Tuesday, March 8, 2011

Pipeline Company Going Public

HOUSTON--(BUSINESS WIRE)--Plains All American Pipeline, L.P. (NYSE: PAA) announced today that it has commenced, subject to market conditions, an underwritten public offering of 6,400,000 of its common units representing limited partner interests. The Partnership also intends to grant the underwriters a 30-day option to purchase up to 960,000 additional common units to cover over-allotments, if any.
The Partnership intends to use the net proceeds from the offering, including the proceeds from any exercise of the over-allotment option, to reduce outstanding borrowings under its credit facilities and for general partnership purposes. Amounts repaid under the Partnership’s credit facilities may be reborrowed to fund its ongoing capital program, potential future acquisitions, or for general partnership purposes.
Citi, BofA Merrill Lynch, J.P. Morgan, Morgan Stanley, UBS Investment Bank and Wells Fargo Securities will act as joint book-running managers of the offering.
When available, copies of the prospectus supplement and accompanying base prospectus relating to the offering may be obtained from the underwriters as follows:
Citigroup Global Markets Inc.
Brooklyn Army Terminal
Attention: Prospectus Delivery Dept.
140 58th Street, Brooklyn, NY 11220
Telephone: (800) 831-9146
BofA Merrill Lynch
4 World Financial Center
New York, New York 10080
Attn: Prospectus Department
J.P. Morgan Securities LLC
via Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, New York 11717
Telephone: (866) 803-9204
Morgan Stanley & Co. Incorporated
Attn: Prospectus Dept.
180 Varick Street, 2nd Floor
New York, NY 10014
Tel: (866) 718-1649
UBS Securities LLC
Attention: Prospectus Dept.
299 Park Avenue
New York, NY 10171
Telephone: (888) 827-7275
Wells Fargo Securities, LLC
Attn: Equity Syndicate Dept.
375 Park Avenue
New York, New York 10152
Phone: (800) 326-5897
The common units will be offered and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only by means of a prospectus and related prospectus supplement.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties. These risks and uncertainties include, among other things, the stability of the capital markets and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of crude oil and other petroleum-related products discussed in the Partnership's filings with the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is a publicly-traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its general partner interest and majority equity ownership position in PAA Natural Gas Storage, L.P. (NYSE: PNG), PAA is also engaged in the development and operation of natural gas storage facilities. PAA is headquartered in Houston, Texas.

Wednesday, March 2, 2011

Natural Gas Pipelines Under Review

The National Transportation Safety Board began on Tuesday three days of hearings in Washington, DC to examine causes of last fall’s pipeline rupture in San Bruno. The natural gas explosion and fire killed eight people and destroyed dozens of homes.
National Transportation Safety Board Chair Deborah Hersman set the scene in San Bruno, a city south of San Francisco near the SFO airport: "On Sept. 9, 2010," she said, "a little after 6 p.m., as commuters were arriving home from work and families were sitting down at the dinner table, a 30-inch-diameter natural gas pipeline ruptured."
The explosion carved out a giant crater, and blew a 28-foot chunk of pipe a football field away. NTSB investigator Ravi Chhatre said a pair of off-duty employees reported the fire to Pacific Gas and Electric.
"The dispatch center dispatched an on-duty employee to investigate the reported explosion," said Chhatre.
But that employee wasn’t qualified to shut off the pipeline. It took PG&E an hour and a half to stop the flow of natural gas that was fueling the fire.
Much of the hearing focused on why the pipeline didn’t have a remote shut-off valve. NTSB investigator Robert Trainor pressed PG&E consulting engineer Chih-Hung Lee about a policy memo he wrote five years ago. He asked Lee to read from a federal report that concludes the longer that natural gas flows, the more potential there is for damage.
"The degree of disruption in the heavily populated or commercial area would be in direct proportion to the duration of the fire," Lee read.
Trainer said he wanted to contrast that conclusion with Lee's memo which states, "the duration of the flame has little or nothing to do with human safety or property damage."
Lee said he based his memo on pipeline industry research that said most of the damage occurs in the first 30 seconds after a gas line rupture. But the San Bruno blast touched off a fire that firefighters couldn’t stop until the gas was shut off manually 90 minutes after the blast. PG&E officials testified that had there been a remote shut-off valve in place, the gas could have been turned off in 20 minutes.
Democratic Congresswoman Jackie Speier has introduced a bill that requires pipeline operators to install automatic or remote shut-off valves. Speier’s district includes San Bruno.
"I am frankly sick and tired of a scenario on Capitol Hill," she said, "where we hold hearings over and over again and then don’t do anything. I want to see something done this time."
The House hasn’t yet scheduled a committee hearing for Speier’s bill.

