Oil Trade Official Disputes Claim of Robust Leasing

Pointing to the slower pace of leasing for oil and natural gas in the first year of the Obama administration, an official with an independent producer association said Interior Secretary Ken Salazar’s tirade against oil and gas associations was unjustified.
In announcing that the U.S. Department of the Interior plans to hold 38 quarterly oil and natural gas lease sales for onshore public lands in 2010, Salazar blasted oil and gas trade associations for uttering untruths about the department’s onshore and offshore leasing programs, saying they were acting like an “arm of a political party” during an election year by repeatedly launching attacks against the department.
A position paper by the Independent Petroleum Association of Mountain States charges irregularities in DOI’s oil and gas leasing program. Conflicting decisions by the DOI counter statements from the administration that support more U.S. natural gas development by hindering producers’ efforts to develop domestic natural gas beneath western public lands.
The Mountain States association claims the irregularities include $100 million of unissued leases in Colorado, Utah and Wyoming; reduced lease sales, deferred leases and withdrawn leases; permitting backlogs; failure to issue permits using categorical exclusions and indefinite holds on project-level environmental analysis.
Salazar has “repeatedly stated that the Obama administration is not ‘anti-oil and gas,’ yet when it comes to Interior’s onshore natural gas and oil program, the record suggests otherwise,” the association said in the paper.
“A series of Interior decisions has created uncertainty in the management of the onshore program, threatening the supply of domestic energy,” it read.
“Efforts to restrict the federal natural gas and oil program put at risk 15 percent of the nation’s gas supply,” said Kathleen Sgamma, IPAMS government affairs director. “For example, DOI has severely reduced lease sales this year. Compared to the first year of the Clinton administration, the Obama administration has issued 1,934 fewer leases and 1,146,949 fewer acres in the Intermountain West, 32 percent and 46 percent reductions respectively.”
In response, the DOI said the department has offered more than 55 million acres in 29 onshore lease sales and two offshore auctions since January, which have raised more than $931 million. The U.S. Bureau of Land Management, which plans to hold a total of 35 onshore lease sales this year, has held 29, including seven since September. Those sales offered 2,288 tracts totaling 2.7 million acres, and the 1.2 million acres sold generated more than $126 million in revenue.
SandRidge Energy Acquires Permian Basin Properties
SandRidge Energy Inc. spent $800 million to acquire oil and gas properties in the Permian Basin from Forest Oil Corp. and one of its subsidiaries.
About $720 million of the purchase price is for the reserves and $80 million to undeveloped acreage, equipment and other assets. The Oklahoma City-based company anticipates closing by Dec. 31, and the acquisition will be financed with borrowings under the company’s existing credit facility, $200 million of proceeds from the placement of new shares of mandatory convertible preferred stock and the proceeds of a planned public offering of the company’s common stock.
There is an estimated 80 million barrels of oil equivalent, or 482 billion cubic feet of gas equivalent, of proved reserves in the field. About 65 percent of the reserves are in oil and natural gas liquids. Current daily production is about 7,600 BOE. More than 90 million barrels of oil equivalent of estimated probable and possible reserves.
Clifford Power Systems Signs Agreement
Clifford Power Systems Inc. signed an agreement to represent Generac Power Systems in north Texas, Oklahoma and Arkansas.
Financial terms were not disclosed.
With current revenues of $30 million, the move positions Clifford Power Systems to meet its five-year, $50 million expansion and growth plan, said Ken Clifford, CEO and founder of the company.
“The synergies between both companies is maximized by our sole focus on power generation,” Clifford said.
Generac Power Systems is recognized as a leader with state-of-the-art manufacturing, speed to market, superior service and flexibility to meet customer needs.
In 1985, Clifford Power Systems was founded as a distributor in the power-generation industry.
Barnett Shale Study Could Lead to Stricter Limits
Texas environmental regulators asked natural gas producers operating in the Barnett Shale to voluntarily reduce air pollution emissions at drilling sites.
Regulators are considering more stringent permitting rules.
Marcellus Player Secures Takeaway Capacity
Trans Energy Inc. has secured 45,000 million BTUs per day of firm natural gas takeaway capacity in its main operating areas of Marshall, Wetzel and Marion counties in West Virginia from Caiman Eastern Midstream LLC, the company said.
Geological Survey Suggests
Bountiful Frontier in Canada
Natural gas producers have no shortage of fresh, large drilling targets as exploration campaigns spread out on a new eastern industry frontier, says a report by the Geological Survey of Canada.
Climate Change Debate Gets Hotter
A controversy over possible falsified climate change reports has been growing in the U.S. and England.
It happens as world leaders, including President Barack Obama, prepare to attend the United Nations Framework Convention on Climate Change to be held in Copenhagen this week.
EXCO to Hike Rig Count in Texas, Louisiana Shale Plays
Boosted by funding from joint venture partner BG Group PLC, EXCO Resources Inc. said it would increase its natural gas-directed onshore rig count by four to 17 in the first three months of 2010.
Most of the drilling is to target east Texas and north Louisiana.
Several Factors Blamed For Gas Production Dip
Lower 48 natural gas production fell by about 2 percent, or 1.39 billion cubic feet per day, in September from August, according to the Energy Information Administration.
The drop was due to a combination of plant maintenance, repairs and shut-ins brought on by depressed gas prices, said EIA in a report.
Canada Receives First LNG Tanker From Qatar
The Q-Flex MV Mesaimeer, one of the largest liquefied natural gas tankers of its kind, arrived at Saint John, Canada, to deliver 4.6 billion cubic feet of LNG to the Canaport LNG regasification terminal.
Triple Diamond Energy Logs Wilcox Discovery
Triple Diamond Energy Corp. reported a discovery in its Wilcox Sand prospect acreage north of the Central Oklahoma Oil Platform in Seminole County.
The Overlook No. 14-1 was drilled to 4,563 feet. Logging samples indicate the Overlook No. 14-1 well encountered significant hydrocarbon pay in the Wilcox Sand formation, the company said.
Sub-surface mapping and electric logs support estimates of 2.6 million barrels of recoverable reserves within the 560-acre closure.

Was this article helpful?

Related Articles

Leave A Comment?