MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WED., JANUARY 14, 1998 (5)
OTHER COMPANIES IN THE NEWS
ALTERRA RESOURCES INC. reported that drilling of an initial well at the Lawson Unit, Sumner County, Kansas has been completed ahead of scheduled and is now tied-in, producing and selling natural gas to the nearby Ashton Gas Gathering System.
More specifically, favourable log data displayed excellent porosity from the targeted Severy Sands formation at 1,650 feet and that the zone was structurally high over the offset well due one location south. Flow rates of the well are expected to level off between 125 mcf and 200 mcf per day. Based on the initial shut in pressures and flow tests engineer estimated reserves are considered to be 290 mmcf of natural gas over the extended life ofthe well.
Alterra holds a 55 percent working interest in this initial, producing well and will receive 44.69 percent of the net revenue (ref. press release Nov. 27, 1997). The company has the option to drill up to 14 wells at the Lawson Unit and, pending financing, expects to start drilling a second well of the initial 3 well program in the near future - the company will report further at such time.
ALPINE OIL SERVICES CORP. announced that its previously announced acquisition of Alpha Oil Services S.A., an Argentinean service company, will not be proceeding.
The transaction was originally scheduled to close in September 1997, but was extended until January 1, 1998. Negotiations ended, as Alpha was not willing to sign a non-competition clause and accept responsibility for tax liabilities incurred during 1997. For these reasons, Alpine felt it was not in the corporations's best interest to finalize the acquisition.
Existing service contracts and the Corporations's operations in Argentina remain unaffected by this development.
Alpine is currently pursuing additional corporate transactions for its
Argentine operations to increase its market presence in Argentina.
INTERNATIONAL - COMPANIES IN THE NEWS
None
INTERNATIONAL - COUNTRIES IN THE NEWS
An updated OPEC Fact Sheet is now available. To access this report, the World Wide Web address is:
eia.doe.gov
Included in the OPEC Fact Sheet are estimates of October 1997 and
January October 1997 average crude oil production from the 11 OPEC countries, as well as the 1997 production quotas and the new 1998 production quotas. Also included is information on OPEC's share of the world's oil supply and the OPEC Basket price for November 1997.
PIPELINES
Unocal Corporation (NYSE: UCL) said today it has increased its interest in the Alliance Pipeline project to 9.1 percent, by acquiring the partnership interests of RANGER OIL LTD. and PINNACLE RESOURCES LTD. Details of the transactions, including share and unit prices, were not disclosed.
Prior to the transactions, various Unocal subsidiaries held a 5.0 percent equity stake in the Alliance Pipeline limited partnerships.
"The Alliance Pipeline project is an excellent long-term market-to- resource opportunity for Unocal," said Brian C. Conners, Unocal's general manager for pipelines. "This pipeline provides us with three major earnings sources -- increased value of our Aitken Creek and other upstream gas assets in Canada, a strong revenue stream from pipeline tariffs, and good returns on the natural gas liquids plant."
The Alliance Pipeline system is designed to carry natural gas from western Canada to the Chicago-area market center for distribution throughout North America. Unocal's Aitken Creek gas storage and processing facility is located at the origin of the pipeline. The $US3.0 billion, 1,900-mile-long, large- diameter pipeline and natural gas liquids extraction plant are being developed by Canadian and U.S. limited partnerships comprised of gas producing, marketing and pipeline companies. The projects are scheduled for start-up in late 1999 subject to receiving necessary Canadian and U.S. approvals.
The Alliance Pipeline currently has long-term shipper commitments to transport 1.3 billion cubic feet of gas per day from Canada into the U.S.
IMPERIAL OIL LTD. said on Wednesday that Koch Industries Inc unit Koch Oil Co Ltd signed up as a participant in its proposed northern Alberta heavy oil pipeline project.
Amoco Corp unit Amoco Canada Petroleum Co Ltd is the other partner in the planned Thicksiver Pipeline, which would ship 330,000 barrels of heavy oil a dy to Hardisty, Alberta from Cold Lake Alberta.
Imperial is operator and has a 58 percent stake in the C$250 million project, whose application is currently before the Alberta Energy and Utilities Board. Amoco and Koch each have a 21 percent interest.
The three companies are major heavy oil and bitumen producers in northern Alberta's Cold Lake region.
