Mexico

Industry Briefs

Reliant Energy International Inc. said it has sold its 50%indirect interest in a natural gas distribution company alongMexico’s Gulf Coast. Tractebel purchased Gas Natural de Rio Panucofrom an indirect subsidiary of Reliant and its Mexican partner,Corporacion Gutsa SA de CV (Gutsa) for $8.5 million. NorAm Energy,which was acquired by Reliant Energy in August 1997, partnered withGutsa to win a 30-year concession to build, operate and maintain anatural gas system in the northeastern Mexican state of Tamaulipas.The area includes the cities of Tampico, Ciudad Madero andAltamira, which lie in the Panuco River Basin, and has a totalpopulation of one million.

November 29, 1999

Gulf RIK to Begin With 260 MMcf/d

The federal government will begin accepting royalty-in-kind(RIK) for some Gulf of Mexico gas production beginning Dec. 1 inwhat will be the Minerals Management Service’s (MMS) third ongoingRIK pilot.

October 11, 1999

MMS Beginning RIK Pilot in the GOM

The Department of the Interior’s Minerals Management Service(MMS) is beginning its third royalty-in-kind (RIK) pilot, puttingit in the business of selling Gulf of Mexico (GOM) gas productionit accepts in place of cash royalties. The pilot is intended totest a different approach to RIK, using a competitive auction tomove up to 260 MMBtu/d initially.

October 8, 1999

Industry Briefs

Coastal Oil & Gas and Santa Fe Snyder have exchangedproperties in Utah, Wyoming, Texas and the Gulf of Mexico “toconsolidate assets into core areas for each company. Coastalreceived interests in six GOM blocks, plus the Jeffress Field inSouth Texas and 97,000 acres in Uintah and Duchense Counties inUtah. Coastal also received a cash payment of $18 million. Santa FeSnyder received interests in 22 Wyoming fields in the Green RiverBasin and three units in Gaines County, TX, in the Permian Basin.

September 21, 1999

Bret Spares Western Gulf Producers

As Tropical Storm Bret was downgraded from hurricane statusMonday, offshore producers in the western region of the Gulf ofMexico breathed a major sigh of relief. Their personnel andplatform facilities had completely escaped Bret’s wrath over theweekend, with producers reporting no damages and only nominalvolumes of shut-in production.

August 24, 1999

Questar Expects Southern Trails Delay

The proposed Southern Trails Pipeline from the Paradox Basin ofNew Mexico to Long Beach, CA, could be delayed three to six monthsbecause of additional environmental assessment work underway aspart the federal and state regulatory processes, according to aSalt Lake City-based spokesperson for Questar Corp., which boughtthe pipeline for $40 million last year from ARCO. Nevertheless, theconverted 700-mile pipeline should be bringing 120 to 130 MMcf/d ofgas into California by the end of next year at the latest.

August 23, 1999

Questar Expects Southern Trails Delay

The proposed Southern Trails Pipeline from the Paradox Basin ofNew Mexico to Long Beach, CA, could be delayed three to six monthsbecause of additional environmental assessment work underway aspart the federal and state regulatory processes, according to aSalt Lake City-based spokesperson for Questar Corp., which boughtthe pipeline for $40 million last year from ARCO. Nevertheless, theconverted 700-mile pipeline should be bringing 120 to 130 MMcf/d ofgas into California by the end of next year at the latest.

August 20, 1999

American Gas Storage Survey

Natural Gas Intelligence the weekly gas market newsletter

August 16, 1999

Briefs

Looking to spread its presence in the Gulf of Mexico, OceanEnergy Inc. (OEI) entered into a drilling agreement with DukeEnergy Hydrocarbons, LLC to jointly develop 13 OEI drillingprospects in the outer continental shelf. The Duke subsidiaryagreed to participate with up to 50% non-operating working interestin the program. The two companies anticipate drilling costs willexceed $40 million for the rest of 1999.

July 12, 1999

In Brief

The Interior Department’s Minerals Management Service hasscheduled a meeting in Houston to discuss implementation of itsGulf of Mexico Royalty In-Kind pilot program, which is slated tobegin in October. The three-year program will involve thecollection and sale of as much as 800 MMcf/d of royalty gas fromfederal leases in the Gulf. It is the MMS’s third RIK pilot, all ofwhich are being conducted to determine the feasibility andeconomics of accepting royalties in kind rather that as a cashpayment from lessees. The meeting on the Gulf RIK will begin at 10a.m. on July 20 at the MMS Houston Compliance Division Office RM104, 4141 Sam Houston Parkway East. It is open to the publicwithout reservation. Lessees, operators, payers and potentialpurchasers are encouraged to attend.

July 5, 1999