Vertically

With natural gas prices expected to remain volatile and high, the rush to coal-fired electric generation is back. Everything from vertically integrated utilities to merchant operators are proposing new plants, as well as hyping the prospects for “clean coal” facilities, but some old-fashioned caution is recommended in a report released Tuesday by Standard & Poor’s Ratings Services (S&P), examining whether high yield or high grade financing will build these plants.

The transmission and generation parts of vertically integrated rural electric cooperatives are enjoying strong credit ratings in the midst of the more turbulent private-sector electricity industry with its political and financial crunch. And proposed farm legislation in Congress eventually could strengthen the rural utilities’ financial positions as they enter somewhat of a generation building boom era, according to Standard & Poor’s latest analysis out of its energy finance team in New York.

Three years after Michigan Gov. John Engler called a temporary moratorium on the practice of vertically drilling from shore to reach oil and gas deposits beneath the Great Lakes, the Michigan Natural Resources Commission has given its “overwhelming support” for the Department of Natural Resources (DNR) to approve procedures to resume leasing oil and gas property there. Since the 1970s, 13 oil and gas wells had been dug in the lakes, and seven are still in operation.

Three years after Michigan Gov. John Engler called a temporary moratorium on the practice of vertically drilling from shore to reach oil and gas deposits beneath the Great Lakes, the Michigan Natural Resources Commission has given its “overwhelming support” for the Department of Natural Resources (DNR) to approve procedures to resume leasing oil and gas property there. Since the 1970s, 13 oil and gas wells had been dug in the lakes, and seven are still in operation.

Greka Energy Corp., an international vertically integrated oil and gas producer, has completed a Miocene test of its Haspel & Davis #1 well in the Potash Field in Plaquemines Parish, LA to a total depth of 10,604 feet. The well, which was directionally drilled underneath a large salt overhang in inland waters, is expected to have initial production rates of 3 MMcf/d and 350 bbl/d by early September. Greka said the well has the potential to add up to $6.5 million in annual revenue within its Americas division; the company reported $8.5 million in worldwide revenue for the first six months of 2001. More than 360 feet of productive pay zones were encountered, of which almost 160 feet is expected to be gas and 200 feet to be oil.