Saturday, February 5, 2011

Tucson Area Had Natural Gas Shortage This Week


Some Tucson-area customers may be without natural gas service as late as Monday or Tuesday, Southwest Gas spokeswoman Libby Howell said.
The utility is bringing in about 70 workers from elsewhere to help re-start gas service at homes on Tucson's east side.
About 14,000 Tucson homes east of North Swan Road in the Catalina Foothills and in the Rita Ranch area have been without natural gas service since this morning, Howell said.
Southwest Gas workers will have to go door-to-door in those areas twice, Howell said. First they will turn off the meters at each house, then they will go inside each house to light pilot lights and ensure service has resumed, Howell said.
In response to the outages and record cold, city officials are opening two shelters at 5 p.m. today. They are at Udall Center, 7200 E. Tanque Verde Road and Pantano Christian Church, 10355 E. 29th St.
The Udall location will permit pets but only if they are in crates, and the Pantano location will not accept pets.
A shortage of natural gas in the pipeline that serves Tucson left areas on Tucson's northeast and southeast sides without gas service beginning this morning.
The southern part of Sierra Vista, down to Hereford, also is without gas service. Cochise County has set up temporary warming centers, not equipped as shelters, in Benson, Bisbee, Douglas, Sierra Vista and Willcox.
The places most affected around Tucson are from North Swan Road eastward in the Catalina Foothills to North Wentworth Road and the Rita Ranch area on the southeast side.
Southwest Gas is asking customers who still have natural-gas service to limit their use by turning down the heat and reducing hot-water usage.
The reason for the shortage is not only the high demand by residential customers but also high demand by power companies to fuel their plants, El Paso Natural Gas said in a news release. In addition, power outages and freeze-offs in the areas that supply gas have reduced the supply.
“More gas is being taken off our system than we have supplies coming into the system,” El Paso said.
El Paso supplies the gas used by Southwest’s customers, while Southwest runs the local distribution system. El Paso said it is shifting all the gas possible into its pipeline.
East-side resident Donna Ester said her thermostat was set at 60 degrees all night but the gas went out before it automatically goes up during the day. The result: the indoor temperature was in the low 50s all day and promised to go further down.
“I worry most about my cat because he is always cold,” Ester said via e-mail. “I’ve been heating up a neckwarmer in the microwave and putting it in his bed.”
A drop in the pipeline's pressure began knocking out customers' service around 6:30 a.m., Howell said. As the extent of the problem became clear, the utility turned off service to affected areas.
It’s a scary scenario for elderly people living in Hereford, resident Beverly Manigault said. The temperature dropped below zero in their area, which lies in a dip near the Huachuca Mountains, she said.
Electric space heaters are sold out at local retail stores, but Manigault’s husband was able to buy three at the store on Fort Huachuca, she said.
They’re using two in their home and gave the other to an elderly neighbor, she said.
At Loew's Ventana Canyon resort, on the northeast side, 400 guests found themselves without heat today, General Manager Brian Johnson said. The resort adjusted by serving mostly cold items in the restaurants and providing extra blankets to guests.
About 10 guests checked out as a result, he said. Guests may also request to be moved to another inn, he said.
The resort's engineers also examined the gas fireplace in the resort's lobby and determined it could be used to burn wood, so logs are flaming there now, Johnson said.
"A lot of guests we’ve talked to have been very understanding," he said. "It’s totally out of our control."

