U.S. BRIEFS

EXPLORATION

GLOBAL NATURAL RESOURCES INC., Houston, acquired from Chuska Energy Co. a 10% participating interest in the Navajo/Paradox basin exploration joint venture for $5 million. Global agreed to carry Chuska for the next $7.5 million in capital spending allocable to Chuska's remaining 40% interest.

DRILLING-PRODUCTION

SERVICE FRACTURING CO., Pampa, Tex., bought 325 stripper oil and gas wells in West Panhandle field of the Texas Panhandle for $2 million from an unidentified independent. Service expects production to increase from 3,800 bbl/month of oil upon completion of about $500,000 in remedial work by Sept. 30. Service reworked 49 of 181 oil wells acquired Apr. 1, 1989, boosting production to 6,000 bbl/month from 2,225 bbl/month on acquisition. More remedial work is planned. Service expects 36 month payout of purchase price and workovers.

ENSIGN OIL & GAS INC., Denver, bought from Texas Oil & Gas Corp. interests in 43 gas wells and a 5 MMcfd gas processing plant and gathering system serving Stonington, Vilas, and Walsh Pennsylvanian Tonkawa gas fields in Baca County, Colo.

FLOYD OIL CO., Houston, acquired on behalf of affiliates from Chevron U.S.A. Inc. an average 87% working interest in 27 gas wells and an average 7% royalty interest in 69 gas wells in San Juan and Rio Arriba counties, N.M., for $4.5 million, Floyd will operate 22 of the wells, all of which were acquired Feb. 9, 1990, retroactive to Aug. 1, 1989.

BP EXPLORATION WESTERN HEMISPHERE let contracts to Gulf Marine Fabricators for fabrication and Offshore Structures Inc., Houston, for design engineering certification of Platform A to be installed in 1,032 ft of water on Mississippi Canyon Block 109. The $250 million project is to produce 22,000 b/d of oil and 25 MMcfd of gas starting in first quarter 1992 (OGJ, Dec. 18, 1989, Newsletter).

BERRY PETROLEUM CO., Taft, Calif., will acquire West Montalvo field, Ventura County, Calif., from Chevron Corp. for an undisclosed sum. The six leases, including two state tracts that extend offshore, contain 66 wells with 1.1 million bbl of reserves. They produce 530 b/d of oil from 21 active wells.

PSI INC. let a turnkey contract to Engicon Inc., Houston, for design, fabrication, and installation of a 2,200 b/d oil and 30 MMcfd gas production system for a four pile platform on Ship Shoal Block 37 in the Gulf of Mexico. The system is to be installed by mid-May for June start-up of the platform.

PROCESSING

CHAMPLIN REFINING CO., Corpus Christi, let contract to Setpoint Inc., Houston, to install a DEC VAX process computer running Setpoint's Setcon data acquisition and process control package in East Plant 11 complex at Champlin's 150,000 b/d Corpus Christi refinery. Completion of the project is expected late this year.

QUAKER STATE CORP. and the Oil, Chemical & Atomic Workers union agreed to a 3 year labor contract covering the Congo plant at Newell, W.Va. Terms were not disclosed.

AGRICULTURAL MINERALS CORP. completed the $230 million purchase of Freeport-McMoRan Resource Partners Lp's nitrogen fertilizer assets and assumption of certain liabilities.

TRANSPORTATION

SOUTHERN NATURAL GAS CO. proposed, subject to receiving transport commitments, to construct in 1991 the Lake St. John Connection, an 80 mile, 20 in., 175 MMcfd pipeline from Winn Parish, La., to the company's south system in Tensas Parish near Lake St. John field. The system will improve Sonat's ability to transport gas reserves being developed in North Louisiana and East Texas.

PHILLIPS 66 NATURAL GAS CO. will install three 580 hp compressors and a 15 mile, 8 in. discharge line to connect Parkway field, Eddy County, N.M., to a high pressure pipeline supplying gas to the company's Lee gas processing plant in Lea County, N.M. The $2.2 million in facilities will accommodate volumes developing in the area and reduce operating pressure. The booster, 30 miles southeast of Artesia, will permit transport of 10 MMcfd from the field.

ASSOCIATED NATURAL GAS INC., Denver, plans to connect and expand gas gathering systems in Pickens, Fayette, and Lamar counties, Ala., acquired from AD-AM Gas Co. and Galaxy Energies Inc. ANG will boost capacity to 125 MMcfd to accommodate expected coalbed methane development, including a 24,000 acre project on which ANG has a gathering agreement. The systems, gathering 30 MMcfd of gas from conventional reservoirs, connect with Tennessee Gas Pipeline Co. and Southern Natural Gas Co.

ROCKLAND PIPELINE CO., Houston, a subsidiary of Electrafina of Belgium, paid $12.15 million for Rockland Pipeline System, a group of gas gathering, transmission, and compression facilities in Texas and Colorado. Seller was not disclosed. The largest systems are in the Sonora area and Irion Sterling counties of Texas.

SOUTHLAND ROYALTY CO. and two affiliates of Public Service Co. of New Mexico (PNM) settled litigation involving three intrastate gas purchase contracts in the San Juan basin of New Mexico. PNM affiliates will pay Southland $54.5 million. Southland will release all claims under three San Juan basin interstate contracts with PNM's Sunterra Gas Gathering Co.

GAS RESEARCH INSTITUTE and American Gas Association completed a nondestructive evaluation unit at Battelle Memorial Laboratories, Columbus, for detection and characterization of pipeline defects. It is part of an $11 million program that by 1992-93 will include two flow loops to test inspection technologies under simulated pipeline conditions.

COMPANIES

INTERNAL REVENUE SERVICE dropped $327 million of $450 million in claims against McDermott International Inc. relating to transactions in which the company became the parent of the McDermott group and McDermott Inc., the former group parent, became a subsidiary in 1983. IRS also dropped claims in about 900 tax court cases that shareholders are subject to tax on dividend income due to the restructuring transactions. IRS and McDermott are discussing an overall agreement that might be subject to review by the joint committee of Congress on taxation.

A QUAKER STATE COAL CO. subsidiary completed the purchase of Youghiogheny & Ohio Coal Co. from Panhandle Eastern Corp. for $18 million. Y&O has about 500 million tons of reserves in Ohio, Pennsylvania, and West Virginia.

CONTINENTAL NATURAL GAS INC., Tulsa, will buy El Paso Natural Gas Co.'s 40 MMcfd gas processing plant and 86 mile gathering system in Beaver County, Okla.