The project would include two parallel lines running the 250 km (155 mile) distance to Hardisty, which is a major terminal for the IPL Energy Inc Interprovincial Pipe Line to the U.S. Midwest and the starting point of the Express Pipeline to Wyoming.
A 36-inch line would would transport the heavy oil and the other 12-inch line would ship light-hydrocarbon diluent in the other direction. Diluent is blended with the heavy oil to make it flow inthe pipeline more easily.
Imperial said the system's capacity could be boosted to 700,000 barrels a day with the addition of pumping stations.
"This capacity will accommodate future expansions for ThickSilver participants, volumes from other Cold Lake area producers and an extension of the pipeline to the Fort McMurray area after the turn of the century," Imperial said.
The companies planned to start construction in the fall of 1999 for an in-service date in the year 2000, pending regulatory approval.
More on these stories:
Three major U.S.-based companies announced separately yesterday they are taking a bigger piece of Canada's booming pipeline sector.
Privately owned Koch Oil Co. Ltd. of Wichita, Kan., has acquired a 21% interest in the $250-million ThickSilver heavy oil pipeline project.
Duke Energy Corp. of Charlotte, N.C., has purchased a 9.8% interest in the proposed $3.7-billion Alliance natural gas pipeline from Cordeca Corp., a Calgary-based gas marketing company,and other Alliance partners. The amount was not disclosed.
Unocal Corp. of El Segundo, Calif., has increased its interest in Alliance to 9.1% from 5.5% previously held by various subsidiaries. Unocal purchased the interests of two producers, Pinnacle Resources Ltd. and Ranger Oil Ltd., for undisclosed amounts.
In the ThickSilver project, Imperial Oil Ltd., with a 58% interest, would operate two parallel 250-kilometre pipelines between Cold Lake and Hardisty in Alberta. One is for blended bitumen and theother for diluent. Amoco Canada Petroleum Co. Ltd. has the remaining 21% interest.
"We intend to grow our business operations in Canada by investing in projects that provide long-term value," said Tammy Sauer, a spokeswoman for Koch, the second largest privately owned company in North America and one of Canada's largest heavy oil producers."
This seems like a natural fit." ThickSilver, scheduled to be built in 1999 and to be in operation by2000, would transport bitumen from its owners and other producers.
Meanwhile, Alliance president Dennis Cornelson said his project's increasing pipeline company ownership is part of its expected evolution.
Alliance started as a producer-led project, but most original producers have sold their stakes in the past few months, while
maintaining their shipping commitments.
The two remaining producers are Unocal and Gulf Canada Resources Ltd., which continue to hold 8%.
Cordeca, representing a group of small producers, was one of Alliance's original backers. Its prime shareholder was junior producer Genesis Exploration Ltd. The company said it sold its indirect interest in the project for $8.7 million, a gain of $4.9 million to be used to reduce debt.
CHAUVCO RESOURCES LTD. was one of the producers that rolled its interest into Alliance into Fort Chicago Energy Partners LP. The partnership's 26% stake in Alliance raised $380 million in a recently completed issue. Units (FCE/TSE), which started trading last week, closed unchanged yesterday at $6.60.
"Duke's equity purchase and Unocal's increase demonstrate a continuing natural evolution and further strengthening of the ownership structure of the Alliance partnership," Cornelson said.
Unocal said its increased participation in Alliance will result in higher earnings from its Aitken Creek gas storage and processing facility, located at the start of the pipeline, and higher revenue from pipeline tariffs.
Unocal spokesman Barry Lane said the Alliance deal is not linked to the company's recently announced marketing of its Canadian oil and gas assets, valued at $500 million. It is expected to dispose of them on a segmented basis in exchange for equity.
The proposed Alliance pipeline would carry 1.3 billion cubic feet of natural gas daily from Western Canada to Chicago.
If approved by regulators, the pipeline would be completed as scheduled by the end of 1999, Cornelson said.
MISC.
Westcoast Energy Inc's McMahon gas processing plant in northeastern British Columbia was operating at near-capacity levels on Wednesday after a five-hour shutdown cut production yesterday, Westcoast said.
"We're back in business. There's no ongoing problem here, by any means," Wescoast spokesman Paul Clark told Reuters.
The 700-million-cubic-feet-a-day plant was shut down on Tuesday by a computer failure at the cogeneration plant that provides power and steam to the gas plant.
Clark said about 240 million cubic feet of production was lost as a result of the outage. |
