Reserves

EnerSea Transport LLC, setting a course to bring offshore stranded reserves to North America by 2006 via a compressed natural gas (CNG) system, has added Kawasaki Kisen Kaisha Ltd. (K Line) to its maritime team, which will own and operate the future marine vessels. K Line’s alliance is part of EnerSea’s plan to deploy its Volume Optimized Transport and Storage system, otherwise known as VOTRANS.

Marathon Oil Co. and Unocal Corp. reported a significant natural gas discovery of about 90 Bcf of gross proven recoverable gas reserves on the Ninilchik Prospect on the Kenai Peninsula, approximately 35 miles south of Kenai, AK. Marathon is operator of the well and the 25,000-acre prospect with a 60% working interest, while Unocal Alaska holds the remaining 40%.

Marathon Oil Co. and Unocal Corp. reported a significant natural gas discovery of about 90 Bcf of gross proven recoverable gas reserves on the Ninilchik Prospect on the Kenai Peninsula, approximately 35 miles south of Kenai, AK. Marathon is operator of the well and the 25,000-acre prospect with a 60% working interest, while Unocal Alaska holds the remaining 40%.

Spinnaker Exploration Co. said that as of June 30, the company has estimated net proved reserves were 307.2 Bcfe, an increase of 150% over estimates made as of June 30, 2000 and an increase of 68% over estimates made as of Dec. 31, 2000. The company said its proved reserve replacement ratio during the first half of 2001 was 579%. Production in the first half of 2001 was 26 Bcfe. Activities in the first half of 2001 were once again exclusively related to exploration operations. The company’s estimated net proved reserve additions during the first half of 2001 totaled 150.5 Bcfe and represented 82% of year-end 2000 reserve totals of 182.7 Bcfe. Proved reserve estimates include 56% natural gas and 44% oil.

Though additional wells need to be drilled before the total proved reserves are accurately measured, Murphy Oil Co. announced Thursday that its Front Runner South prospect in Green Canyon Block 339 offshore Louisiana has exceeded expectations. The reserve estimate is expected to be more than the pre-drill projection of 40-60 MMboe.

Working to set aside enough reserves to cover potential lossesfrom power trading in California, Houston-based Reliant Energy Inc.reported fourth quarter results Friday that fell short of WallStreet expectations. The utility posted a loss of $298.6 million,or $1.04 a diluted share. In fourth quarter 1999, it also lost,posting earnings of $72.7 million or 26 cents a share.

The good news is the lights are still on in California. But WallStreet will be watching closely this week as California legislatorson one coast and the Clinton Administration on the other attempt tostop the train wreck in the California power market and rescue thetraditional “widow and orphans” investments in PG&E Corp. andEdison International from the junk pile.

California energy officials declared another power alert Mondayas statewide electricity reserves threatened to dip below 7% in theface of near-record cold weather power demand and more than 11,000MW out of service, about 4,000 MW of which were on an unplannedbasis. Part of the unplanned loss of generation capacity wasattributed to a transmission breakdown in the San Joaquin Valley onpart of Pacific Gas and Electric Co.’s system.

It’s not a perfect world yet, but sponsors of the major projectsto tap reserves in the far north are working to avoid mistakes ofthe past by coming up with a joint plan to pipe supplies fromAlaska and the Northwest Territories to market areas in the south.