On the second day of the NTSB’s San Bruno hearings, the board will hear from San Bruno’s fire chief and from members of the California Public Utilities Commission.

Sunday, February 27, 2011

Russia Sending Natural Gas to Europe

PRLog – Feb 25, 2011 – Historically, Europe has been one of the leading consumers of natural gas, though in recent years, the natural gas consumption has been declining. Decline in consumption has been a result of economic slowdown, due to recession and a conscious attempt by European Union to cut it natural gas consumption, of which a substantial amount comes from Russia. And worrying part remains that there are very few alternatives for Europe to Russian gas supplies. According to IEA’s estimates, the current European energy imports of 50% are projected to rise to 70% by 2030. This means, the current share of Russian supply, which makes almost half of Europe’s natural gas imports, is likely to increase over next two decades. Synergyst’s “Future of European Natural Gas Market (2011-2015)” explores the current situation of natural gas imports in Europe, role of Russia in those supplies and an analysis of alternatives to Russian supplies. 

Report Coverage and Highlights

- Report discusses the overall economic condition in Europe and analyzes Current electricity production, consumption and trade Trends and projects future economic growth and energy demand and supply.

- European gas market is evaluated in detail with Current demand and supply scenario and future projection for the same.

- Importance of Russian gas supply is analyzed with emphasis on European imports and estimates for future Russian production and export. Role of Gazprom is also looked into in detail.

- Natural gas demand and supply Trends and import dependency are examined for leading European Countries and future recommendations are presented. Countries analyzed include Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Spain and United Kingdom.

- Also discussed is the situation in Countries that are highly dependent on Russian Natural gas supplies. These include Austria, Bulgaria, Estonia, Finland, Greece, Latvia, Lithuania, Poland, Romania and Slovakia.

- Issues like monopolistic attitude of Gazprom, geopolitical disturbance in the region and rising costs are discussed in detail to highlight the Importance of Europe looking elsewhere for gas supplies.

- In-depth evaluation of alternative supply options is presented along with our recommendations for future choices. 

Wednesday, February 23, 2011

Natural Gas Safety Tips

PRLog (Press Release) – Feb 18, 2011 – Natural Gas Safety Awareness Can Mean The Difference Between Life and Death 
A leading energy company reminds people safety is key following deadly Pennsylvania gas explosion

Stamford, CT – February 18, 2011 – The cause of the natural gas explosion that rocked a Pennsylvania neighborhood and left five people dead last week is still unclear.  The investigation is currently focused on the aging cast-iron gas main that services the Allentown, Pennsylvania neighborhood.

According to a leading independent energy provider, regardless of the cause of this particular tragedy, the accident serves as an opportunity for everyone to review the importance of natural gas safety.

«This terrible tragedy in Pennsylvania illustrates just how deadly natural gas can be,» says Jeffrey Mayer, President and CEO of MXenergy, one of the nation's fastest growing independent energy providers. «Natural gas provides an important and invaluable service but it is equally critical that we treat it with respect and always use the upmost care when dealing with it in any capacity.»

Natural Gas Safety Tips

Use Your Nose: If you smell even the slightest odor of gas leave the area immediately and call your service provider or 911 from a remote location.  Do not waste time or use anything that can cause a spark, such as a cell phone or even a garage door opener

Regular Inspections:  Have all gas appliances, furnaces, chimneys, vents and gas lines regularly inspected and maintained by a certified professional

Keep Areas Clear:  Keep all areas surrounding appliances and equipment unblocked to allow for clear airflow

Look for the Blue Flame:  Check all pilot lights and burners for a steady blue flame.  The only exception is gas fireplaces which sometimes have a yellow flame

Dig Safely:  Always call your local provider before you begin digging to avoid hitting an underground pipe and causing a leak

Store Properly:  Never set flammable material close to any gas appliance or equipment

Properly Maintain Your Meter:  Don't allow frozen rain or ice to build up on your meter.  Use a broom (never a shovel) to clear ice and snow

Signs Of Trouble

Listen:  A hissing noise near a pipeline or building is cause for concern.  Immediately call your local service provider

Look:  Dead or distressed vegetation above a gas main is another cause for concern and should be reported

Sniff:  Any hint of natural gas odor inside or outdoors is cause for immediate action.  Quickly leave the area and then call your provider or 911 for help

«Safety and awareness are of critical importance,» continues Mayer.  «While there is no evidence of homeowner negligence in the Pennsylvania explosion, it still is a reminder to us all of the awesome power of natural gas and the necessity for constant caution and respect.»

