Package

The energy portion of the nearly $888 billion Senate economic stimulus package, like its House counterpart, focuses almost exclusively on tax credits and direct investments for renewable fuels and electric transmission facilities, but one tax credit has been carved out for traditional oil and natural gas producers. Producers would be eligible for a $10/ton tax credit if they can prove that the carbon dioxide (CO2) injected to enhance oil and gas recovery has been permanently sequestered in a field.

Toronto-based Universal Energy Group (UEG) has decided on a total package, acquiring troubled Commerce Energy Inc., the operating subsidiary of Commerce Energy Group (CEG), for approximately US$26 million, UEG said. The deal replaces a partial acquisition the companies had originally negotiated, and ends the uncertainty that had been swirling just days before (see Daily GPI, Dec. 11).

California Attorney General Edmund G. Brown last Friday wrote congressional leaders urging that the auto industry bailout package now being hammered out include language that would authorize states to implement California’s greenhouse gas (GHG) emissions standards for motor vehicles. Brown has been battling the U.S. Environmental Protection Agency (EPA) on the issue for the past two years.

In a significant shift in policy, the House Democratic leadership Wednesday unveiled an energy package that would lift the 27-year-old congressional moratorium on oil and natural gas drilling 100 miles out from shore and would allow individual coastal states to “opt in” to leasing between 50 and 100 miles from their shorelines.

Forest Oil Corp. has agreed to pay $892 million in cash and stock to privately held Cordillera Texas LP for a package of natural gas-weighted properties in Oklahoma, East Texas and North Louisiana that now produce around 34 MMcfe/d. Total reserves are estimated at 350 Bcfe, which are 36% proved developed.

House Democrats plan to take up a package of energy measures next week that would put producers in the unenviable position of having to either drill on their existing leases or face the prospect of paying higher fees.

Key House Republicans, led by House Energy and Commerce Ranking Member Joe Barton of Texas, Thursday rolled out a package of 13 energy bills that are intended to boost the supply of domestic energy.

EOG Resources Inc. has retained Meagher Oil & Gas Properties Inc. to sell operated producing properties in Oklahoma’s Lincoln and Oklahoma counties. The package includes an average 99% working interest (80% net revenue interest) in 6,442 net acres in 30 sections of which 2,463 acres are producing. The assets include 19 wells within a six-mile radius producing high-Btu gas from the Pen and Cleveland sands, EOG said. Production is 954 Mcf/d , with 2.5 b/d of oil net projected for June. Estimated net cash flow for June is $270,000. A salt water disposal well and water lines are in place. Upside, said EOG, includes one additional Peru location identified and two Hunton/Oswego extensional locations. The bid due date is May 22; the effective date is June 1. Closing is expected by June 27. Contact Jacque Semple at (918) 481-5900, extension 221.

As gas production in the Piceance Basin continues to grow, Enterprise Products Partners LP partnership affiliates agreed with Chevron USA Inc. to provide a package of midstream services for Chevron’s natural gas production in the northwest Colorado basin, the companies said last week.