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Houston-based Plains Exploration & Production Co. (PXP) has completed the sale of its remaining interests in some properties located in the Permian and Piceance basins to Occidental Petroleum Corp. (Oxy) and to some undisclosed companies with contractual preferential purchase rights for a total of $1.25 billion in cash. Oxy in September agreed to acquire the stakes (see Daily GPI, Sept. 26). In late 2007 Oxy paid PXP a total of $1.55 billion for a 50% stake in PXP’s Permian and Piceance leaseholds (see Daily GPI, Dec. 18, 2007). The Permian and Piceance basin assets have net production of around 52 MMcf/d of gas and 4,300 b/d of liquids, or 13,000 boe/d. The properties also have about 92 million boe of proved reserves, 45% developed and 69% weighted to gas. PXP is expected to use the proceeds to develop a joint venture with Chesapeake Energy Corp. in the Haynesville Shale (see Daily GPI, July 2).

EL Paso Natural Gas Co. (EPNG) is holding a binding open season for a proposed new 2 Bcf storage facility, comprised of four salt caverns, to be located in Pinal County, AZ. The in-service date of the first cavern is scheduled for 2013.

Northwest said it will lift the Stage II (8% tolerance) Overrun Entitlement for receiving parties located north of Plymouth Compressor Station Friday. Northwest continued to advise customers not to draft its system north of Kemmerer Compressor Station in order to preserve north-end balancing gas needed to meet upcoming winter demand and help mitigate OFOs.

BP America Inc. has discovered oil and gas at its Freedom Prospect, also known as the Gunflint prospect, in the deepwater Gulf of Mexico (GOM). The well, located 70 miles southeast of the Louisiana coast in Mississippi Canyon Block 948, is in about 6,100 feet (1,860 meters) of water. The Freedom well was drilled to a total depth of 29,280 feet (8,927 meters) and encountered more than 550 net feet of hydrocarbon-bearing sands in Middle and Lower Miocene reservoirs. Appraisal will be required to determine the size and commerciality of the discovery. The Freedom well is BP’s third discovery in this part of the deepwater GOM following its Tubular Bells and Kodiak discoveries. The well is operated by BP Exploration & Production Inc., a subsidiary of BP America Inc., which has a 25% working interest, and includes co-owners Noble Energy Inc., with a 37.5% working interest, Samson Offshore Co., with a 25% stake, and Marathon Oil Co., which has a 12.5% stake. The lease was acquired by Noble Energy and Samson Offshore in March 2006.

Determining the amount of damage inflicted on energy infrastructure located onshore and offshore the Texas and Louisiana coasts proved difficult Monday as the area began its painful recovery from Hurricane Ike’s impact. The Category Two hurricane slammed into Galveston, TX, around 2 a.m. Saturday, and its winds apparently destroyed at least 10 offshore production platforms. The biggest problem facing the Gulf Coast was a lack of power — a problem that could take up to four weeks to remedy, officials said.

Indigo-Energy Inc., a junior explorer that focuses on prospects located in the Upper Devonian sand formations of Kentucky, Pennsylvania and West Virginia, plans to spend $686.4 million to develop about 135,000 acres in the Illinois Basin, an emerging natural gas play that straddles portions of southern Illinois, southwestern Indiana and western Kentucky. The Illinois Basin covers about 60,000 square miles. Indigo, based in Henderson, NV, obtained the funds through a loan agreement with BJ Petro Inc., a Nevada corporation. Indigo also won mineral rights in Greene County, PA, and in Monongalia County, WV.

CIG declared a force majeure event after an unexpected outage at Kim Compressor Station, located on the Campo Lateral (CS1) constraint point. Engine components must be sent to an external repair facility, CIG said, and it estimated the station’s return to service at approximately one week. Capacity at CS1 was reduced from 414 MMcf/d to 355 MMcf/d Thursday.

FERC approved Caledonia Energy Partners LLC’s (CEP) proposal to expand to 16.9 Bcf its 11.7 Bcf storage facility located in Monroe and Lowndes counties in northeast Mississippi. The expansion is expected to increase maximum daily withdrawal capability to 477 MMcf/d from the current 330 MMcf/d.

For the third month in a row, Double Eagle Petroleum Co. broke a record for natural gas production at its Catalina Unit, an emerging coalbed methane play located in the Atlantic Rim of Wyoming.