The federal government will begin accepting royalty-in-kind(RIK) for some Gulf of Mexico gas production beginning Dec. 1 inwhat will be the Minerals Management Service’s (MMS) third ongoingRIK pilot.
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The Department of the Interior’s Minerals Management Service(MMS) is beginning its third royalty-in-kind (RIK) pilot, puttingit in the business of selling Gulf of Mexico (GOM) gas productionit accepts in place of cash royalties. The pilot is intended totest a different approach to RIK, using a competitive auction tomove up to 260 MMBtu/d initially.
Amoco Production and Amoco Energy Trading have wasted no time inpetitioning the D.C. Circuit Court of Appeals to review FERC’srecent decision upholding Dynegy Marketing and Trade’s 1.3 Bcf/dcontract with El Paso Natural Gas.
MCN Energy followed through as planned on the previously announcedsales of its Midcontinent/Gulf Coast exploration and production(E&P) properties and subsidiaries. Undisclosed privately heldcompanies paid about $105 million for the assets, which are primarilylocated in Texas and Oklahoma. Proceeds from the sales will helpstrengthen MCN’s balance sheet by reducing its debt. At year-end 1998,these Midcontinent/Gulf Coast assets represented 144 Bcfe of reserves,or 12% of the 1.2 Tcfe of proved reserves on MCN’s books. About 80% ofthe reserves sold were gas. MCN announced earlier in August that,consistent with its new regional, operating strategy, the company willretain its natural gas producing properties in Michigan (see Daily GPIAug. 3). Negotiations continue on theremaining Appalachian E&P package.
KN Energy has discovered there is more than just cheddar cheeseproduction going on in Wisconsin these days. Potential customersfrom “all segments of the industry” showed interest in its proposedHorizon Pipeline project and have signed preliminary agreements for800 MMcf/d of firm capacity, the company said yesterday.
Range Resources Corp. and FirstEnergy Corp. last week announcedthe formation of a $1 billion exploration and production jointventure in the Appalachian Basin. Each company will own 50% of theyet-to-be-named venture. The deal is expected to close within 60days.
Attempting to gain access to a potentially plentiful Gulf ofMexico gas supply, KeySpan Exploration & Production announcedTuesday it agreed with Houston Exploration Co.to jointly drilland develop 55 leases in the Gulf’s outer continental shelf. The$300 million agreement has an effective date of Jan. 1, 1999.
Attempting to gain access to a potentially plentiful Gulf ofMexico gas supply, KeySpan Exploration & Production announcedTuesday it agreed with Houston Exploration Co. to jointly drill anddevelop 55 leases in the Gulf’s outer continental shelf. The $300million agreement has an effective date of Jan. 1, 1999.
Spirit Energy 76, Unocal Corp.’s U.S. Lower 48 exploration andproduction unit, signed a letter of intent to trade most of itsRocky Mountain oil and gas assets for 5.8 million shares of TomBrown Inc. and $5 million in cash. The total value of the deal isabout $76 million. Unocal will hold 16.52% of the outstandingcommon stock of Tom Brown based on the number of shares to beissued. The agreement also gives Unocal a seat on Tom Brown’s boardand the option to increase its ownership up to 19.5% through openmarket purchases.