Pennsylvania investigators report no calls of problems or odor prior to the explosion and plan to send cameras through the main to look for cracks and will perform pressure tests on the service lines.

# # #

MXenergy is one of the fastest growing retail natural gas and electricity suppliers in North America, serving approximately 500,000 customers in 41 utility territories in the United States and Canada. For over 11 years, the company has provided millions of customers with a choice in how they purchase energy to run their homes and businesses. Founded in 1999 to provide natural gas and electricity to consumers in deregulated energy markets, MXenergy helps residential customers and small business owners control their energy bills by providing both fixed and variable rate plans. MXenergy is committed to best practices in environmental conservation, supporting local communities through various outreach programs and is a member of the Chicago Climate Exchange. For more information MXenergy please visit www.mxenergy.com.

Sunday, February 20, 2011

European Gas Group Met in January

PRLog (Press Release) – Jan 13, 2011 – There are high expectations in the gas industry for a lively European Gas Conference when all the major role players in the great pipeline debate take to the stage in Vienna from 26-28 January.

The Great European Pipeline Debate
The attendance of the European Gas Conference by the heads and high-level supporters of the five major European pipeline projects, including Nabucco, South Stream and White Stream, promises some fascinating debate during the event.  

South Stream is a proposed gas pipeline to transport Russian natural gas to the Black Sea to Bulgaria and further to Italy and Austria.  It is seen as a rival to the planned Nabucco pipeline which will run from Turkey to Austria and is supported by the EU as an attempt to lessen European dependence on Russian energy.  White Stream (also known as the Georgia-Ukraine-EU gas pipeline) is a proposed pipeline project to transport natural gas from the Caspian region to Romania and Ukraine with further supplies to Central Europe.

Report back on latest developments
Austrian Economy minister Reinhold Mittlerlehner, the leading oil and gas corporation, OMV, and former German Foreign minister Joschka Fischer are also amongst the distinguished panel of speakers at the event which will bring together some 300 stakeholders from the European gas industry.  

The Managing Director of Nabucco Gas Pipeline International, Reinhard Mitschek, will report back on the latest developments in the project, Joschka Fischer is a committed Nabucco supporter while OMV is a partner in the pipeline.  

Representing South Stream is the CEO, Marcel Kramer, who will also present an update while the head of the Russian Gas Society on energy and gas co-operation and State Duma deputy chairman, Valery Yazev, is a well-known proponent of the Russian pipeline project.  A significant delegation from the Russian gas giant, Gazprom, is attending as well as a high-level representative from the Turkish Energy Ministry.

Robert Pirani, the chairman of the White Stream project will also be there and along with the other major European pipelines, TAP and ITGI, will present the latest project developments during the European Gas Conference.

Other topics that will be addressed include:
  How long the decoupling of oil and gas prices will last, and how it will affect the industry
  North, East, South, West and Central European cooperation to ensure security of  
  The facilitation of an open European gas market
  Global context: how developments in Middle Eastern, US, and North African gas will impact the European market 

