and because it’s the first offshore gas reserves to originatefrom Lower Cretaceous reservoirs. The Lower Cretaceous, however,has been productive onshore in Texas, Louisiana and in Mexico.

April 24, 1998

NGC Releases First Batch of El Paso Capacity

Under pressure at FERC for buying such a large chunk (40%) ofthe firm transportation capacity to California on El Paso NaturalGas, NGC Corp. announced late yesterday it is releasing 593,122MMBtu/d, or about 40% of the capacity it holds on the pipeline fora one-month term. It is the first quantity of transportationcapacity NGC has released since its negotiated contract with ElPaso became effective Jan. 1 and may appear to be a response toprotesters who have accused the marketing firm of withholdingwestbound capacity in order to prop up capacity prices. “It’spressure from the hearings at FERC last month,” said one observer.A spokeswoman had no comment on why the firm was releasing thecapacity. Demand remains strong in California despite the start ofa shoulder month. “Our goal is not to corner the market but ratherto use what we can,” one NGC marketer said cryptically.

April 7, 1998

Great Lakes Files $620 Million Expansion

Great Lakes Gas Transmission filed a large but downsized versionof its original 1999-2000 expansion project with FERC last Fridayon behalf of a single shipper, TransCanada PipeLines. The projectis expected to cost $620 million and begin operating in November2000. The Great Lakes 300 Expansion will involve the addition of260 miles of 36-inch diameter pipeline loops, including a newunderwater crossing of the Straits of Mackinac, and seven newcompressors adding 180,000 hp of compression. Great Lakes’ systemcurrently transports about 2 Bcf/d of Canadian gas from Emerson,MB, through Minnesota, Wisconsin and Michigan.

March 31, 1998

Volatility Returns to The Nymex Trading Pit

The April Nymex contract finally broke out of its recent tradingrange by falling a relatively large 8.7 cents to $2.141 onThursday. “Today was massive long liquidation by funds, coupledwith weaker cash prices,” a broker told NGI. “The market droppedbelow the magic 40-day moving average (at $2.205), and fell belowtrendline support at $2.19. Both those things triggered a series ofstop loss orders, which helped propel April even lower. April lookspretty negative on the charts. There was a lot of technical damagetoday. The market will most likely want to continue to test thedown side,” he said.

March 6, 1998

NGC-El Paso Contracts to Take Center Stage at FERC

The controversy over the terms and conditions of the contractsgiving Natural Gas Clearinghouse a large bite of the westboundtransportation capacity on El Paso Natural Gas – capacity that wasdestined to be turned back to the pipeline at the end of last year- is expected to take center stage at FERC next week. Marketers andproducers say they plan to make a case that the contracts areanticompetitive and contain illegal negotiated terms andconditions, and are responsible for the run-up in transportationrates on El Paso’s system to the California border.

February 27, 1998
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