Ivanhoe Energy and Unocal have entered into a 50-50 joint venture to explore for oil and natural gas in East Texas will focus on the Bossier Sand prospects in more than 46,000 gross acres (37,000 net) in a three-county area. Unocal will become operator and will fund the drilling costs for several exploration wells to offset the $10 million in leasehold, seismic and processing costs incurred by Ivanhoe. Once “investment equilibrium” is reached, the companies will become equal partners. The Bossier sand trend consists of multiple fields and multiple pay zones, with typical wells producing between 2-4 MMcf/d at an average depth of 12,000 feet. Ivanhoe officials noted that Anadarko Petroleum Corp., the area’s largest operator, has drilled more than 300 Bossier wells, achieving a success rate of “virtually 100%.” Drilling is expected to begin on Ivanhoe’s and Unocal’s Lone Star and Creslenn Ranch prospects. Following a successful exploration phase, Ivanhoe intends to project-finance its share of field development costs.
Texas
Articles from Texas
Industry Briefs
Houston-based Vector Energy Corp. recently completed the testing of three wells at its Mustang Island Block 818-L off of the Texas Gulf Coast. The wells tested at a combined rate of 1.6 MMcf/d. The company reported that there are still three wells on the location that need to be tested. “I am excited that finally we have test results from these wells that substantiate the proven reserves we have always anticipated,” said Sam Skipper, CEO of Vector. “I believe the remaining wells will also be very productive. All are exhibiting wellhead shut-in pressures in excess of 4,000 pounds, which is similar to the pressures experienced on the three wells that have been tested. All that remains is for the pipeline to be pigged and then sales can commence.”
EOTT Picks Up $120M of Enron Energy Assets
In a $120 million deal with Enron Corp., EOTT Energy Partners LP has purchased a Texas-based hydrocarbon processing complex and a natural gas liquids storage facility, as well as a liquids pipeline grid system. EOTT also signed a 10-year tolling agreement for production from the hydrocarbon complex and a 10-year storage and transportation agreement to use the pipeline and storage systems with an Enron affiliate.
Hebert Rolls Out Welcome Mat for New FERC Nominees
FERC Chairman Curt Hebert Jr. said yesterday that he has alreadywelcomed the two Commission nominees – Texas regulator Pat Wood IIIand Pennsylvania regulator Nora M. Brownell – on board, and did notappear to be overly concerned that Wood might replace him down theroad.
Industry Briefs
Sources have indicated that President Bush has picked Texasregulator Pat Wood III as his final choice for chairman of theFederal Energy Regulatory Commission, short-circuiting the term ofcurrent Chairman Curt Hebert Jr. “It’s a done deal. The paperwork[for Wood’s nomination] is on the way to the Hill,” a source toldNGI. However, the White House has not formally announced its intentto nominate Wood, and the Senate Energy and Natural ResourcesCommittee still hasn’t received the nomination paperwork.
TX PUC Finalizes Price to Beat Rules
The Texas Public Utility Commission last week finalized rules,which among other things, guarantee utility customers get a 6% ratecut when retail competition begins Jan. 1, 2002. The final rulesestablish the price utility affiliates will be allowed to charge.
Accusations Fly Over CA’s Energy Crisis; Davis Calls for Probe
The main targets of California’s legal and political ire —Texas-based energy giants — are denying any wrongdoing in theface of lawsuits and a state legal probe launched last week in themidst of continuing price spirals and tight supplies for naturalgas and electricity throughout the greater western region.
Transportation Notes
All three major Gulf Coast/Northeast interstate pipes —Tennesseee, Texas Eastern (Tetco) and Transco — issued shipperwarnings Thursday about receipts into their systems laggingconsiderably behind market-area deliveries. Tennessee issued aBalancing Alert OFO, effective today until further notice, to 39shippers (applying to more than one contract in some cases). A penaltyof $15/Dth “plus the applicable regional daily spot price” toovertakes from delivery meters or underdeliveries at receipt pointsthat exceed 2% or 500 Dth, whichever is greater, of scheduledquantities. Tennessee also is reducing today its normal SupplyAggregation (SA) contract imbalance tolerance of 1,000 dekatherms to500 dekatherms across all supply area pools. The tolerance for marketarea pools remains at zero, the pipeline said. Tetco said allpreviously announced restrictions (see Daily GPI, Dec. 21) would remain in effect untilfurther notice and added two more that take effect today: all IT-1volumes, including backhauls, received or delivered in the Access Areawill not be scheduled; and no nominations for interruptible orsecondary service will be accepted at the Oakford, Leidy andLambertville points. Transco cut the 4% tolerance currently allowed atits pooling points to 1% or 1,000 Dth, whichever is greater, fornegative imbalances. Shippers with positively scheduled poolimbalances will continue to be held to the 4% tolerance level. Transcoadded that it may proactively decrease markets to bring them in linewith supplies at pooling points.
Transportation Notes
Citing forecasts of “an extended period of steady, cold weatherthroughout the pipeline system,” Texas Eastern said it is imposingseveral restrictions this morning to preserve linepack and systemreliability. Until further notice no forward-haul mainline IT-1volumes will be delivered to the market area; no due-shipperimbalances are available; TABS-1 shippers are required to be inbalance daily; and all non-interstate Operational BalancingAgreements upstream of the Berne (OH) Compressor Station have beensuspended. Affiliate Algonquin is restricting the taking of anydue-shipper imbalances. Both pipes said they will consider thepotential for secondary restrictions going into the holiday weekendas conditions warrant.
Swift Action Urged for Trunkline Conversion
Trunkline Gas, Texas Eastern Products Pipeline Co. LP (TEPPCO)and Marathon Ashland Petroleum LLC have called on FERC to actquickly on an application that seeks to convert 720 miles ofTrunkline’s mainline gas transmission system to a liquid petroleumproducts pipeline.
