Chesapeake Energy completed its acquisition of Hugoton Energyafter receiving shareholder approvals. Proforma for the Hugotontransaction and other announced pending acquisitions, Chesapeake’sproved oil and gas reserves will be about 1,050 Bcfe, of which 80%are natural gas. In addition, about 70% of Chesapeake’s reserveswill be proved developed producing, and 75% will consist oflong-lived Midcontinent reserves. Estimated proforma dailyproduction will exceed 410 MMcfe. Trading of Hugoton stock ceasedMarch 10, and each outstanding common share of Hugoton stock wasconverted into the right to receive 1.3 shares of Chesapeake commonstock. Holders of fractional shares will receive $8.78/Hugotonshare. About 26 million additional shares of Chesapeake will beissued to Hugoton shareholders. Including $120 million of Hugotondebt assumed by Chesapeake, the transaction is worth about $300million.
Daily GPI
Articles from Daily GPI
FERC Sets Maine LNG Project for Hearing – Again
Despite already having held a series of hearings on the project,FERC yesterday set for hearing the issue of whether the market needfor a controversial liquefied natural gas (LNG) facility plannedfor a Maine community could be better met by alternative pipelineprojects.
Dominion Makes Bid for Archer
Dominion Resources unit Dominion Energy has agreed to pay (US)$128 million, C$7.60/share, to acquire Archer Resources Ltd. ofCalgary, AB. The deal gives Dominion Energy control of Archer’sdaily production of approximately 72 MMcf/d of gas and 1,500 b/dof oil in Alberta, plus Archer’s 16 processing facilities and over500,000 undeveloped acres. Dominion Energy said the deal, ifconsummated as expected, would increase its gas productioncapability by approximately 50%.
Chevron Fighting Florida Over Offshore Development
Chevron says it will appeal a recent preliminary ruling by theState of Florida against its development of the Destin Dome 56Unit, about 25 miles offshore from Pensacola, FL.
EPA Questions Alliance NGLs
The U.S. Environmental Protection Agency has found some missingelements in the draft environmental impact statement (DEIS)prepared by the Federal Energy Regulatory Commission on theAlliance Pipeline project which is in competition with Voyaguer tocarry western Canadian supplies to the Chicago area.
Sources Think New Upticks Mark Peak of Rally
The overall price trend was up again Tuesday, but the market washardly a model of consistency. Some points, such as the Northernand Southern California borders and PG&E citygates, barelymanaged to maintain flatness or eke out small gains, while otherssuch as Waha and Northeast citygates continued to surge upward byas much as a dime or more. A marketer reporting Transco Zone 6(NYC) topping $2.60 said she hadn’t expected to see those kind ofnumbers again until next fall at the earliest.
April Futures Slip Back Below $2.15
The April Nymex contract once again failed to break above majorresistance at $2.19 on Tuesday, and as a result, the spot monthfinished the day down 3.2 cents to $2.137. Total estimated volumecame in at 34,371.
PG&E, UDS Announce $2 Billion Energy Deal
PG&E Corp. and Ultramar Diamond Shamrock Corp. (UDS)announced yesterday they had signed a letter of intent to enterinto what is probably the largest energy purchase alliance to datein the industry, representing about $2 billion in electricity,natural gas and steam purchases over a seven-year period. UDS isone of the largest independent refiners in the U.S., with sevenrefineries in the U.S. and Canada processing 650,000 barrels perday, 6,400 branded retail gasoline/convenience stores, and a largehome heating oil business in the Northeast.
Aquila Gas Pipeline on the Auction Block
Given the lofty prices paid for midstream assets recently, SanAntonio, TX-based Aquila Gas Pipeline believes the time is right totest the waters for a possible sale or merger. The Texas andOklahoma gas processing and pipeline company has hired MerrillLynch & Co. to assist in the effort.
Kansas Pipeline Becomes Jurisdictional
Putting an end to several years of squabbling, Kansas PipelineCo. has acquiesced to FERC jurisdiction but only on the conditionthat the Commission grandfather the existing, state-approved ratesin its contracts until it is ordered to file a Section 4 rate case.
