GENERAL INTEREST — Quick Takes
API launches campaign to make energy a bigger issue
The American Petroleum Institute launched a nationwide campaign to get more people to vote for candidates in the 2012 election who support energy and economic growth. The campaign, "Vote 4 Energy," will encourage voters to make energy a bigger election issue, but not endorse specific office-seekers or parties, API Pres. Jack N. Gerard said at the association's annual State of American Energy luncheon. "It's not about any political party or candidate, but making energy a major part of the 2012 election discussion," he maintained. "We won't be picking sides or candidates. Energy should not be a partisan issue."
Gerard said recent surveys clearly show Americans are looking for consensus, "which has, unfortunately, become rare here in Washington. Without question, in this election year, what voters are saying is: Give us leadership. Give us leaders who share our vision of a strong and prosperous America, based on our ability to create and innovate. It's a vision that's shared by the men and women in the US oil and gas industry."
He said the vision is based on three main facts: The United States is energy-rich, with more potential than overseas suppliers. Oil, gas, and other energy businesses are tremendous economic contributors. And access to more domestic resources means greater national security.
"This year, an election year, presents the perfect opportunity to encourage that discussion, so we're launching a national initiative—'Vote 4 Energy'—that will help Americans understand what's at stake and why energy issues should figure prominently in their voting decisions," he explained.
The campaign will include social media to go beyond people API has reached already and target states such as Ohio, Pennsylvania, and Virginia where there's significant local interest in energy, Gerard said. He would not divulge how much this will cost, but said it would be a significant amount.
Sinopec to buy Devon interests for $2.2 billion
Devon Energy Corp. said it signed an agreement to sell one third of its interest in five new plays to Sinopec International Petroleum Exploration & Production Corp. (SIPC) for $2.2 billion.
Before the agreement, Devon had assembled 1.2 million net acres in the company's previously announced positions in the Tuscaloosa Marine shale, Niobrara, Mississippian, Ohio Utica shale, and the Michigan basin.
The companies have recently added acreage in the Ohio Utica shale, increasing their joint position in the play to 235,000 net acres.
SIPC also will reimburse Devon for drilling costs incurred prior to closing and acreage acquisition costs incurred subsequent to the effective date of the agreement.
SIPC will make a $900 million cash payment upon closing and $1.6 billion paid in the form of a drilling carry.
The drilling carry will fund 70% of Devon's capital requirements, which results in SIPC paying 80% of the overall development costs during the carry period.
Based on the current work plan, the company expects the entire $1.6 billion carry to be realized by yearend 2014. Through 2012, the companies expect to drill about 125 gross wells in the five plays.
Devon will serve as the operator and will have ultimate responsibility for the allocation of capital. The company is also responsible for commercially marketing all production from these plays into the North American market.
Williams completes spinoff of E&P business
Williams Cos., Tulsa, has completed separating the company's businesses into two stand-alone, publicly traded corporations.
The company's former exploration and production business, WPX Energy Inc., began trading on the New York Stock Exchange on Jan. 3.
The spinoff was completed with the Dec. 31, 2011, distribution of one share of WPX Energy common stock for every three shares of Williams common stock.
Williams became an infrastructure company, and many of its pipeline assets are held through the master limited partnership Williams Partners LP.
In Canada, Williams owns a midstream and domestic olefins production business that processes the off-gas created by the oil sands production into 14,000 b/d of an NGL/olefins mixture. Expansion to the olefins plant is under way and a Canadian NGL pipeline is under construction.
Separately, William also is expanding its Geismar ethylene plant in Louisiana that currently produces 1.35 billion lb/year.
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