Volumetric

EIA: Record Volumetric Production Hike in 2011

Due in large part to prolific shale gas development, total marketed gas production in the United States in 2011 experienced its largest year-over-year volumetric increase in history, according to the Energy Information Administration’s (EIA) Short-Term Energy Outlook for February.

March 12, 2012

EIA Saw Record Volumetric Production Hike Last Year

Due in large part to prolific shale gas development, total marketed gas production in the United States experienced its largest year-over-year volumetric increase in history in 2011, according to the Energy Information Administration’s (EIA) Short-Term Energy Outlook for February.

February 8, 2012

Chesapeake Strikes $1.15B VPP Deal in Barnett Shale

Chesapeake Energy Corp. has sold a five-year volumetric production payment (VPP) to an affiliate of Barclays Bank PLC for proceeds of $1.15 billion related to its production from the Barnett Shale of North Texas, the company said Monday.

October 5, 2010

Industry Brief

Chesapeake Energy Corp. has sold a five-year volumetric production payment (VPP) to an affiliate of Barclays Bank PLC for proceeds of $1.15 billion related to its production from the Barnett Shale of North Texas. The deal, which closed on Sept. 30, includes about 390 Bcf of proved reserves and about 280 MMcf/d net production in 2011. Chesapeake retained drilling rights on the properties below currently producing intervals and outside existing producing wellbores. Since December 2007 Chesapeake has completed eight VPP transactions and monetized approximately 1 Tcfe of proved reserves for combined proceeds of approximately $4.7 billion, or approximately $4.70/Mcfe (see Daily GPI, May 6). Earlier this year Chesapeake announced a reorganization of its natural gas operations in a plan to raise up to $5 billion to repay up to $3.5 billion of senior debt and to increase its investment in liquids-rich plays by up to $1.5 billion (see Daily GPI, May 11). Jefferies & Company Inc. was adviser to Chesapeake on the latest VPP transaction.

October 5, 2010

Chesapeake Obtains $412M VPP for Anadarko, Arkoma Leaseholds

Chesapeake Energy Corp. received $412 million for some natural gas properties in the Anadarko and Arkoma basins using yet another volumetric production payment (VPP). The Oklahoma City-based independent last month estimated it would raise $425-475 million for the assets.

January 6, 2009

Aspen Pipeline to Acquire and Transport Gas to W. Texas Power Plant

Aspen Pipeline LP affiliate Odessa Fuels Marketing LLC has signed a definitive agreement with Tulsa-based Arena Resources Inc. to purchase natural gas from Arena’s Fuhrman Mascho properties in the Yates formation in Andrews County, TX. Aspen has also signed a definitive agreement with PSEG Texas LP subsidiary Odessa-Ector Power Partners LP to deliver Yates formation gas in a dedicated pipeline to the PSEG Texas 1,000 MW energy generation facility just outside Odessa, TX.

February 28, 2008

Industry Briefs

Key Energy Services has agreed to sell all of its oil and gas properties for $19.7 million. The company expects to use $12.4 million of the proceeds from the sale to pay off its volumetric production payment and to unwind related hedges, resulting in net cash proceeds of $7.3 million. It currently expects to record an after-tax charge of $7.8 million. For the six months ending June 30, the oil and gas properties contributed revenue of $2.9 million and a net loss of $0.5 million. CEO Francis D. John said the company is focused on “developing and enhancing its production services capabilities and will seek to exit those businesses that do not meet these objectives. Our oil and gas operations are not core to our business and, in fact, compete with some of our customers. Therefore, we have elected to exit this business. In addition, the sale of these properties will provide Key with additional cash that will be used for debt reduction and/or expansion of our rental tool operations.” Key is the world’s largest rig-based, onshore well service company and owns 1,492 well service rigs, 2,295 oilfield service vehicles and 76 drilling rigs.

August 13, 2003