Offer

The long-awaited energy legislation introduced by Senate Democrats last Wednesday offers a huge financial carrot to the company or group of companies that is first in line to build a long-line natural gas pipeline to deliver more than 30 Tcf from Alaska’s North Slope to the continental United States.

Mexico’s national oil company, Petroleos Mexicanos SA (Pemex), next year plans to offer more multiple service contracts, similar to one it did this year with a U.S. and Canadian company, to encourage more exploration and production in the country, Pemex Director General Raul Munoz Leos told analysts in New York City on Thursday. Munoz said that even though the Mexican constitution limits foreign investment in the country’s energy industry, he is confident that contracts could be written to improve investments by service companies and integrated energy companies.

Key features of the House omnibus energy bill that would offer producers royalty relief and expand leasing opportunities would cost the federal government as much as $462 million over the next decade.

Calgary-based Samson Canada Ltd. and Courage Energy Inc. jointly announced that Samson’s previous offer to acquire all of the issued and outstanding Courage shares, at C$5.20 per common share, ended last Thursday, with Samson acquiring about 95% of the shares. In the next few days, Samson said it would acquire the remaining shares of Courage to merge the two companies. Samson Canada is a subsidiary of Samson Investment Co., a privately held Tulsa-based oil and gas company, with a current production of 13,000 boe/d. The Courage acquisition will bring production to 17,000 boe/d. Core areas are Rainbow, Central Alberta and northeast British Columbia.

Importing liquefied natural gas is “one part of the solution” to help supply an expected natural gas shortfall of 8 Bcf/d by 2010, according to Houston researcher Industrial Information Resources Inc. (IIR). It noted that by the end of the decade, U.S. consumption will reach 30 Bcf/d, and LNG imports will play an “increasingly important role” to power new natural gas-fired plants now under construction.

Conoco Inc. completed its C$12.40 cash tender offer by its Canadian subsidiary Conoco Northern Inc. to purchase all of the outstanding ordinary shares of Gulf Canada Resources Ltd. on July 13. The purchase was first announced in May (see Daily GPI, May 30). Conoco has accepted nearly 524 million tendered ordinary shares of Gulf Canada, which represents about 96% of its shares. The transaction is accretive to Conoco’s earnings per share and to cash flow, and combined with reduced capital spending, it said that synergies between the two companies will enable it to quickly reduce a “significant” portion of the acquisition-related debt. Gulf Canada has extensive assets in Canada, as well as Indonesia and Southeast Asia. The deal gives Conoco a 50% boost in its North American natural gas production and proved natural gas reserves to 1.4 Bcf/d and 4.1 Tcf net, respectively. North American liquids production (crude oil, syncrude and natural gas liquids) will more than double, and proved North American liquids reserves (including syncrude) will more than triple.

A House Resources Committee bill was introduced Tuesday that would offer producers additional incentives to squeeze out every last drop of oil and natural gas from the maturer regions of the Gulf of Mexico. It would keep intact the moratoria that currently exists for the other Outer Continental Shelf regions in the United States, but it would open up the Arctic National Wildlife Refuge (ANWR) to drilling.

While some may argue that California’s energy woes offer a prime reason for placing the electric competition genie firmly back in its bottle, a recent case study by a global consulting group asserts that California’s energy difficulties mask the fact that other power markets in the United States are not only surviving, but thriving, with the PJM market serving as the perfect example.

While some may argue that California’s energy woes offer a prime reason for placing the electric competition genie firmly back in its bottle, a recent case study by a global consulting group asserts that California’s energy difficulties mask the fact that other power markets in the United States are not only surviving, but thriving, with the PJM market serving as the perfect example.