Friday, February 18, 2011

Oil and Natural Gas Assets Acquired by DeeThree

D Three Technology is not affiliated with DeeThree

DeeThree Exploration Ltd. ("DeeThree" or the "Company") (TSX:DTX) is pleased to announce that it has entered into a definitive purchase and sale agreement (the "Agreement") with Fairborne Energy Ltd. and Fairborne Pivotal Production Partnership (the "Vendor") pursuant to which DeeThree will, subject to certain conditions, acquire producing oil and natural gas assets (the "Assets") for cash consideration of $125 million (the "Acquisition"), subject to customary closing adjustments. The Acquisition is expected to close on or about March 22, 2011 with an effective date of January 1, 2011. The closing of the Acquisition is subject to certain conditions and the receipt of all required regulatory approvals, including the approval of the Toronto Stock Exchange.
DeeThree will finance the Acquisition through a combination of the net proceeds of a $100 million 'bought deal' short form prospectus subscription receipt offering and its existing working capital. In addition, the 'bought deal' prospectus offering will also include the issuance of common shares on a "flow-through" basis under the Income Tax Act (Canada) for additional proceeds of $15 million. A description of the prospectus offering is provided below under "Financing". 
Summary of the Acquisition
Through the Acquisition, DeeThree is acquiring approximately 1,830 boe/d (2010 exit production) of primarily high working interest, operated oil, natural gas and natural gas liquids production and reserves principally situated in Brazeau, West Pembina and the Peace River Arch area of northern Alberta.
The Assets have the following material attributes.
  • Low-decline production of approximately 1,830 boe/d of which 40% is light crude oil and natural gas liquids;
  • High working interest, operated light oil resource style play with production from the Belly River formation over a contiguous land base in the Brazeau area with associated facilities and infrastructure ownership;
  • Various oil and gas producing assets in the Peace River Arch consisting of stable diversified production from the Montney, Charlie Lake, Bluesky, Spirit River Group and Doe Creek formations with ownership in associated facilities and infrastructure including a gas processing plant;
  • Proved plus Probable Reserves – 5.416 mmboe 1;
  • Reserve life index of 8.1 years on proved plus probable reserves as of December 31, 2009 and based on current production;
  • Undeveloped land of approximately 32,000 net acres which DeeThree estimates to have a value of approximately $7 million;
  • Numerous identified low-risk vertical and horizontal drilling locations on the acquired lands.
1 The aforementioned reserves information is based on an independent engineering evaluation report prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2009. 
Transaction Metrics
DeeThree will significantly increase its oil and natural gas liquids weighting upon completion of the Acquisition to approximately 40% of proved plus probable reserves. Based on the $125 million purchase price, net of $7 million of undeveloped land value, the key transaction metrics are:
  • $64,480 per boe/d of production;
  • $21.78 per proved plus probable boe of reserves; and
  • The acquisition is accretive to DeeThree on all key metrics.
Strategic Rationale
DeeThree believes there are numerous anticipated benefits and upside potential associated with the Acquisition, as described below:
  • The Brazeau property which forms part of the Assets complements the Company's emerging Alberta Bakken light oil play providing an additional "high-quality" resource play with several operational synergies;
  • Internal reserve estimates indicate considerable upside associated with the Assets beyond current reserves bookings, particularly in a light oil resource play at Brazeau where the Company estimates significant unrecovered reserves;
  • The Assets will provide the Company with a more balanced and diverse production base resulting in 2011 pro forma exit of approximately 50% crude oil and NGLs;
  • With the combination of increased cash flow from the acquired Assets along with the anticipated increase to the Company's credit facility, the Company can comfortably fund its aggressive program to explore and develop the Alberta Bakken;
  • DeeThree is seeking and is confident that it will obtain an increase of $30 million to its existing revolving credit facility to a total of $40 million. The new credit facility is subject to credit approval and satisfaction of conditions that are typical of transactions of this nature, including the closing of the Acquisition. The planned incremental borrowing capacity associated with the Assets will help DeeThree retain its strong balance sheet and financial flexibility;
  • The Peace River Arch component of the asset package provides DeeThree with access to a production and land base in which the Company's technical team has extensive past experience and success in exploring and developing. 
DeeThree has concurrently entered into an agreement with a syndicate of underwriters co-led by Macquarie Capital Markets Canada Ltd. and Casimir Capital Ltd. pursuant to which DeeThree will issue 23,300,000 subscription receipts ("Subscription Receipts") at a price of $4.30 per Subscription Receipt, by way of a 'bought deal' short form prospectus offering for gross proceeds of $100,190,000 and 3,000,000 common shares ("Flow-Through Shares") issued on a "flow-through" basis under the Income Tax Act (Canada) at the price of $5.15 per share for gross proceeds of $15,450,000, representing aggregate gross proceeds of $115,640,000. In addition, DeeThree has granted the underwriters a 15% an over-allotment option (the "Option") to purchase, on the same terms, up to an additional 3,495,000 Subscription Receipts for additional gross proceeds of up to $15,028,500 if the Option is exercised in full. This Option is exercisable, in whole or in part, by the underwriters at any time up to 30 days following the closing of the offering to cover the Underwriters' over-allotments, if any. The maximum gross proceeds raised under the offering will be $130,668,500 should this Option be exercised in full. Closing of the offering is anticipated to occur on or before March 11, 2011, and is subject to the receipt of applicable regulatory approvals, including approval of the TSX.
The proceeds of the Subscription Receipt offering will be used to partially fund the Acquisition and the proceeds of the Flow-Through Share offering will be used to fund DeeThree's ongoing exploration activities on its newly acquired properties and also its Lethbridge properties.
Upon completion of this Acquisition, DeeThree's 2011 capital expenditure program is anticipated to be increased from the previously announced $32 million to $41 million including the planned drilling of seven Bakken locations and an additional seven light oil horizontal locations on the anticipated acquired Property. With the additional cash flow from the acquired property and the anticipated increase in the Company's credit facility, DeeThree is well positioned to fund its 2011 capital expenditure program.
Bakken Update
In late 2010, the Company spud its first vertical Bakken stratigraphic test well on its Lethbridge property. The well was successfully drilled to the planned vertical depth with the target section cored and retrieved. After reviewing encouraging results from the core data, DeeThree proceeded with a horizontal leg. As of today's date, DeeThree has successfully drilled its planned horizontal leg and with continued positive results, installed a 15-stage frac assembly. The well is currently awaiting fracture stimulation operations. 
The Company has two more licensed stratigraphic vertical wells that will be cored; testing additional land blocks and is currently in various stages of acquiring several multi-well pad sites. In total DeeThree plans to drill another seven Bakken locations on its Lethbridge property throughout 2011 with one rig being utilized consistently throughout the year with the possibility of engaging a second rig depending on results.
DeeThree's Advisors
Macquarie Capital Markets Canada Ltd. acted as financial advisor and Casimir Capital Ltd. acted as strategic advisor to DeeThree with respect to the Acquisition.
For further information, please contact Martin Cheyne, President and Chief Executive Officer of DeeThree Exploration Ltd., by telephone at (403) 263-9130.
Reader Advisory
Forward-Looking Statements. Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to: operational decisions and the timing thereof, development and exploration plans and the timing thereof; future production level; timing for completion of the Acquisition and the Prospectus financing and the anticipated benefits resulting from the transactions described in this press release. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect.
Although DeeThree believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because DeeThree can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: field production rates and decline rates; the ability of DeeThree to complete the Acquisition and the other transactions described in this press release and, once completed, to realize the anticipated benefits of the Acquisition and other transactions; the timely receipt of any required regulatory approvals; the ability of DeeThree to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; DeeThree's ability to operate the properties in a safe, efficient and effective manner; the ability of DeeThree to obtain financing on acceptable terms; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of DeeThree to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. DeeThree undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. 
Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by DeeThree and described in the forward-looking information. The material risk factors affecting DeeThree and its business are contained in DeeThree's Annual Information Form which is available under DeeThree's issuer profile on SEDAR atwww.sedar.com.
The reader is cautioned not to place undue reliance on this forward-looking information.
BOE Presentation. References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirement. This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
For more information, please contact
DeeThree Exploration Ltd.
Martin Cheyne
President and Chief Executive Officer
(403) 263-9130

