EXPLORATION
TRI-VALLEY OIL & GAS CO., Bakersfield, Calif., and Phillips Petroleum Co. extended their joint venture gas exploration program in California's Sacramento Valley through 1990. Targets are 20-50 bcf reservoirs at 7,000-12,000 ft in Sacramento, San Joaquin, Solano, Contra Costa, and Yolo counties in and around Rio Vista gas field and several other large gas fields.
COMPANIES
AMOCO CORP. directors approved a 1990 capital and exploration budget of $3.95 billion, up 13% from the 1989 budget and 17% more than estimated spending in 1989. This year's budget is up 12% in the U.S. and 27% in non-U.S. areas.
SUN CO.INC. will take an after tax charge of $177 million against fourth quarter 1989 earnings. The action will follow a review that showed certain assets are no longer likely to be productive and a decision not to develop some of the company's energy resources. Sun also recorded an after tax writedown of some oil and gas assets outside North America and coal assets in the U.S.
SNYDER OIL PARTNERS LP, Fort Worth, retained PaineWebber Inc. and Smith Barney, Harris Upham & Co. Inc. to advise it on a restructuring proposal that involves converting into a corporation through consolidation with its general partner, Snyder Oil Co.
ENRON CORP. signed a definitive agreement to sell its interest in Zapata Gulf Marine Corp. for $52.7 million to a group led by Bessemer Securities Corp. and Corporate Partners LP. Halliburton Co. sold its Zapata Gulf interest to the same buyers for $31.5 million. Enron, Zapata Corp., and Halliburton formed Zapata Gulf, a marine service vessel company, in 1984. Texas Eastern Corp. joined the venture in 1986.
UNIT HOLDERS of Houston Oil Trust, Houston, approved the offer of Seagull Energy Corp., also of Houston, to buy the trust assets. Unit holders may choose to receive either $2.05/unit in cash or $1.45/unit in cash plus $1/unit principal amount of a new Seagull 8% contingent tax litigation note less liquidation and contingency costs. Seagull aims to complete the purchase no later than Jan. 5.
PROCESSING
LUMMUS CREST, UOP, and Monsanto agreed to merge their ethylbenzene and styrene process technologies. Lummus Crest, with colicensors Unocal and Chemical Research & Licensing, will contribute its ethylbenzene process, and UOP will supply the proprietary catalyst and assume responsibility for developing an improved catalyst. All three companies will integrate UOP's Styro-Plus oxidative reheat and associated technologies with Monsanto-Lummus Crest styrene technology in a move designed to form a new, improved process.
CHEVRON U.S.A. INC. hired Fluor Corp. to take part in a feasibility study for a proposed $1 billion modernization project at its 270,000 b/cd Richmond, Calif., refinery. Fluor will evaluate and execute work agreements, assist in development of design and construction options, and provide cost estimates for the program. Chevron expects to make a decision late this year on whether to proceed with the project.
MARKETING
P.C. VENTURES LTD., Calgary, signed a letter of intent to buy 350 convenience stores and 267 associated retail gasoline outlets from Circle K Corp. in the U.S. Pacific Northwest and Rocky Mountains. Tentative terms call for completion of the purchase by Mar. 31. The stores would continue to operate under the name of Circle K, which would receive annual royalty payments.
VALVOLINE INSTANT OIL CHANGE INC., Lexington, Ky., purchased Snappy Lube, the largest chain of fast oil change service centers in Cincinnati. Main assets are 15 quick lube centers in Cincinnati and northern Kentucky. Valvoline, an Ashland Oil Inc. subsidiary, plans to build five more centers in the area by 1991.
TRANSPORTATION
DEPARTMENT OF TRANSPORTATION declined to further delay implementation of a rule requiring pipeline operators to begin anti-drug programs. Last April it delayed the effective date of the rule to Apr. 20, 1990, for operators with more than 50 employees and Aug. 21, 1990, for those with less. The agency outlined the move in a Dec. 18, 1989, Federal Register notice, along with other clarifying changes.
EL PASO NATURAL GAS CO. settled a 5 year old gas purchase dispute and related matters with TransAmerican Natural Gas Corp., Houston, covering jointly owned leases on the La Perla Ranch in Zapata County, Tex. Subject to certain conditions, El Paso will pay TransAmerican $300 million and assign TransAmerican mineral interests on the ranch with an estimated value of $90-100 million.
FIFTH CIRCUIT U.S. COURT OF APPEALS denied the Federal Energy Regulatory Commission's request for a rehearing of its decision vacating Order 451 (OGJ, Sept. 25, 1989, p. 35). That action clears the way for a FERC appeal to the U.S. Supreme Court. The appeals court found that FERC exceeded its powers in issuing the June 1986 rule, which was designed to encourage producers and pipelines to renegotiate gas contracts.
COLUMBIA GAS TRANSMISSION CORP. agreed to provide Public Service Electric & Gas Co. (PSE&G), Newark, N.J., firm transportation service for as much as 4.6 bcf/year of gas for 20 years. Columbia will begin the service in December 1990 through its proposed 8.6 mile pipeline from Swedesboro to West Deptford in Gloucester County, N.J. PSE&G will lay 5.8 miles of line to receive the gas.
COGENERATION
YORK RESEARCH CORP., New York, began design of two cogeneration projects, one to serve a 20,000-40,000 kw, 22 year contract to supply power to Con Edison and the other to furnish power for a large industrial park in the New York City area. York also began expansion of its first cogeneration plant in New York to sell at least 20,000 kw to Con Edison under a separate contract.
DRILLING-PRODUCTION
LOUISIANA LAND & EXPLORATION CO., New Orleans, essentially completed its program of asset sales and trades, begun last year and mainly involving onshore producing leases. As of mid-December LL&E had sold leases holding about 31 million bbl of oil equivalent reserves for about $198 million in cash. In addition, it traded certain leases in Texas and Louisiana to BP Exploration Inc. for BP's working interest in Madden field in Wyoming.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.