Wednesday, February 2, 2011

Natural Gas Processing Complex Deal is Done

ENVER & PITTSBURGH--(BUSINESS WIRE)--MarkWest Energy Partners, L.P. (MarkWest) (NYSE: MWE) and EQT Corporation (EQT) (NYSE: EQT) today announced the closing of MarkWest’s previously announced acquisition of EQT’s natural gas processing complex in Langley, Kentucky and an associated natural gas liquids (NGL) pipeline for $230 million.The acquisition includes a 100 million cubic feet per day (MMcf/d) cryogenic processing plant, a 75 MMcf/d refrigeration processing plant, approximately 28,000 horsepower of compression, and a partially constructed NGL pipeline that MarkWest will complete. In conjunction with the acquisition, MarkWest executed a long-term agreement with EQT to provide processing services for EQT’s Kentucky Huron shale gas and to extend its existing agreement with EQT to provide NGL transportation, fractionation, and marketing services.
“We are very pleased to complete the acquisition of the Langley processing facility and NGL pipeline, which will expand our extensive midstream capabilities in the Marcellus and Huron/Berea shales,” said Frank Semple, chairman, president and chief executive officer of MarkWest. “We are also excited about the quality group of EQT employees who have joined the MarkWest team. We have been a leader in providing fully integrated midstream services in the Northeast for more 20 years and the new facilities and enhanced organization in Kentucky will strengthen our capabilities and provide long-term value to MarkWest and to EQT.”
“We look forward to working with MarkWest in support of the development of our liquids rich plays, Marcellus Shale in West Virginia and Huron Shale in Kentucky," said David Porges, president and chief executive officer of EQT.
About MarkWest
MarkWest Energy Partners, L.P. is a master limited partnership engaged in the gathering, transportation, and processing of natural gas; the transportation, fractionation, marketing, and storage of natural gas liquids; and the gathering and transportation of crude oil. MarkWest has extensive natural gas gathering, processing, and transmission operations in the southwest, Gulf Coast, and northeast regions of the United States, including the Marcellus Shale, and is the largest natural gas processor in the Appalachian region.
This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although MarkWest believes that the expectations reflected in the forward-looking statements are reasonable, MarkWest can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect MarkWest’s operations, financial performance, and other factors as discussed in its filings with the Securities and Exchange Commission. Among the factors that could cause results to differ materially are those risks discussed in the periodic reports MarkWest files with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2009, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2010. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” MarkWest does not undertake any duty to update any forward-looking statement except as required by law.
About EQT
EQT Corporation is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, transmission and distribution. Additional information about the company can be obtained through the company's web site, http://www.eqt.com; Investor information is available on that site at http://ir.eqt.com. EQT Corporation uses its web site as a channel of distribution of important information about the company, and routinely posts financial and other important information regarding the company and its financial condition and operations on the Investors web pages.
Wells Fargo Securities, LLC advised EQT on this transaction.
EQT Cautionary Statements
Disclosures in this press release contain forward-looking statements. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include EQT's guidance regarding the availability of processing capacity and NGL transportation, fractionation and marketing services following the transaction. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements on current expectations and assumptions about the future events. While EQT considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond EQT's control. The risks and uncertainties that may affect the operations, performance and results of EQT's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, "Risk Factors" of EQT's Form 10-K filed for the year ended December 31, 2009 and in the company’s 10-K for the year ended December 31, 2010 to be filed with the Securities and Exchange Commission, as updated by any subsequent Form 10-Qs.
Any forward-looking statement speaks only as of the date on which such statement is made and the company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

Contacts

MarkWest Energy Partners
Frank Semple, 866-858-0482
Chairman, President & CEO
or
Nancy Buese, 866-858-0482
Senior VP and CFO
or
Dan Campbell, 866-858-0482
VP of Finance & Treasurer
investorrelations@markwest.com
or
EQT
Analysts:
Patrick Kane, 412-553-7833
Chief IR Officer
pkane@eqt.com
Media:
Karla Olsen, 412-553-5726
Public Relations Manager
kolsen@eqt.com

