U.S. BRIEFS

May 28, 1990
DEPARTMENT OF ENERGY reached a proposed $3.35 million settlement with Kern Oil & Refining Co. and Larry Delpit, a former Kern owner, to resolve claims that Kern sold price controlled crude to resellers and bought price exempt crude at below market discounts during October 1979-January 1991. Kern and Delpit did not admit any wrongdoing.

GOVERNMENT

DEPARTMENT OF ENERGY reached a proposed $3.35 million settlement with Kern Oil & Refining Co. and Larry Delpit, a former Kern owner, to resolve claims that Kern sold price controlled crude to resellers and bought price exempt crude at below market discounts during October 1979-January 1991. Kern and Delpit did not admit any wrongdoing.

DRILLING-PRODUCTION

CONOCO INC. plans four wells to develop the upper Cretaceous Schrader Bluff oil pool in Milne Point Unit on Alaska's North Slope. Tests in 1989 showed the shallow sands prospect is commercial. Conoco expects the development to help Milne Point oil flow increase to 33,000 b/d. Milne Point production last fall was expected to reach 30,000 b/d by yearend 1989 (OGJ, Sept. 25, 1989, p. 25).

DOW CHEMICAL CO. agreed to relieve Reading & Bates Corp., Houston, of obligations relating to the lease of the Sovereign Explorer semisubmersible drilling rig and other debts in exchange for some Reading & Bates stock, cash, and assets.

OKLAHOMA will increase its petroleum excise tax to 0.095% from 0.085%, effective Oct. 1 to fund the plugging of abandoned and orphaned wells.

ENERGY SERVICE CO. INC. affiliate NGP No. 1 LP agreed to purchase all 31.3% of the debt and equity securities of Penrod Drilling Corp. held by four remaining members of the Penrod bank group (OGJ, Apr. 30, p. 40).

MITCHELL ENERGY & DEVELOPMENT CORP., Woodlands, Tex., bought interests in 44 producing wells and about 7,000 acres of leases in Wise and Jack counties, Tex., from Oryx Energy Co., Dallas, for $7.5 million.

ASHLAND EXPLORATION INC. agreed to buy oil and gas properties in the Appalachian area, with average gas production of about 16 MMcfd, from OXY USA Inc. for about $107 million.

EXXON CO. USA let contract for about $27 million to McDermott Marine Construction, New Orleans, to build and install an 18 slot drilling/production platform off Louisiana in Mississippi Canyon Block 397.

DEVON ENERGY CORP., Oklahoma City, let a 10 year contract to Meridian Oil Gathering Inc. to gather gas and remove water and carbon dioxide produced from coal seam wells in Northeast Blanco Unit, San Juan County, N.M.

VARCO INTERNATIONAL INC., Orange, Calif., acquired the assets of Cooper Industries Inc.'s Martin-Decker operating unit, Cedar Park, Tex., for about $30 million.

YELLOWSTONE RESOURCES INC., Denver, will acquire 80% of Merit-Group II Partnership, including interests in 224 oil and gas wells in 10 states, for $20 million in cash and stock.

MARKETING

PHILLIPS 66 CO. plans to stop selling leaded regular gasoline from its terminal in Salt Lake City.

REFINING

LOUISIANA'S Department of Environmental Quality authorized American International Petroleum Corp., New York, to begin construction of a 16,500 b/d vacuum distillation unit at its 30,000 b/d Lake Charles, La., refinery.

INDIAN REFINING LP completed a $155 million financing package to reopen by Sept. 30 the 60, 000 b/d former Texaco refinery at Lawrenceville, Ill., which closed in 1985 (OGJ, Jan. 9, 1989, p. 23).

TRANSPORTATION

CMS GAS TRANSMISSION CO., Dearborn, Mich., filed with the Michigan Public Service Commission for approval to lay a 25 mile, $6.5 million gas pipeline in Otsego, Crawford, and Kalkaska counties, Mich.

NATURAL GAS PIPELINE CO. OF AMERICA asked the Federal Energy Regulatory Commission for a permit to expand capacity on its A/G pipeline by 300 MMcfd, to 650 MMcfd on the Texas segment and 800 MMcfd on the Texoma segment (see map, OGJ, Apr. 30, p. 33).

WASHINGTON GAS LIGHT CO., Washington, D.C., agreed to buy as much as 33 MMcfd of gas from Valero Natural Gas Partners LP, San Antonio, for 10 years.

ENDEVCO INC., Dallas, completed $31 million in financing for a project to convert LPG salt dome storage near Hattiesburg, Miss., to 2.2 bcf capacity gas storage.

UNOCAL CORP. agreed to pay a $175,000 penalty to Alaska in connection with a charge that it operated three tankers in Alaskan waters without oil spill response plans.

COURTS

A U.S. DISTRICT COURT in Pecos, Tex., tentatively granted summary judgment that Texas Utilities Fuel Co., Dallas, take nothing on its claim against Forest Oil Corp., Denver, for alleged overpayments of $26 million arising from sales of gas by Forest to Tufco from 1983 to the present, clarifying an earlier Oil & Gas Journal report (OGJ, Apr. 9, p. 38). The court also tentatively ruled that Forest take nothing in its counterclaim against Tufco for alleged underpayments of more than $2 million. No final judgment has been entered in the suit, originally filed by Forest.

COGENERATION

TENASKA III TEXAS PARTNERS, Omaha, will dedicate its 220,000 kw Paris, Tex., cogeneration plant, which will burn as much as 45 MMcfd of gas to supply electricity to Texas Utilities Electric Co. and 150,000 lb/hr of steam to Campbell Soup Co.'s Paris plant.

EXPLORATION

MINERALS MANAGEMENT SERVICE released a draft environmental impact statement for its proposed Sale 107 in the Navarin basin in the Bering Sea off western Alaska. The sale is to offer for lease 5,036 blocks covering about 11.4 million acres 30-225 miles off St. Matthew Island in 230-7,874 ft of water. It is tentatively scheduled for mid-1991.

SEAGULL ENERGY CORP., Houston, cut 52 ft of net pay in five zones in its 2 OCS G-4186 gas discovery in Galveston Area Block 424 in 100 ft of water off Texas. It flowed 16.6 MMcfd from pay at 7,386-8,162 ft.

GLOBAL NATURAL RESOURCES INC., Houston, tested its 1-25 McDonnell discovery in Livingston County, Mich., at 6.7 MMcfd of gas and 33 b/d of condensate through a 29/64 in. choke with 1,435 psi flowing tubing pressure from Silurian Niagaran reef at 4,084 ft.

EXXON CO. USA will combine its eastern and western exploration divisions into one onshore division in Houston and reduce work forces by 100 each in Denver and Midland, Tex., by late summer.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.