The U.S. Supreme Court has rejected an appeal by former BP plc executive David Rainey, who contested whether he may be charged with obstruction of Congress for downplaying the severity of the Macondo well blowout in 2010. The U.S. Court of Appeals for the Fifth Circuit in June reversed a ruling concerning allegations that Rainey failed to disclose information that the spill estimates may have been higher than disclosed (see Daily GPI,June 30, 2014,May 22, 2013). A district court judge in 2013 had ruled in his favor (United States of America v. David Rainey, U.S. District Court, Eastern District of Louisiana, No. 12-29). Rainey’s legal argument on appeal was that the federal government had missed the deadline to file an appeal after an obstruction charge against him was dismissed. Rainey also was charged with making false statements to law enforcement agents, not at issue before the Supreme Court appeal. He has pleaded not guilty.
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Industry Briefs
Dallas-based Navigator Energy Services LLC is expanding the capacity of its Big Spring Gateway (BSG) Pipeline System from 85,000 b/d of crude oil to 140,000 b/d to serve the Permian Basin. Construction has begun and the system is expected to be placed into service in the second half of 2015 to serve new origin points in western Midland County, southern Glasscock County and western Martin County in Texas, in addition to points already planned in Glasscock, Martin and Howard counties. Navigator also said it would launch a supplemental binding open season for additional transportation commitments starting Monday (Feb. 2). The system is to include more than 250 miles of gathering pipeline, 200 miles of transportation mainline, seven truck injection stations and 225,000 bbl of planned storage capacity, and it would offer delivery into the BridgeTex Pipeline and Sunoco-operated pipelines near Colorado City, TX. The system would provide West Texas producers a direct path to 900,000 b/d of takeaway capacity from Colorado City to Texas Gulf Coast and Midcontinent markets. Contact Matt Vining at (214) 880-6001, or mvining@nesmidstream.com.
Smaller-Than-Expected 216 Bcf Storage Draw Creates Downward NatGas Price Pressure
Thursday morning’s natural gas storage report revealing a whopping 216 Bcf was removed from underground inventories for the week ending Jan. 16 hit natural gas markets with a thud instead of a bang, because while the withdrawal was significantly higher than any historical comparison, it fell short of industry expectations.
Industry Briefs
The Federal Energy Regulatory Commission was forced to briefly recess its business meeting in Washington, DC, Thursday morning after protesters repeatedly interrupted Chairman Cheryl LaFleur. The protesters addressed multiple topics, including federal government subsidies for fossil fuels, climate change and FERC’s role in pipeline permitting. After a five-minute break to clear the room, commissioners restarted the meeting without incident. “This is relatively new territory for FERC, and I think we’re a bit learning on the job how to handle situations like that,” LaFleur said.
People
Stephen Riney has been tapped by Apache Corp. as executive vice president and CFO effective in February. He most recently served as CFO for BP plc’s exploration production business, where he oversaw all accounting, business development, planning and commercial operations for the upstream segment. He previously had spent nine years with Amoco, which merged with BP in 1998. Riney holds an undergraduate degree from the University of Notre Dame and a master’s degree from the University of Chicago. John J. Christmann IV, formerly COO of North America operations, has assumed the role of president and CEO following the retirement of G. Steven Farris, 66, who had been CEO since 2002 and chairman since 2009 (see Daily GPI,Jan. 20).
Industry Brief
Comstock Resources Inc. said 2014 proved oil and natural gas reserves increased year/year to 620.4 Bcfe from 585 Bcfe, which included 495 Bcf and 20.9 million bbl, 68% proved developed. The present value of the reserves, using a 10% discount or PV-10, was $1.1 billion, using average 2014 prices of $3.96/Mcf and $92.55/bbl. The Frisco, TX-based independent’s output in 2014 averaged 180 MMcfe/d. Oil production comprised 39% of total output, versus 20% in 2013. Oil production rose 86% year/year to 4.3 million bbl; gas output fell 29% to 39.8 Bcfe. The Eagle Ford Shale contributed 5.1 million bbl and 5 Bcf, or 5.9 million boe to reserves. The Haynesville Shale and other regions added 74 Bcf in 2014. Finding costs for 2014 were estimated at $28.75/boe. Comstock has restarted Haynesville development in response to low oil prices (see Shale Daily,Dec. 18, 2014).
Cash, Futures Slump on Milder Temps, 216 Bcf Natural Gas Storage Draw
Aided by a smaller than expected inventory withdrawal report and moderating temperatures in much of the East, natural gas prices — both physical and futures — dropped significantly on Thursday.
EIA Expands Geologic View of Eagle Ford Shale
It is generally true that the deeper one drills in the Eagle Ford Shale, the more natural gas one is likely to find. Updates to Energy Information Administration (EIA) geologic maps spell out the subtleties.
Kinder Buying Harold Hamm’s Bakken Pipes in $3B Deal
Kinder Morgan Inc. (KMI) agreed to pay about $3 billion, including about $1 billion of assumed debt, for Hiland Partners, which has crude oil gathering and transportation pipelines, and natural gas gathering and processing systems, primarily serving the Bakken Shale in North Dakota and Montana.
Expected ‘Epic’ NatGas Storage Draw Fails to Secure $3-Plus February Close
Switching roles from Tuesday’s trade when Northeastern physical natural gas prices climbed while the rest of the country sank, much of the nation’s pricing points Wednesday for Thursday delivery saw small upticks, while prices in the East and Northeast declined — all while a winter storm moved up the eastern seaboard.
