North America

04 January 2010

Canada

  • Suncor Energy's oil-sands production in November averaged around 314,000 b/d, with year-to-date output at the end of the month averaging about 297,000 b/d. The firm's production target for 2009 was 290,000-305,000 b/d. Separately, Suncor is planning a C$5.5bn ($5.2bn) capital spending programme for 2010. Around C$1.5bn will be directed primarily at growing its oil-sands operations, while C$4bn in spending is targeted to sustaining existing operations.
  • Canadian Natural Resources expects production at the C$9.7bn Horizon oil-sands project in northern Alberta to stabilise at its 110,000 b/d target by mid-year. Horizon's output has been well below target because an equipment failure and high clay content in the reserves.
  • EnCana has completed the split of the company into separate gas and oil businesses. EnCana distributed shares in the spin-off oil company Cenovus Energy on 7 December, on a one-for-one basis. Cenovus will take control of oil-sands operations, including oil producing properties in northern Alberta and a half share in two ConocoPhillips refineries in the US, as well as some conventional oil and natural gas properties in Western Canada.
  • The Canada-Nova Scotia Offshore Petroleum Board has invited bids by a 24 June deadline for two shallow-water parcels within the Sable sub-basin. A number of additional exploration prospects with considerable hydrocarbon potential have been identified on the parcels.
  • Tamm Oil and Gas has entered a farm-in agreement to earn heavy-oil rights on up to 1,280 acres through Swiss Zentrum Energie Trust in the Manning area of northwest Alberta. Tamm will have the right to pay 100% of the costs to earn an undivided 100% of the Zentrum working interest in the land with Zentrum retaining a non-convertible 3% gross overriding royalty interest. A two-well drilling programme has received management approval and Tamm is to license two wells to be drilled on these additional properties with the goal of drilling this winter.
  • Norway's Statoil has appointed Lars Christian Bacher as president of its Canadian operations. Bacher will oversee oil sands development in Alberta and E&P off the coast of Newfoundland and Labrador. Statoil's oil-sands leases contain around 2bn barrels of recoverable oil.
  • The Alberta government has signed a letter of intent with Swan Hills Synfuels for a carbon capture and storage (CCS) project that will turn coal into low-emissions electricity and capture 1.3m t/y CO2 for enhanced oil-recovery projects. The in situ coal-gasification project will tap a deep, unminable coal bed near Swan Hills and turn the coal into a synthetic gas to generate clean electricity. The province will invest C$285m in the project, from its C$2bn CCS fund.
  • The Alberta government has also signed a letter of intent with Enhance Energy and North West Upgrading to build 240 km of CO2 pipelines to increase greatly the capacity for future carbon capture and storage projects in the province. The pipeline system will connect the industrial heartland near Fort Saskatchewan to producing oilfields near north of Red Deer.

