Test

The Bureau of Land Management (BLM) is borrowing a page from eBay to test an online platform that could replace the traditional oral auctions for oil and natural gas lease sales.

The Bureau of Land Management (BLM) is borrowing a page from eBay to test an online platform that could replace the traditional oral auctions for oil and natural gas lease sales.

Given the U.S. government’s stress test assessment that Bank of America (BofA) needs a multi-billion-dollar capital infusion, Standard & Poor’s Ratings Services (S&P) on Wednesday adopted a “negative” credit watch for some of the high-profile public-sector utility long-term natural gas purchases. The gas prepayment deals have been under credit rating downward pressures for the past year (see Daily GPI, Sept. 17, 2008).

Apache Corp. said the Ewing Banks 998 No.1 discovery well in the deepwater Gulf of Mexico test flowed at 5.4 MMcf/d of natural gas and 4,254 b/d of oil. The well is to be connected to existing facilities using a subsea tieback with first production expected in early 2010. Apache owns a half stake in the discovery, which is located about 150 miles southwest of New Orleans in water about 1,000 feet deep. Walter Oil & Gas Corp. is the operator of the well and owns the remaining 50% stake. The well was drilled to a measured depth of 14,538 feet and tested on an interval between 14,352 feet and 14,400 feet. Apache has completed eight wells at Ewing Banks 826 and increased production to a current rate of 12.9 MMcf/d and 5,300 b/d from a 2007 rate of 700 boe/d. Apache owns a 100% working interest in the Ewing Banks block.

A Sempra Energy unit, Sempra Pipelines & Storage, on Wednesday launched an open season to test the market interest for up to 1 Bcf of firm natural gas capacity at its Bay Gas storage project near McIntosh, AL. Responses are due by March 26, and service is to start April 1, Sempra said. It is seeking nonbinding bids for three years or longer.

Monday’s test of psychological support at $6, a nip in the air and a strong rebound in equities combined to push November natural gas futures higher on Tuesday. The contract, which expires Wednesday, put in a high of $6.302 before settling Tuesday’s regular session at $6.186, up 6.5 cents from Monday’s close.

Vector Pipeline LP and Vector Pipeline LP will test shipper interest in a third expansion of their system that extends from Chicago to Dawn, Ontario, in a binding open season in September, they said Thursday.

Natural gas futures continued to test lower price levels Wednesday as the August contract recorded a low of $11.113 before rebounding to close at $11.398, still good for a 7.9-cent drop from Tuesday’s close. The market appeared to be quite comfortable with following spiraling crude values lower.

Williams and Puget Sound Energy (PSE), the utility subsidiary of Puget Energy, announced an open season last Thursday to test shipper interest in the proposed Blue Bridge Pipeline, which would provide Pacific Northwest markets with increased access to Rocky Mountain and Canadian natural gas supplies at Stanfield, OR. The open season will run through May 30.