Properties

Enterprise Products Partners LP announced Monday it added more El Paso Corp. properties to its portfolio with the purchase of two East Texas natural gas subsidiaries. Enterprise paid $74.5 million for the natural gas gathering system and natural gas cryogenic processing plant, and the acquisition is expected to be immediately accretive to cash flow in 2005.

Two subsidiaries of Tulsa-based SemGroup L.P. collected new properties last week. SemCanada, L.P. announced Thursday it signed a definitive purchase and sale agreement to buy Central Alberta Midstream (CAMS), the largest licensed sour gas processor in Alberta, from BP Canada Energy and Chevron Canada Resources (CCR). Earlier SemGas L.P. said it acquired a second natural gas storage project in New York State.

Houston-based producer Contango Oil & Gas Co. said Wednesday that it has completed the sale of substantially all of its South Texas natural gas and oil interests to Edge Petroleum Corp. for $50 million.

Two years after it slashed its dividend and began selling off major properties worldwide, Dallas-based TXU Corp. last week hiked its dividend by 350%, raised its earnings forecast for the next two years and increased its share buyback program.

Energen Resources Corp. closed its previously announced purchase of San Juan Basin coalbed methane properties from a private company for an adjusted purchase price of $263 million. Located in the under-pressured Fruitland coal play, more than half of the estimated 240 Bcfe of proved gas and gas liquids (NGL) reserves are behind pipe and undeveloped, the company said. Gas accounts for 80% of the estimated proved reserves, with NGL making up the balance. The company also estimates that there are up to 60 Bcfe of probable reserves. A large development inventory from the acquisition is estimated at more than 110 infill wells. Future development costs are expected to be $50 million.

Oneok said it completed a $240 million purchase of East Texas gas and oil properties and related gathering systems from Wagner & Brown Ltd. of Midland, TX. The deal gives Oneok an additional 177 Bcfe of proved reserves with a reserves-to-production index of 12.4 years. The transaction was financed through short-term borrowings. Over the long term, Oneok will finance this transaction with available cash, the issuance of equity or a combination of both. “This transaction not only expands the Oneok footprint, but it reinforces the Oneok strategy of owning and controlling reserves,” said Oneok Chairman David Kyle.

The Minerals Management Service (MMS) on Thursday issued guidance to clarify how to prepare exploration plans for federal offshore oil and gas properties in the Gulf of Mexico (GOM).

Fortuna Energy Inc. has drilled two successful Black River gas wells in the Appalachia, the first two operated wells of its recently acquired New York properties. The Talisman Energy Inc. subsidiary said the first well, Fortuna Ganung Hz, tested a non-producing structure in Schuyler County. Despite some operational problems, the well still tested at rates up to 2.4 MMcf/d, and plans are under way to tie the well into a local gathering system. The second well, Fortuna Konstantinedes Hz, was drilled in Chemung County. After completion, the well flowed at rates up to 10.4 MMcf/d and is currently shut-in for a pressure buildup test. Work is under way to have the well tied into the Columbia high-pressure transmission system by the end of the year. The third well, Hepfner, is currently drilling. Two additional rigs also are being mobilized, and a fourth well is expected to spud in September and another in mid-October. Additional projects under way include the installation of three compressors, all expected to be on stream by year’s end and the tie-in of the Fortuna Pace well, which should be on stream in early 2004 at a rate of 5 MMcf/d. Fortuna’s production in July was 67 MMcf/d, and it plans to spend US$46 million in the area in 2003, drilling eight wells.

Acclaim Energy Trust closed its previously announced acquisition of Alberta natural gas properties for $68.4 million. The current production from the new assets is 3,000 boe/d, 75% weighted to natural gas, and includes 13.5 MMcf/d of natural gas and 750 b/d of light oil and natural gas liquids (NGLs). Eighty percent of the production is located in Acclaim’s core operating areas, with a particularly strong fit in west central Alberta and the Peace River Arch. The acquisition was financed through a bought deal financing completed on July 22, 2003 with a syndicate of underwriters which resulted in the issuance of 6.6 million units for gross proceeds of $72.1 million. Acclaim Energy Trust is a Canadian income trust that produces 26,000 boe/d, 55% of which is natural gas.