United states

  • Anadarko Petroleum made a Gulf of Mexico deep-water discovery in December, with a well drilled to a depth of 20,000 feet in about 7,100 feet of water at Keathley Canyon Block 875. Anadarko (50% and operator) said it would drill a sidetrack appraisal well at the reservoir, which showed a net pay of more than 200 feet. Plains Exploration & Production holds a 33.33% interest, with Mariner Energy holding 16.67%.
  • Investor group BCR Holdings plans to construct Bully Camp Gas Storage, a $230m salt-cavern gas-storage facility in Lafourche Parish, Louisiana.
  • Linn Energy has agreed to acquire certain oil and gas properties in the Permian and Anadarko basins from an undisclosed seller for $154.5m.
  • SandRidge Energy has agreed to acquire oil and gas properties in the Permian basin of West Texas from Forest Oil for $0.8bn.
  • Pacific Ethanol plans to reopen its ethanol-production facility in Burley, Idaho, by January 2010 because of improving market conditions. The plant was shut down in February 2009.
  • Constellation Energy Group plans to acquire the proposed $140m, 70 MW Criterion wind power project in Garrett County, Maryland, from Clipper Windpower for an undisclosed sum.
  • Progress Energy Carolinas intends to permanently shut all of its remaining coal-fired power plants in North Carolina that do not have flue-gas desulphurisation controls by the end of 2017. The facilities represent about 30% of Progress' coal-fired generating capacity in North Carolina.
  • Duke Energy has begun producing electricity from its 99 MW Campbell Hill WindPower Project near Casper, Wyoming.
  • An Enterprise Products Partners subsidiary has acquired a 70% interest in the Rio Grande Pipeline from Holly Energy Partners subsidiary HEP Navajo Southern for an undisclosed sum. The 265-mile NGLs pipeline runs from Ector County, Texas, to a Pemex-owned interconnect at the Mexican border south of El Paso.
  • Williams subsidiary Northwest Pipeline has received federal approval to build a $465m, 15.5 mile mainline loop that will carry 150,000 dekatherms a day of gas from the Piceance Basin in Colorado to the Opal Hub in Wyoming. The Sundance Trail Project should be operational by November 2010.
  • Construction has begun on a biomass cogeneration facility at the US Department of Energy's (DOE) Savannah River site in South Carolina, which will be fuelled primarily by forestry residues left over from timber harvesting. The facility will generate 240,000 pounds of steam an hour, which will be piped to customers off site, and will have an electricity generating capacity of 20 MW, most of which will be consumed on site by DOE research facilities. The plant is scheduled to start operating in December 2011.
  • Pacific Renewable Fuels and Red Lion Bio-Energy have formed Synterra Fuels, a joint venture that focuses on the commercialisation and deployment of integrated bio-refineries for the production of synthetic diesel fuel and renewable electricity from waste biomass.
  • Holly Energy Partners has acquired from Holly the Roadrunner pipeline, a new 65 mile pipeline connecting Holly's refining facilities in Lovington, New Mexico, to the terminus of a Centurion pipeline extending between West Texas and Cushing, Oklahoma, and a new 35 mile pipeline that connects Holly Energy Partners' New Mexico crude-gathering system to Holly's Lovington refinery. The purchase price was $46.5m in cash.
  • The Environmental Protection Agency has delayed until mid-2010 a decision on a waiver that would have approved the sale and use of up to 15% of ethanol in gasoline, up from the present 10% limit. The agency had planned to make a decision by 1 December 2009.
  • Inbicon, Otoka Energy and Great River Energy have agreed to collaborate on licensing, development and construction of a biomass refinery in North Dakota that would convert over 40,000 t/y of wheat straw into liquid fuels, solid-fuel lignin pellets and other co-products. The refinery would be integrated with the adjacent Spiritwood Station, a 62 MW coal-fired plant being constructed by Great River Energy.
  • DCP Midstream Partners has acquired gas-gathering and treating assets in northern Minnesota from DTE Energy subsidiary MichCon Pipeline for $45.1m in cash.
  • Bobcat Gas Storage has begun commercial operations in the second cavern at its Port Barre gas-storage facility in St Landry Parish, Louisiana. Cavern II provides 7.8bn cf of working-gas capacity.
  • Vanguard Natural Resources has agreed to acquire oil and gas assets in the Permian basin from a privately owned seller for $55m. The properties have estimated total proved reserves of 3.2m boe.
  • American Municipal Power has cancelled plans to construct a $3bn coal-fired power plant in Meigs County, Ohio, because of an unexpected 37% increase in the project's cost.
  • Energy XXI has agreed to acquire 30 producing fields in the Gulf of Mexico shelf from MitEnergy Upstream in a cash transaction worth $283m.
  • NRG Energy is acquiring First Solar's 21 MW solar facility in Blythe, California, for an undisclosed sum. The facility is largest utility-connected photovoltaic system in the state.
  • ZeaChem has started construction on a 250,000 USG/y cellulosic-ethanol plant in Boardman, Oregon.
  • Valero Energy is to close its 180,000 b/d refinery in Delaware City, Delaware, citing continuing financial losses (see p8).
  • Denbury Resources plans to acquire a 95% working interest in the Conroe Field, near Houston, from Wapiti Energy for $431m in cash and stock.
  • Talon Oil & Gas has agreed to acquire Denbury Resources' remaining Barnett Shale assets for $210m.
  • Range Resources has sold its Fuhrman Mascho Field properties in West Texas to an undisclosed buyer for about $182m.
  • Concho Resources has agreed to acquire interests in certain producing and non-producing assets in the Wolfberry trend in the Permian basin from multiple private sellers for $225m in cash. The properties have proved reserves of about 16m boe and 22m boe of identified unproved reserves.
  • Geokinetics will acquire the onshore seismic data-acquisition and multi-client data library business of Petroleum Geo-Services Onshore in a cash and stock transaction valued at about $210m. The acquisition will create the world's second-largest provider of onshore seismic data-acquisition services in terms of crew count.
  • Chevron plans to withdraw from motor-fuels operations in Washington, DC, and 12 states from Indiana to South Carolina by the middle of 2010. It ships about 2.3m USG/d of gasoline to those areas.
  • Sequent Energy Management has acquired the wholesale gas-marketing business of Integrys Energy Services for an undisclosed sum.
  • Private-equity firm LS Power has bought five peaking and three combined-cycle generation assets and the remaining interest in a project under construction in Texas from Dynegy for an undisclosed sum.
  • Helix Energy Solutions Group subsidiary Energy Resource Technology GOM has made a discovery at its Wide Berth prospect, in 3,740 feet of water in Green Canyon Block 490 of the Gulf of Mexico.
  • Williams has placed the second, 102,000 dekatherms a day phase of the Sentinel expansion project on its interstate Transco gas pipeline system into service in the northeastern US.
  • South Korean investment firm Atinum Partners has agreed to acquire the US-based energy business of Sterling Energy for $90m.





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