Thursday, February 17, 2011

Munn from Mack Energy Says Slow Down the Talk

Amid the frenzy of shale gas drilling that has extended from the Barnett Shale to the Marcellus in the northeast, one Midland expert is holding a stop sign.
"My pitch is to slow down," said Bill Munn, manager of gas marketing with Mack Energy of his recent talk with members of the Natural Gas Society of the Permian Basin.
"The shales, no one knows what they are yet," he continued. "The facts have nowhere near caught up with the hype. The facts may support the hype or they may not; we're getting way ahead of ourselves."
Munn compared the hype to the dot-com and real estate bubbles or even electric deregulation in Texas where "we were told under deregulation our electric bills would be real cheap."
He stressed that the gas reserves operators active in the shale plays promise may well exist, "but this is still bad rock," and producing that gas will be difficult and expensive. The operators promoting those reserves are not doing anything wrong, he added. But, he pointed out, everyone has their own agenda.
"I'm not an expert," said the veteran gas marketer. "I'm not a geologist, I don't have degrees. But I have some facts and I don't believe we have all this gas that will be coming out of the ground. I don't think it's economical," and he is skeptical production could rise to 30 billion cubic feet.
Again, he said, he is urging patience.
"If I were these companies, I'd put the best spin on it; that's not wrong. But the public is not seeing a lot of the facts. We don't know if the depletion rate is rapid or if the rate will last forever. When I see phrases like 'game changer' or 'new world,' when I hear those terms I get cautious. We need that gas and it's there, we just don't know what it will cost. In an area that covers 100 miles, that shale isn't uniform. This isn't a hoax but we need to slow down and make sure we know what the production will be and what it will cost."
What is not a part of the discussion about the nation's natural gas supplies, Munn added, is the sharp decline in conventional gas production, which he said has sunk to 6 billion cubic feet a day since he began marketing gas.