U.S. BRIEFS

COMMODITIES

NEW YORK MERCANTILE EXCHANGE reduced futures contract minimum margins on crude oil to $2,000 from $3,000 for customers and to $1,500 from $2,100 for clearing members. It cut minimum margins on heating oil and unleaded gasoline to $2,500 from $4,000 for customers and to $2,000 from $3,000 for clearing members.

TRANSPORTATION

AMOCO PRODUCTION CO. let an $11.5 million contract to Davy McKee Corp. Process Group USA, Houston, to build compressor stations at the Florida River site near Durango, Colo., and near Bayfield, Colo. The stations will support coalbed methane development.

SOUTHERN CALIFORNIA GAS CO., the biggest U.S. gas utility, delivered 1 .033 tcf of gas in 1989, a 5.6% jump from 1988 and close to the record 1.067 tcf in 1987.

EXPLORATION

UNION TEXAS PETROLEUM CORP. plans to delineate a discovery on Vermilion Block 404 in the Gulf of Mexico. Its No. 1 well cut 156 ft of gas pay and 67 ft of oil pay in two zones below 7,500 ft. The well flowed 1,668 b/d of oil through a 1/2 in. choke with 1,503 psi flowing tubing pressure from 8,195-8,290 ft. Union Texas found 142 ft of gas pay in two zones below 4,300 ft on adjacent Vermilion Block 412 in mid-1989 (OGJ, July 17, 1989, p. 34). Both blocks will be produced through a platform on Block 412 starting in 1991.

HONDO OIL & GAS CO., Roswell, N.M., and Phillips Petroleum Co. plan to offset 1 Crossroads, a Silurian Fusselman discovery in Irion County, Tex. It flowed 525 b/d of 45 gravity oil through a 24/64 in. choke with 500 psi flowing tubing pressure from perforations at 9,280-90 ft in the top of a 65 ft Fusselman section. Gas:oil ratio is 450:1. The companies own 51,500 acres of leases and options in the area.

MERIDIAN OIL INC. leased 12,400 acres in the Raton basin of southern Colorado to K N Energy Inc.'s Western Oil Corp., Lakewood, Colo. Meridian also leased 24,000 acres in the Raton basin in 1989 to Wester,n, which drilled 20 wells Meridian is completing.

NEW YORK STATE DIVISION OF MINERAL RESOURCES will conduct a sealed bid sale in Albany Mar. 14 covering 14,341 acres of oil and gas leases in Cortland, Allegany, Chenango, and Chautauqua counties.

MISSISSIPPI seismic data from leases held by Exploration Co. of Louisiana, Lafayette, La., and ARCO Oil & Gas Co. indicate a structure covering about 20,000 acres, not 290,000 acres as reported to OGJ (OGJ, Feb. 12, p. 24).

PROCESSING

AMOCO PRODUCTION CO. let contract to Fluor Daniel Inc. for engineering and procurement for a 400 MMscfd gas processing plant next to and replacing a 400 MMscfd plant built in the 1940's at Ulysses, Kan., serving Hugoton field. Total installed cost of the project is more than $140 million. Contract value to Fluor is about $80 million. Engineering is under way, with plant completion scheduled for 1992.

AGRICULTURAL MINERALS CORP. (AMC) plans to acquire Freeport-McMoRan Inc.'s Blytheville, Ark., and Verdigris, Okla., nitrogen fertilizer plants, selected terminals, and related assets for $230 million plus assumption of liabilities. Closing is expected near the end of this month. AMC was formed by Morgan Stanley Leveraged Equity Fund 11 LP and Robert B. Gwyn, president of Freeport's Agrico Chemical Co.

LYONDELL PETROCHEMICAL CORP. completed the purchase of Rexene Products Co.'s polyethylene and polypropylene plants in Bayport, Tex., for $88 million.

DRILLING-PRODUCTION

KAISER-FRANCIS OIL CO., Tulsa, purchased interests in 67 Oklahoma producing leases from CNG Producing Co., New Orleans, for $1.7 million. Net reserves are 11000 bbl of oil and 2 bcf of gas. Kaiser-Francis also acquired interests in 196 oil and gas leases in Kansas, New Mexico, Oklahoma, and Texas from an undisclosed seller for $1 million. It expects to close seven other purchases for a combined $4.9 million by early March in addition to the pending acquisition of MGF Corp. assets (OGJ, Jan. 15, p. 19).

UTI ENERGY CORP.'S Triad Drilling Co., Oklahoma City, bought the contract drilling assets, including eight rigs, of Rine Drilling Co., Wichita, Kan. The acquisition brings Triad's fleet to 25 rigs in the Anadarko basin.

AEDC (U.S.A.) INC., Houston, let a contract to McDermott Marine Construction for fabrication and installation of a 12 slot jacket, drilling and production deck, and rig package for Mississippi Canyon Block 486 in the Gulf of Mexico in about 600 ft of water. An earlier report incorrectly identified ARCO, the former operator, as present operator of the block (OGJ, Jan. 22, p. 27).

COMPANIES

PARAMOUNT PETROLEUM CORP., Houston, and Monticello Acquisition Corp., Dallas, will merge their oil and gas operations July 1. The combined entity, named Paramount, will have 100,000 acres of leases throughout the Gulf Coast and Southeast U.S. and 50,000 acres of minerals in South Louisiana and Oklahoma. It will pursue exploration and acquisitions. Paramount has discovered more than 20 million bbl of oil equivalent in the last 18 months. Monticello invested with Paramount last year (OGJ, Sept. 11, 1989, p. 26)

GENESIS PRODUCING CO., Corpus Christi, plans to sell its interests in oil and gas properties off Texas and along the Texas and Louisiana Gulf Coast. Net proved reserves are estimated at 13.4 bcf of gas and 1 million bbl of oil. Black Energy Resources Co., Houston, will broker the interests.

BT ENERGY CORP., Cleveland, formerly Strata Corp., plans to merge with Benatty Corp., Cambridge, Ohio, and acquire a drilling rig and other assets from other companies affiliated with Benatty Pres. Gerald Benson. Benatty shareholders will receive about $5 million. The combined companies will operate more than 650 wells and nearly 400 miles of gathering lines in Ohio.

ARCO OIL & GAS CO. leased an $11.5 million Cray Y-MP4/216 supercomputer for its Plano, Tex., computer center for exploration/production applications. The new unit replaces a Cray model installed in 1981.

ACQUISITIONS

ATWOOD OCEANICS INC. acquired Kaneb Services Inc.'s indirect interest in the Hunter, Eagle, and Falcon semisubmersible rigs. Atwood is assuming direct operating management of the rigs.

SIETE OIL & GAS CORP., Roswell, N.M., acquired 90% of the common stock of QED Exploration Inc., Denver, for about $5.5 million. Main assets are 530,000 bbl of oil and 1.4 bcf of gas, mostly in Irion County, Tex., and $2 million in working capital. Siete plans to move QED operations to Roswell.