Plains

With substantive heating load retreating largely to the sparsely populated Upper Plains of the U.S. and western half of Canada, and only a modest amount of power generation demand for air conditioning having built up in the southern U.S. to replace it, most points fell Monday.

Forecasts of sub-freezing lows Thursday from the Northeast southward into the Southeast and westward through the Midwest/Midcontinent into the Plains and Rockies resulted in more market strength Wednesday than a day earlier. However, it offered another demonstration of the fact that widespread heating load does not necessarily translate into much higher gas prices.

In spite of forecasts of frigid New Year’s Eve weather from the Northeast through the Midwest and into the Upper Plains, with even the South due to experience some sub-freezing lows, prices dropped at a large majority of points Tuesday. The overall softness even defied significant prior-day screen support from Monday’s 31-cent spike by expiring January futures.

Houston-based Plains Exploration & Production Co. (PXP) has completed the sale of its remaining interests in some properties located in the Permian and Piceance basins to Occidental Petroleum Corp. (Oxy) and to some undisclosed companies with contractual preferential purchase rights for a total of $1.25 billion in cash. Oxy in September agreed to acquire the stakes (see Daily GPI, Sept. 26). In late 2007 Oxy paid PXP a total of $1.55 billion for a 50% stake in PXP’s Permian and Piceance leaseholds (see Daily GPI, Dec. 18, 2007). The Permian and Piceance basin assets have net production of around 52 MMcf/d of gas and 4,300 b/d of liquids, or 13,000 boe/d. The properties also have about 92 million boe of proved reserves, 45% developed and 69% weighted to gas. PXP is expected to use the proceeds to develop a joint venture with Chesapeake Energy Corp. in the Haynesville Shale (see Daily GPI, July 2).

Occidental Petroleum Corp. (Oxy) has agreed to acquire the interest it didn’t already own in some Permian and Piceance basin fields from Plains Exploration and Production Co. (PXP) for $1.29 billion. The transaction frees up cash that would allow PXP to develop its joint venture with Chesapeake Energy Corp. in the Haynesville Shale (see NGI, July 7). The Oxy agreement, which is expected to close by the end of the year, follows transactions announced late last year in which Oxy paid PXP $1.55 billion for half stakes in the West Texas and Colorado plays (see NGI, Dec. 24, 2007). The Permian and Piceance assets currently have net production of around 52 MMcf/d of gas and 4,300 bbl of liquids, or 13,000 boe/d. The properties have about 92 million boe of proved reserves weighted 69% to gas. About 45% of the properties are developed. In the first six months of 2008 Oxy produced more than 50 MMcf/d in the Piceance Basin. The Los Angeles-based producer said that with the PXP purchase, gas output would grow to at least 200 MMcf/d by 2010. Oxy’s net acreage position in the Piceance Basin now totals 129,000 acres.

Occidental Petroleum Corp. (Oxy) agreed to acquire the interest it didn’t already own in some Permian and Piceance basin fields from Plains Exploration and Production Co. (PXP) for $1.29 billion. The transaction frees up cash that would allow PXP to develop its joint venture with Chesapeake Energy Corp. in the Haynesville Shale.

NorthWestern Energy Corp. intends to focus on its regulated utility assets and on building more power and natural gas transmission infrastructure in its Great Plains region, said CEO Michael Hanson during an earnings conference call last week.

NorthWestern Energy Corp. intends to focus on its regulated utility assets and building more power and natural gas transmission infrastructure in its Great Plains region, said CEO Michael Hanson during a recent second quarter earnings conference call.

July and August will see warmer-than-normal temperatures dominating the western United States, especially the northern Rockies and northern Plains, and the 2008 hurricane season still looks to be an active one, according to forecaster WSI Corp. of Andover, MA. The season’s second named storm, Tropical Storm Bertha, developed in the eastern Atlantic late last week and was not expected to approach North America until at least early in the week — if at all.