Onshore

Assuming U.S. natural gas prices average above $8/Mcf in 2007, every drilling rig that can work will work both onshore and offshore, Raymond James energy analysts said in a report issued Monday.

Marginal wells may not receive the attention of the big oil and gas discoveries, but they are critical to the U.S. energy supply, providing 17% of the domestic oil and 9% of the natural gas produced onshore, according to a report by the Interstate Oil and Gas Compact Commission (IOGCC). Without marginal wells, the IOGCC estimated the United States would have to increase imports by nearly 7%.

Marginal wells may not receive the attention of the big oil and gas discoveries, but they are critical to the U.S. energy supply, providing 17% of the domestic oil and 9% of the natural gas produced onshore, according to a report by the Interstate Oil and Gas Compact Commission (IOGCC). Without marginal wells, the IOGCC estimated the United States would have to increase imports by nearly 7%.

Houston-based independent Swift Energy Co., whose core operations are focused onshore Louisiana and Texas, said Monday it will purchase the interests in five oil and gas properties in South Louisiana from BP America Production Co. for $175 million. Production is about 75% natural gas, with proved reserves estimated at 58.2 Bcfe and probable reserves estimated at 28.1 Bcfe.

Anyone who doubts the growing importance of onshore unconventional natural gas basins should take a look at second quarter results from EOG Resources Inc. and Southwestern Energy Co. Both companies credit prolific shale production — EOG’s in the Barnett and Southwestern’s in the Fayetteville — for strong results last quarter.

FERC on Thursday issued a certificate clearing the way for Freeport-McMoRan Energy LLC to build a 5.1-mile, 36-inch diameter onshore pipeline in Alabama that would interconnect with a much longer offshore pipeline extending from a proposed offshore Louisiana liquefied natural gas (LNG) terminal and gas storage project.

House Democrats on Tuesday introduced legislation that would, at current prices, put an end to much of the royalty relief for oil and natural gas production on federal onshore and offshore lands. Industry urged lawmakers to look at the “full picture,” saying the federal government would lose much more than it would gain by eliminating royalty relief.

With a promotional launch to its ambitious liquefied natural gas (LNG) plans for California now complete, Australian-connected Woodside Natural Gas Inc. is focusing on finalizing its proposed onshore receipt site for regasified LNG shipments along the Southern California coast. Woodside will make public its final site decision next month, a Los Angeles-based spokesperson said Tuesday.

Citing the new federal Energy Policy Act of 2005, parts of which give FERC exclusive siting authority for onshore liquefied natural gas (LNG) terminals, the California Public Utilities Commission dropped its investigation of the Sound Energy Solutions (SES) proposed LNG terminal in Long Beach harbor in a closed session following its business meeting earlier this month (Nov. 18). The state regulators had started the proceeding to examine safety and economic issues.