Leases

XTO Energy Corp., which holds leases in some of the biggest natural gas prospects in the United States, is on the prowl for even more acquisitions, fueled by an expectation of $10/Mcf gas prices through at least the rest of the year.

Calgary-based Paramount Resources Ltd.’s shares tumbled on news Friday that it will sell its oilsands leases and shut-in and producing natural gas rights in the Surmont area of northeastern Alberta to MEG Energy Corp. for C$301.7 million (US$284.2 million).

Rapid City, SD-based Black Hills Corp. Wednesday completed its $24.1 million acquisition of third party ownership interests and leases associated with the property it had acquired last March from Koch Exploration Co. in Colorado’s Piceance Basin. For the rest of this year, the company’s CEO said it will focus on increasing production from existing wells, holding off drilling new wells until next year.

Two Democratic energy lawmakers have called on the Government Accountability Office (GAO) to review why so many federal onshore and offshore oil and natural gas leases are going undeveloped, as well as determine if the federal government is receiving a “fair price” for its energy resources.

Houston-based Dune Energy Inc. has acquired interests in about 320 acres of oil and natural gas leases and four producing wells in Denton County, TX for $5.4 million, and another parcel of properties in Denton and Wise counties from Voyager Partners Ltd. for $68.3 million. All of the assets are located in the Barnett Shale region, near Fort Worth. Closing on the assets is expected by Dec. 15. A reserve report as of Dec. 31, 2004, prepared by independent petroleum engineering firm DeGolyer & MacNaughten, indicated there are 27 Bcfe of net proved reserves underlying the Voyager properties. Since that date, based upon an internal evaluation, Dune believes Voyager has added as much as an additional 18 Bcfe in proved reserves to the properties being acquired, bringing the total to 45 Bcfe. Dune also set up a credit agreement, which provides for a revolving credit commitment of up to $50 million with sub-limits of $13 million, and $16 million, respectively, for term loans, subject to certain covenants and conditions. Additional financing totaling $25 million of subordinated debt is also in place. The company has drawn down a $6 million revolving loan under the agreement in connection with the purchase of some of the Barnett Shale assets. Dune’s operations are concentrated onshore the Louisiana/Texas Gulf Coast as well as the Barnett.

Williams said Thursday it has signed agreements to transport oil and natural gas for the life of the leases in the Blind Faith field in the deepwater Gulf of Mexico for joint owners Chevron Corp. and Kerr-McGee Corp. The field has an estimated gross resource potential of more than 100 million boe, and initial production is expected to be 30,000 bbl/d of oil and 30 MMcf/d of natural gas.

NGAS Resources, Inc. announced Thursday an agreement to acquire approximately 23.2 Bcfe of proved gas reserves and 75,000 gross acres (61,875 net acres) of leases for $27 million, or $1.16 per Mcfe. The privately negotiated transaction includes substantially all the assets of Stone Mountain Energy Co., L.C. located in Bell, Harlan, and Leslie Counties, Kentucky, and Lee County, Virginia. The assets to be purchased include 113 oil and gas wells currently producing approximately 2,700 Mcfe/d. Gas production is delivered through a gathering system owned by Duke Energy Gas Services. “This major acquisition paves the way for future growth in line with our long-term strategic plan,” said William S. Daugherty, President of the Lexington, KY-based NGAS. “Our acreage position in the Appalachian Basin will be expanded to over 250,000 gross acres (170,000 net acres). The acquisition will also boost our current net daily production to approximately 5,000 Mcfe/d and will increase our proved oil and gas reserves to approximately 55 Bcfe, not including 2004 reserve adjustments. This transaction offers us opportunities to expand our throughput to major natural gas markets serviced through Duke’s system and strengthen our competitive position in the region.” NGAS changed its name from Daugherty Resources in June 2004.

After finalizing new technology that will speed up construction times on liquefied natural gas (LNG) facilities, ExxonMobil Upstream Research Co. said Friday that it has licensed the patented LNG storage tank technology to U.K.-based Skanska Whessoe, an engineering, procurement and construction contractor with specialized, worldwide experience in storage and handling of low-temperature fluids.

After finalizing new technology that will speed up construction times on liquefied natural gas (LNG) facilities, ExxonMobil Upstream Research Co. said that it has licensed the patented LNG storage tank technology to U.K.-based Skanska Whessoe, an engineering, procurement and construction contractor with specialized, worldwide experience in storage and handling of low-temperature fluids.