Months

In the wake of a well blowout and fire that burned for months inthe oil/gas saturated area between Bakersfield and the Elk Hillspetroleum reserve, a flood of small and medium-size Canadianbackers have moved into this old production region 100 miles northof Los Angeles, betting that new significant pools of natural gascan be found with deep-drilling below 15,000 feet.

After six months of construction, the Thunder Creek Pipelinebecame operational earlier this month, Thunder Creek Gas Servicessaid. The 126-mile 450 MMcf/d trunkline system, which carries gasproduced from the Powder River Basin in Northeast Wyoming, begandelivering gas into the KN Interstate system on Sept.1.Construction of the line was completed last month. Thunder Creekalso has interconnects with the CIG system, Wyoming InterstateCo.’s proposed Medicine Bow Lateral and KN’s proposed Pathfinderline. The estimated cost of the Thunder Creek gathering trunkline,related compression and the processing plant is $100 million.Thunder Creek Gas Services is a joint venture between KN Energy andDevon Energy. Two other projects designed to transport gas from thebasin, the Fort Union Gathering project and the Northern Header GasGathering project, are still in construction. Fort Union GasGathering project, a 106-mile system, currently is being built by aconsortium of five companies. The Northern Header Gas Gatheringproject is a 256-mile system that would move up to 500 MMcf/d fromthe northeast end of the basin for CMS Oil & Gas and Pennaco.

With two more months of breathing room to work out a deal,Southern California Gas Co. has substantially modified its originalrestructuring proposal for the resumption of settlementnegotiations this week in Los Angeles. With SoCalGas leading theway, representatives of 75 interested parties are attempting tohammer out a consensus on how further unbundling is shaped forCalifornia’s natural gas industry.

Fourteen consecutive months of declining drilling rigutilization came to an end in July, according to Global Marine’smost recent SCORE report, or Summary of Current Offshore RigEconomics. And the Gulf of Mexico appears to be leading theturnaround.

Fourteen consecutive months of declining drilling rigutilization came to an end in July, according to Global Marine’smost recent SCORE report, or Summary of Current Offshore RigEconomics. And the Gulf of Mexico appears to be leading theturnaround.

In less than two months, BP Amoco Canada succeeded in unloadingall of its crude oil producing properties in Canada in an effort tolower costs and focus on natural gas, gas liquids andpetrochemicals. The company said last week it signed agreements tosell its heavy oil operations to Canadian Natural Resources andPenn West Petroleum for C$1.6 billion.

In less than two months, BP Amoco Canada has succeeded inunloading all of its crude oil producing properties in Canada in aneffort to lower costs and focus on natural gas, gas liquids andpetrochemicals. The company sold the high-cost heavy oil operationsto Canadian Natural Resources and Penn West Petroleum for C$1.6billion. The assets include five major fields, which currentlyproduce a total of 54,300 b/d of oil and liquids and 75 MMcf/d ofgas. About 250 employees will be affected by the sale, but many areexpected to sign on with the two buyers, said Dan Kane, spokesmanfor BP Amoco Canada.

New to the scene as of three months ago, privately held CanadianMidstream Services Ltd. (CMSL) made its first acquisition when itacquired a significant interest in sour natural gas processingfacilities in west central Alberta from Poco Petroleum. Formed inCalgary by four former executives of Pan East Petroleum, which wasbought by Poco in December, CMSL aims to capitalize on assetacquisition opportunities.

Enron Energy Services (EES) inked its second major energymanagement outsourcing contract in the last three months Tuesday,as Suiza Food Corp., a Dallas-based manufacturer and distributor ofdairy products, agreed to receive comprehensive energy managementservices at more than 50 manufacturing facilities in 24 states.Although no amounts were disclosed, Enron did say the ten-year dealis its biggest outsourcing contract.