U.S. BRIEFS

GAS PROCESSING

BT SECURITIES CORP., a unit of Bankers Trust New York Corp., closed a 201/2 year, $200 million leverage lease of most of the equipment at Enron Gas Processing Co.'s Bushton, Kan., gas processing plant. Financing was arranged to expand the plant, which is to go on stream by spring 1992. BT said Enron's Bushton plant is the largest natural gas liquids producer in the Lower 48 and accounts for about 40% of Enron's NGL production.

LIMITED OPERATIONS resumed late Dec. 4 at Union Pacific Resources Co.'s 520 MMcfd gas processing plant near Carthage, Tex., after an early morning fire in the 100 MMcfd No. 3 train shut down the plant. The fire, which started after a heat exchanger failed, was controlled with water hoses and by isolating pressure with shutoff valves. There were no injuries and at presstime no damage estimates. UPRC said outgoing pipelines and their customers should easily secure alternate supplies until the plant is restored to full service.

TRANSPORTATION

ARK CITY TANK STORAGE CO., Arkansas City, Ark., began operating an 800,000 bbl storage terminal on the Mississippi River at Arkansas City for ethanol, methyl tertiary butyl ether, and other oxygenates. About half the terminal's capacity is under long term lease to store MTBE. Ark City Tank Storage is jointly owned by Mapco Petroleum Inc. and Itapco-MidSouth Terminal Inc. and operated by the latter.

EASTEX ENERGY INC., Houston, agreed in principle to acquire Service Pipeline Co. (Servco), Houston, and its subsidiaries with shares of Eastex common stock, based on value of Servco's assets at closing, and assumption by Eastex of $2.9 million of Servco's secured debt. Closing is expected by yearend. As of Sept. 30 Servco had total assets of $5.5 million.

TRANSWESTERN PIPELINE CO., Houston, and Northwest Pipeline Corp., Salt Lake City, signed an agreement detailing operator and owner rights and responsibilities of the pipeline interconnect and San Juan basin gas receipt facilities under construction at Blanco, N.M. Transwestern will operate the $4.1 million Blanco Hub, which will be capable of moving 800 MMcfd of gas. The partners signed a contingent sales contract with Gas Co. of New Mexico to jointly own and use Blanco Hub.

COMPANIES

TEJAS POWER CORP., Houston, signed a definitive contract with Northern Indiana Public Service Co. (Nipsco) to provide long term gas sales for as much as 20,000 MMBTU/day for as long as 7 1/2 years. The contract calls for deliveries into Natural Gas Pipeline Co. and Trunkline Gas Co. systems in Texas and Louisiana under firm transportation agreements with redelivery to Nipsco's city gate. Tejas began sales to Nipsco Nov. 1.

DRILLING-PRODUCTION

NERCO OIL & GAS INC., Vancouver, Wash., began production from its A-1 sidetrack on Eugene Island Block 43, 21 miles off Louisiana. The well, which initially flowed 900 b/d of oil and 10.6 MMcfd of gas, was drilled to a total depth of 11,615 ft and encountered 32 ft of net measured Miocene pay. Nerco holds a 66.67% working interest in the well.

NERCO set its fourth production platform in the Gulf of Mexico this year, 150 miles off Louisiana on Vermilion Block 412 in 467 ft of water. The 3,500 ton platform has design capacity of 60 MMcfd of gas and 3,000 b/d of oil. Nerco will complete five wells through a subsea template and drill subsequent well with a deck mounted drilling rig. Installation of a 16 in. gas sales line is in progress. First production is expected by yearend 1992.

ASHLAND EXPLORATION INC., Houston, plans to drill 140 wells in the Appalachian basin in 1 992 and is evaluating offsets to its J-5 Smith Heirs well in Big Sandy Gas field of Pike County, Ky., which flowed more than 20 MMcfd of gas from Mississippian Maxton below 1,670 ft. It is the company's 18th successful well in the basin since Oct. 1. The Smith lease is one of several acquired from Oxy USA Inc. last year (OGJ, May 28, 1990, p. 46).

EQUITABLE RESOURCES INC., Pittsburgh, bought the Appalachian basin oil and gas leases of Coastal Corp. subsidiary ANR Production Co. and some Coastal drilling programs for $75 million (OGJ, June 3, p. 38), adding about 20% to its proved reserves. Most of the 220,000 net acres are undeveloped, and Equitable expects net production from the new leases to reach or exceed 10 bcf/year of gas based on a development program of several hundred new wells.

VESSELS OIL & GAS CO. and General Atlantic Resources Inc., both of Denver, bought leases held mainly by Apache Corp.'s MW Petroleum Corp. unit for $12.2 million. Vessels bought interests in 70 leases in Weld, Adams, and Arapahoe counties, Colo., which produce about 70 b/d of oil and 2 MMcfd of gas. General's interests are in 300 wells in Pine and Pennel waterflood units in Fallon, Prairie, and Wibaux counties, Mont., that produce about 460 b/d of oil.

ENERGY MARKETING CO., Fort Worth, will offer 110 properties in Michigan, New Mexico, Oklahoma, and Texas at a no minimum bid sale Dec. 18 in Dallas. The company also is accepting offers until Jan. 20, 1992, in a liquidation sale of properties in Pawnee Lake field in Pawnee County, Okla. Net reserves in the Pawnee Lake sale are pegged at 189,731 bbl of oil and 631 MMcf of gas. A sealed bid auction will be held Jan. 30 if the leases are not sold by Jan. 20.

COMSTOCK RESOURCES INC., Dallas, acquired producing oil and gas properties in 22 fields in Louisiana, Texas, Oklahoma, and Arkansas from parties represented by Goodrich Oil Co. and others. Reserves are estimated at 770,000 bbl of oil and 28 bcf of gas as of July 1, 1991. Comstock sold production payments entailing an interest in reserves from the properties totaling $19.1 million to the Enron Gas Services unit of Enron Corp. to fund the purchase.

EXPLORATION

CHUSKA RESOURCES CORP., San Antonio, 31-K(N) Mule wildcat in the Aneth area of southeastern Utah yielded 240 b/d of oil on a swab test of Pennsylvanian Desert Creek at 6,003-29 ft. The well marks Chuska's 12th discovery in its algal reef mound play on Navajo lands.

BUREAU OF INDIAN AFFAIRS proposed a rule required by the 1982 Indian Mineral Development Act changing leasing procedures for tribal and allotted Indian lands. The proposed rule raises the minimum royalty rate to one-sixth from one-eighth but gives BIA authority to approve leases with lower royalty rates if it is in the best interest of the Indian mineral owner.

MARKETING

SHELL OIL CO. is introducing SR 2000, an 89 octane midgrade and its third unleaded gasoline, into California and Nevada markets. SR 2000 has been sold east of the Rocky Mountains since September 1988 and in Hawaii since October 1989.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.