Resources

In October AGL Resources will become the first gas utility in the U.S. to completely exit the gas merchant function, but its transformation is far from over, AGL CEO Walter Higgins said last week. Higgins expects his company to be snatched up like the first pie out of the oven, probably by some hungry electric firm eager to get its hands on a utility that has emerged from deregulation relatively well done.

In October AGL Resources will become the first gas utility inthe U.S. to completely exit the gas merchant function, but itstransformation is far from over, AGL CEO Walter Higgins saidyesterday. Higgins expects his company to be snatched up like thefirst pie out of the oven, probably by some hungry electric firmeager to get its hands on a utility that has emerged fromderegulation relatively well done.

Midcoast Energy Resources said Midcoast del Bajio has beenawarded a permit by the Mexican Energy Regulatory Commission tobuild a 59-mile, 16-inch diameter gas pipeline in the Bajio regionin the state of Guanajuato in central Mexico. The line will runfrom an interconnection with a Pemex near Valtierrilla to Leon andwill provide gas transportation services to parts of central Mexicothat currently do not have access to gas. Midcoast del Bajio willhold an open season from July 16 to July 26 for firm transportationcapacity on the proposed pipeline. And a series of informationalmeetings will be held jointly with Pemex to answer questions frompotential transportation customers and other interested parties.The meetings will be held on June 24 in Irapuato, Guanajuato at theHotel Parador del Rio and on June 25 in Leon, Guanajuato at theFiesta Americana Hotel.

Pioneer Natural Resources Co. of Dallas agreed to sell oil andgas properties in Texas and Canada for about $105 million, whichwill be used to retire Pioneer bank debt.

U.S. Senate Energy and Natural Resources Committee ChairmanFrank Murkowski (R-AK) is planning to take a closer look at thepotential impact on his home state and on the West Coast of theproposed merger of BP Amoco and Atlantic Richfield Co. Thecommittee has scheduled a hearing on June 24 at 9 a.m. to reviewthe merger. BP Amoco-Arco would hold 75% of the Alaska North Slopeoil fields and a similar share of the Trans-Alaska Pipeline System.It also would have control over 90% of the crude oil delivered tothe West Coast. Its property holdings in Alaska would far exceedthe maximum allowed by state law, although the companies said theyplan to divest some of their leases. The merger would create thelargest oil producer in the U.S. and the world’s second-largestpublicly traded oil firm, with a market capitalization of about$200 billion.

CTG Resources Inc., parent of Connecticut Natural Gas, announcedit has retained Paine Webber Inc. to advise it on strategicalternatives to maximize shareholder value, including the potentialsale of the company and acquisitions of nonregulated enterprises toexpand the company’s district heating and cooling activities.

Nevada Energy Inc. signed an offer to purchase from ConsolidatedBeacon Resources Ltd. two separate onshore exploration agreementscovering a combined total area of about 82,000 net hectaresnorthwest of Truro, Nova Scotia. Nevada will have a 75% workinginterest in 27,970 gross hectares and a 100% working interest in60,936 gross hectares and will be the operator. The agreementsrequire the operator to expend capital to fulfil the earningrequirements under the terms of the work programs as required bythe Nova Scotia Petroleum Directorate. Significant offshore gastests have been documented in the 5 MMcf/d range with establishedoil and gas production of 4 MMBoe realized at the onshore StoneyCreek Field within the same depositional basin about 78 milesnorthwest of the lands.

CTG Resources Inc., parent of Connecticut Natural Gas, announcedit has retained Paine Webber Inc. to advise it on strategicalternatives to maximize shareholder value, including the potentialsale of the company and acquisitions of nonregulated enterprises toexpand the company’s district heating and cooling activities.

Pioneer Natural Resources, a Dallas-based independent producer,announced an agreement last week to sell $245 million in oil andgas properties to Prize Energy Co., a Tulsa, OK-based producer.Last month, Pioneer had planned to sell most of these same assetsto Costilla Energy, but Costilla was unable to close the deal (seerelated story this issue). The Prize acquisition is expected toclose June 29 with an effective date of July 1.