bob,
There is no longer alink to this but I saved it. Bob
Monday March 31 1:12 PM EDT
Union Pacific Resources to Invest $100 Million in
Colorado to Produce Industrial Gases for High Tech
Industries
FORT WORTH, Texas, March 31 /PRNewswire/ -- Union Pacific Resources Group Inc.
(UPR) (NYSE-UPR) today announced it will invest approximately $100 million in eastern Colorado to develop several natural gas fields which contain high concentrations of helium. The project will include drilling natural gas wells, construction of a gathering and compression infrastructure, a natural gas processing plant and a helium liquefaction facility. In addition to helium and natural gas, the facility, to be located near Cheyenne Wells, will also produce natural gas liquid (NGL) products.
The combined facilities will employ up to 16 people 2nd will have an annual payroll in excess of $550,000. The plant will be located on a 25-acre site one mile south of U.S. Hwy, 40, southwest of Cheyenne Wells in Cheyenne County. The new employees will be in addition to the
26 UPR employees who currently work out of UPR's Cheyenne Wells office.
The facility will operate 24 hours a day, processing 35 million cubic feet per day (MMcfd) of natural gas and producing liquid helium for ultimate use in high-technology processes. If necessary, the plant may be expanded to process a total of 50 MMcfc1. Praxair Inc., a
Danbury, Conn., industrial gas company, will purchase the liquid helium produced in Cheyenne Wells.
Liquid helium is used to cool super-conducting magnets in medical magnetic resonance imaging (MR]) systems. Additionally, the fiber optic industry uses helium in the manufacturing of fiber optic strands.
"I welcome this investment by Union Pacific Resources," said Colorado Governor Roy Romer. "By creating these value-added jobs tied to the high-tech world, UPR is helping to diversify the economy in eastern Colorado - an important part of our efforts to make sure rural Colorado shares in the state's strong economic growth."
Jack L. Messman, chairman and CEO of UPR, said the new facility represents a new strategic direction for his company, increasing the value of its more than 7.5 million acres of land grant property in eastern Colorado and southwest Wyoming.
"Colorado remains strategically important to UPR, because this facility represents our entry into the helium production market," Messman said, "Helium's growing importance to the high-tech
industries has created dramatically higher demand. Our Colorado facility will play a critical role in meeting that demand."
Cheyenne County officials said the now processing facility continues its longstanding partnership with UPR. Cheyenne County has benefited from not only the tax base that UPR represents but also the general activity that UPR has brought to the area. Over the past three years, UPR has paid in excess of $4 million in taxes to Cheyenne County. The county feels that building a community/industry relationship with a company as strong as Union Pacific Resources benefits both the local economy and UPR.
"The commission has worked hard with UPR to make Cheyenne County a productive, workable investment for this new, high-tech facility," said county commissioner Jerry Allen. "UPR has been one of the leaders in our economic development and we are pleased they have chosen to expand their presence here with a forward-looking project. This project will benefit all of Cheyenne County with construction jobs, production jobs, and production revenue to mineral owners as
well as tax base for the county."
UPR has been active in eastern Colorado since 1979. Today, they operate 195 wells. UPR's net production from these wells and wells in which they own an interest but do not operate is 4,050 barrels of oil per day, 6.1 million cubic feet of natural gas per day and 300 barrels of NGL's per day. UPR anticipates drilling 30 wells to support the facilities being constructed under this project with additional wells to be drilled on an ongoing basis.
Gas that is produced in eastern Colorado is characterized by it's high nitrogen content and low BTU(British Thermal Unit) value. Heretofore, the gas developed in eastern Colorado was transported to gas and helium plants in Kansas for processing. This arrangement has caused both operational and economic challenges. Operationally, the pipelines transporting the gas and the plants in Kansas have a limited amount of capacity thereby restricting the amount of eastern Colorado gas that can physically be processed. Economically, it was very costly to transport the gas to a plant located more than 100 miles away.
UPR has, for some time, recognized the value of the low BTU and high helium content gas but has struggled with the reliability and cost of transportation and the capacity constraints that exist.
By developing the gas processing and helium complex in eastern Colorado, UPR has developed a solution that will be mutually beneficial to all eastern Colorado producers as well as to the state
of Colorado. By building a new facility, the transmission costs will be substantially reduced and the capacity constraints will no longer exist. This will allow more wells to be drilled. More wells
translates into additional production for area producers and more tax revenues for the state of Colorado. Additionally, more production means more jobs for the local community.
The UPR plant will utilize a cryogenic extraction process to recover NGL's and helium from the inlet gas stream. A pressure swing adsorption process will be used to purify the helium. The purified helium may then be marketed as Grade-A, gaseous helium or may be liquefied through an additional cryogenic process which will be available at the plant.
The UPR facility has received appropriate zoning from Cheyenne County and has applied for the necessary permitting from the Colorado Department of Health. UPR will commence construction of the facilities in the third quarter of 1997 and expects to be in service by the second quarter of 1998.
Union Pacific Resources Group Inc. (NYSE-UPR) is the nation's largest independent oil and gas exploration and production company. Headquartered in Fort Worth, Texas, UPR has been the #1 domestic driller for the past five years.
This press release, other than historical financial information, consists of forward looking statements that involve risks and uncertainties including planned construction and drilling activity,
expected production efforts and volumes and budgeted capital expenditures and other risks and uncertainties detailed in the Company's SEC reports, including the report on Form 10-K for the
year ended December 31, 1996. Actual results may vary materially. SOURCE Union Pacific Resources Group Inc.
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