U.S. BRIEFS

ACQUISITIONS

UTILICORP UNITED'S PSI Inc. unit, Dallas, signed a letter of intent to acquire the Elk City gas gathering and processing system in western Oklahoma from Valero Hydrocarbons LP for about $30 million. The 85 mile pipeline crosses three counties in the Anadarko basin and moves about 75 MMcfd. Processing facilities extract about 150,000 gal/day of liquid hydrocarbons and provide 65 MMcfd to various interstate pipelines.

EXPLORATION

BENTON OIL & GAS CO., Ventura, Calif., 2-1 Benton Herzog field discovery in Sacramento County, Calif., flowed 870 Mcfd of gas through an 8/64 in. choke with 2,900 psi flowing tubing pressure from Upper Cretaceous Winters perforations at 7,814-19 ft. The well cut about 34 ft of pay in drilling to 8,400 ft.

LOUISIANA OFFSHORE VENTURES was formed by Crossroads Oil Co., Salt Lake City, and Houston Energy & Development as a 5050 venture to explore and develop Gulf of Mexico leases in association with Exxon Co. U.S.A. The 2 year venture contract covers about 8,437 sq miles off Louisiana in water depths to 300 ft. It gives Louisiana Offshore Ventures access to Exxon seismic and geologic data in the area.

HONDO OIL & GAS CO. Roswell, N.M., 57 Pipeline discovery well flowed 503 b/d of 43 gravity oil through a 24/64 in. choke from Cambro-Ordovician Ellenberger in Irion County, Tex. Hondo holds a 100% working interest in the well and in several thousand acres on the surrounding Scottish Rite block.

COMPANIES

ARKLA EXPLORATION CO., Shreveport, increased its 1990 exploration and production budget to $70 from $55 million. Arkla expects to drill 20 wildcats in second half 1990.

TRANSPORTATION

CITIZENS-VICTORIA GAS CO. was formed as a joint venture of Victoria Gas Corp., Dallas, and Citizens Gas Supply Corp., Boston. Citizens acquired 50% of Victoria's South Texas gathering systems tied into Tennessee Gas Pipeline.

MV JUPITER oil tanker burst into flames as it was unloading 54,000 bbl of gasoline in the Saginaw River near Bay City, Mich., causing its six fuel compartments to explode. The 392 ft vessel is owned by Ashland Oil Inc. unit Cleveland Tankers Inc., Cleveland.

ENCO GAS GATHERING CO., Houston, a subsidiary of Exxon Corp., is acquiring right-of-way for a gas gathering system about 25 miles east-southeast of McAlester in Latimer County, Okla. The system will initially consist of 4-14 in. pipe, and will gather, dehydrate, and deliver as much as 200 MMcfd to Arkla's 42 in. AC line. Construction is to start about Oct. 1 , with start up expected by Nov. 1.

METALLGESELLSCHAFT CORP., Houston, acquired a "substantial" interest in Bishop Pipeline Corp., also of Houston, as part of plans by parent Metallgesellschaft AG, Frankfurt, to enter U.S. gas marketing. Details of the purchase were not disclosed.

QUESTAR CORP., Salt Lake City, started up its 81 mile, 20 in. Main Line 80 in Utah, which runs from south of Vernal to south of Rock Springs, near the Wyoming border. The $22 million system, with capacity of about 86 MMcfd, links Questar's Craig, Colo.-Wasatch front, Utah, line with its Rifle, Colo.-Payson, Utah, line.

U.S. SENS. Bennett Johnston (D-La.) and James McClure (R-Idaho) filed a bill to repeal a Mineral Leasing Act provision that requires the Interior Department to give Congress 60 days' notice before granting a right-of-way across federal land for a 24 in. or larger pipeline.

DRILLING-PRODUCTION

ARCO agreed to pay Alaska $287 million, resolving all major claims raised by the state in a 1977 lawsuit over royalties from Alaskan North Slope oil production. The accord also provides a formula for calculating future oil royalties on most of ARCO's North Slope leases.

ALTA ENERGY CORP., Midland, Tex., began an $8 million development drilling program on about 3,000 acres in Grayburg-Jackson field, Eddy County, N.M. Alta plans to drill 22 wells and begin waterflood operations by Feb. 28, 1991. The first well has been completed and produced at a rate of 70 b/d of oil during the first month. Alta also paid $1 million for interests in two gas wells on the Gulf Coast.

DIAMOND M HOLDING CORP., Houston, agreed to pay $14.9 million for 33 Penrod Drilling Corp. land drilling rigs in seven states from Energy Service Co. Inc., Dallas, and R.D. Smith & Co. Inc., New York City.

TEX-HEX CORP., Houston, completed a Pearsall field well with a horizontal displacement of 4,400 ft in Cretaceous Austin chalk. The 4 Lane, in LaSalle County, flowed 2,050 b/d of oil and 920 Mcfd of gas. The company's 5 Dickson, in Frio County, flowed 385 b/d of oil, 240 Mcfd of gas, and 262 b/d of water. Its 5R Brown A is awaiting potential test. The wells are on acreage TEX-HEX parent Allegheny & Western Energy Corp., Charleston, W.Va., acquired from Tipperary Oil & Gas Co. in November 1989.

EXXON CO. U.S.A. is offering for sale 21 producing leases in Wyoming and Colorado. Offers are due Oct. 31, and effective sale date will be Jan. 1 , 1991.

PLAINS RESOURCES INC., Houston, posted minimum wellhead spot sale prices for October of $1.65/MMBTU for Midcontinent gas and $1.75/MMBTU for Gulf Coast gas.

ALTERNATE FUELS

GWF POWER SYSTEMS, Walnut Creek, Calif., started up the fourth of five 20,000 kw petroleum coke fired power plants in the San Francisco Bay area. The independent power projects, using circulating fluidized bed combustion technology developed by GWF affiliate Combustion Power Co., Menlo Park, Calif., cut sulfur dioxide and nitrogen oxide emissions by more than 90%. Three other such plants started up earlier this year, and the fifth is due on line by yearend (OGJ, May 14, p. 31).

PETROCHEMICALS

ARCO CHEMICAL CO. resumed full production of methyl tertiary butyl ether at its Channelview, Tex., plant. That restored 27,500 b/d of MTBE capacity lost July 5 when the plant was shut down after an explosion and fire in the utilities area killed 17 workers.

COGENERATION

O'BRIEN ENERGY SYSTEMS INC., Philadelphia, started up a 52,000 kw, $54 million cogeneration plant in Newark, N.J., and began selling electricity to Jersey Central Power & Light. O'Brien expects final acceptance tests soon.