Sunday, January 30, 2011

ExxonMobil Sees Future Profit in Natural Gas

Expanding prosperity for a growing world population will drive an increase in energy demand of about 35 percent by 2030 compared to 2005, even with significant efficiency gains, and natural gas will emerge as the second-largest energy source behind oil, ExxonMobil said today as it released its new edition of Outlook for Energy: A View to 2030.
The growing use of natural gas and other less-carbon intensive energy supplies, combined with greater energy efficiency in nations around the world, will help mitigate environmental impacts of increased energy demand. According to the Outlook, global energy-related carbon dioxide emissions growth will be lower than the projected average rate of growth in energy demand.
“Our energy outlook clearly points to a growing demand for energy globally which reflects improving living standards for millions of people around the world. ExxonMobil will continue to invest in technology and innovation to develop new economic energy supplies to help meet this demand while looking for ways to reduce environmental impacts,” said Rex W. Tillerson, chairman and chief executive officer.
“The forecasts also show a shift toward natural gas as businesses and governments look for reliable, affordable and cleaner ways to meet energy needs,” Tillerson said. “Newly unlocked supplies of shale gas and other unconventional energy sources will be vital in meeting this demand.”
The Outlook for Energy is developed annually to help guide ExxonMobil’s global investment decisions. The company shares the findings publicly to increase understanding of the world’s energy needs and challenges. The outlook is the result of a detailed analysis of approximately 100 countries, 15 demand sectors and 20 fuel types and is underpinned by economic and population projections and expectations of significant energy efficiency improvements and technology advancements.
Rising electricity demand -- and the choice of fuels used to generate that electricity -- represent a key focus area, which will have a major impact on the global energy landscape over the next two decades. According to the outlook, global electricity demand will rise by more than 80 percent through 2030 from 2005 levels. In the non-OECD (Organization for Economic Co-operation and Development) countries alone demand will soar by more than 150 percent as economic and social development improve and more people gain access to electricity.
According to ExxonMobil’s Outlook, efforts to ensure reliable, affordable energy while also limiting greenhouse gas emissions will lead to polices in many countries that put a cost on carbon dioxide emissions. As a result, abundant supplies of natural gas will become increasingly competitive as an economic source of electric power as its use results in up to 60 percent fewer CO2 emissions than coal in generating electricity. Demand for natural gas for power generation is expected to rise by about 85 percent from 2005 to 2030 when natural gas will provide more than a quarter of the world’s electricity needs. Natural gas demand is rising in every region of the world but growth is strongest in non-OECD countries, particularly China where demand in 2030 will be approximately six times what it was in 2005.


Tuesday, January 25, 2011

Shale Still in Play for Some


Shale drilling takes a particular expertise. Recently we have seen companies with this expertise do very well as shales and their millions of barrels are just waiting to be tapped. At first, horizontal drilling was performed on natural gas wells, and recently this was expanded to oil. If we are to use the Bakken shale as an example, where drillers are getting about 95% oil, companies like Brigham Exploration Company (BEXP) or Continental Resources Inc. (CLR) are making a mint.
Carrizo Oil and Gas Inc (CRZO) has this expertise. Carrizo is in a situation that could be something great. They were founded in 2003 and since then they have been busy. As of December 31st of 2009, they had participated in drilling 786 wells. At that time they had a 73% success rate.

Carrizo has a sizeable position in the North Sea. They also have accumulated several shale acreages:
Fort Worth Barnett 47000 acres
Marcellus Shale 111290 acres
Marfa Basin 58000 acres
Fayetteville Shale 26000 acres
Eagle Ford Shale 20000 acres
Niobrara Shale 61000 acres
Carrizo's plan is strong organic growth. To do this they are drilling for gas in the Barnett and Marcellus. The Eagle Ford and Niobrara will be drilled for oil. They plan to drill the low risk Barnett Shale initially. Estimates have this location's proved reserves at 570 Bcfe with potential for an additional 780 Bcfe. There are 470 potential well sites (500 foot spacing) . They are planning on developing their Marcellus Shale position. They are planning on being much more aggressive with respect to their liquids positions. Due to the better margins, the Niobrara and Eagle Ford Shales are a priority. In 2010, Carrizo drilled 5 wells and frac'd 3 in Eagle Ford. Eagle Ford will have up to 2 rigs running this year. The Niobrara had 3 drilled and 1 frac'd, and are expecting at least one rig running. These two areas could add up to 7000 BOED sometime this year. At today's prices this will increase production by one-third and double revenue. 

