Rockies

Cabot Oil & Gas Corp. said it “high graded” its portfoliolast week with the announced sale of Appalachia properties toEnervest Management Co. for $46.2 million, and the subsequentpurchase of proved reserves in the Wyoming Green River Basin worth10.3 Bcfe. Cabot said proceeds from the sale were used both to helpfund the Wyoming acquisition and to repay debt. So far this yearCabot has sold 73.9 Bcfe of non-strategic reserves for $60 millionacross all regions.

Cabot Oil & Gas Corp. said it “high graded” its portfolioyesterday with the announced sale of Appalachia properties toEnervest Management Co. for $46.2 million, and the subsequentpurchase of proved reserves in the Wyoming Green River Basin worth10.3 Bcfe. Cabot said proceeds from the sale were used both to helpfund the Wyoming acquisition and to repay debt. So far this yearCabot has sold 73.9 Bcfe of non-strategic reserves for $60 millionacross all regions.

Unocal Corp.’s Spirit Energy 76 unit completed the previously announced trade of most of its Rocky Mountain oil and gas assets to Tom Brown Inc (See NGI March 15, 1999). Unocal received 5.8 million shares of Tom Brown common stock (about 16.5%) and $5 million for the properties. The deal is worth about $76 million. Subject to certain restrictions and conditions, Unocal has the option to increase its stock ownership up to 19.5% through open market purchases. The sale agreement also entitles Unocal to nominate one director to the Tom Brown board.

Unocal Corp.’s Spirit Energy 76 unit completed the previouslyannounced trade of most of its Rocky Mountain oil and gas assets toTom Brown Inc (See Daily GPI March 11,1999). Unocal received 5.8 million shares of Tom Brown commonstock (about 16.5%) and $5 million for the properties. The deal isworth about $76 million. Subject to certain restrictions andconditions, Unocal has the option to increase its stock ownership upto 19.5% through open market purchases. The sale agreement alsoentitles Unocal to nominate one director to the Tom Brown board.

Much of Monday’s swing market closely resembled that of Friday:flat to down 3-4 cents. But some points were conspicuous withsubstantially larger decreases. Since CIG and Public Service ofColorado ended price-boosting OFOs over the weekend, prices onCIG-North System and Questar fell by a little over a nickel. Thesteepest plunge by far of almost 20 cents came at CIG-DJ(Denver-Julesburg) Basin, which had soared by a similar amountlast Wednesday after PSCo declared a Restricted Delivery Daysituation.

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 wasabout $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.

The Powder River Basin in Wyoming is expected to become thehottest new gas supply point in the Rocky Mountain region over thenext few years, and multiple pipeline companies are fighting toothand nail to deliver the burgeoning supplies. The basin is expectedto show huge production growth in a relatively short period oftime, leading some observers to compare it with the San Juan Basin,where the benefit of tax credits on coal-seam gas triggered rapiddevelopment. But Powder River producers, such as Barrett Resourcesand Western Gas Resources, are doing the job without federal help.New E&P technologies and finding techniques have enabledproducers to find the reserve sweet spots faster than ever before.

Williams announced its Mid-America Pipeline subsidiary willexpand its natural gas liquids (NGL) pipeline system in the RockyMountains from 75,000 b/d to 125,000 b/d. The expansion involvesthe construction of a 412-mile pipeline that extends from DaggettCounty in northeast Utah to near Bloomfield, NM. The new line runsparallel to the existing Mid-America system. Construction isscheduled to begin in August, with an initial in service date ofJan. 1, 1999.

Prices for the last day of February were mostly softer Friday,but quotes for the Southwest basins, Rockies and intra-Albertareflected flatness. And Canadian exports into Northwest at Sumas,which had been languishing in the low to mid $1.10s at the start ofthe week, climbed to the $1.30 area. The big exception to Westernfirmness was a fall of about a dime at the Southern Californiaborder in wide-ranging numbers.