Saturday, January 22, 2011

How Do You Frac a Well

Activist shareholder groups are pressing natural gas companies to reduce the environmental impact of a drilling technique called hydraulic fracturing.
The investor groups say they have filed resolutions with nine oil and gas companies that use hydraulic fracturing, or "fracking," to extract gas from shale formations thousands of feet underground. Critics contend that fracking has the potential to pollute groundwater. The industry says it is safe.
The shareholder proposals ask drillers to explain how they plan to manage the risks associated with fracking. The shareholders also want full disclosure of fracking chemicals, a reduction in the volume and toxicity of the chemicals and improvements in well construction

Friday, January 21, 2011

Chinese Participate in USA Well Drilling Program

PORTLAND, OR--(Marketwire - January 20, 2011) - Xun Energy, Inc. ("XNRG") (OTCBBXNRG) Xun Energy, Inc. announces the Company will participate in a planned 15 well drilling program with Global Energy Acquisitions, LLC and its affiliates ("GEA"). GEA is a Florida limited liability company. GEA intends to drill 15 oil and gas wells on a 416 acre parcel located in Adair County, Kentucky. Each well will be drilled to a depth of up to 2,000 feet in order to reach the Murfreesboro or Knox Formations. The targeted date for the completion of the $2,550,000 funding requirement has been set to February 28, 2011.
Upon the success of the drilling program, GEA will pay to XNRG up to 12.5% gross royalty on revenues generated from the drilling program. XNRG's participation will be based upon XNRG's investment in GEA's 15 well drilling program. XNRG's participation interest has not yet been established.
Peter Matousek, the Company's president, commented, "The agreement with GEA provides the Company with an opportunity to participate in an oil and gas program which would provide the Company with steady cash flow." 
About GEA
GEA is in the business of investing in oil and natural gas exploration programs.
About XNRG
Xun Energy, Inc. is a development stage company with limited assets. The Company's prospects will be subject to securing financing and the success of the drilling program.
This Press Release contains forward-looking information within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the Private Securities Litigation Reform Act of 1995 and any amendments thereto. Such forward-looking statements by definition involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that reserves, production, pricing levels or other factors pertaining to the oil and gas operations will be sustained at the expected rates or levels over time. Discussions of factors, which may affect future results, are contained in our recent filings. Under no circumstances does this Press Release constitute an offer to sell or a solicitation of an offer to buy the securities of the company described in this Press Release in which such offer, solicitation or sale of securities would be unlawful prior to registration, qualification or filing under the securities laws of any jurisdiction.
For Further information on this news release or on XNRG, please visithttp://www.xunenergy.com/ or contact XNRG's Investor Relations Department, telephone: 1-775-200-0505, e-mail address: investor@xunenergy.com.

Thursday, January 20, 2011

Encana Selling Natural Gas Plant

Encana (TSX:ECA, NYSE: ECA) said Tuesday it has agreed to sell its Fort Lupon natural gas processing plant to Western Gas Partners (NYSE: WES) for $303 million.

The plant, located in Colorado, processes about 84 million cubic feet per day (MMcf/d) of natural gas. The sale also includes five natural gas gathering pipeline systems and associated compression facilities.

Under the agreement, Encana USA has processing fees that allows the company to extract about 3,500 barrels of natural gas liquids per day from its processed natural gas. 

"This divestiture is part of Encana's ongoing initiative to capture significant incremental value from its midstream assets -- natural gas processing plants, pipeline gathering systems and compression facilities,” said Renee Zemljak, an executive at Encana.  

“We are looking to enter into long-term and competitive fee-for-service agreements with industry-leading midstream companies.”

Encana is also trying to sell its Cabin Gas Plant, which has received regulatory approval for two phases of development for a total processing capacity of 800 MMcf/d.  The plant is in the early stage of constructing the first phase, which is designed to have capacity of about 400 MMcf/d.  The plant is scheduled to start processing natural gas from Horn River, British Columbia in 2012.

The sale of the Fort Lupon plant, subject to regulatory approval, is expected to close in the first quarter of 2011.