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North American Briefs
Petroleum News Staff
Canada’s Bonavista to become largest trust Bonavista Petroleum, Canada’s sixth-largest oil and gas producer, is turning itself into the largest energy income trust in a C$1.03 billion deal. It said April 9 that 90 percent of its production of 37,000 barrels of oil equivalent per day will be placed in Bonavista Energy Trust. CEO Keith McPhail said Bonavista, which started as a C$20 million company in 1997, has run out of expansion prospects in the Western Canada Sedimentary Basin. Trusts traditionally direct 75 percent to 95 percent of their cash flow to investors rather than into E&P activities.Canada on notice: Wyoming gas output to soar Canadian natural gas producers have been put on notice that they could lose out to production from Wyoming’s Powder River Basin unless they tie up long-term pipeline capacity. Paul Miller, vice president of Northern Border Pipeline Co., said contracts for 1 billion cubic feet per day on the Northern Border system and 1.8 bcf on the TransCanada PipeLines system expire in November. He said Wyoming output is now 900 million cubic feet per day and could soar to 5 bcf in the next three to five years.Refiners Frontier, Holly agree to merge Privately held U.S. refining independents Frontier Oil and Holly have agreed to a merger valued at $462 million in cash, shares and assumed debt. The combined company will have initial output of 263,000 barrels per day from five refineries in Kansas, Wyoming, New Mexico, Utah and Montana and a 25 percent market share in the Rocky Mountain region.El Paso asks for employees’ advice On April 14, El Paso Corp. filed a letter with the U.S. Securities and Exchange Commission saying it has sent a letter to employees asking for ideas on how to cut expenses for its three-month “clean slate initiative.” The letter said El Paso’s costs increased as a result of mergers with Sonat, Tenneco and Coastal Corp., but expenses haven’t decreased as El Paso has shrunk in the past year in the face of a weak energy market, the ongoing shutdown of its energy trading unit, heavy debt, fleeing shareholders and stepped-up scrutiny from credit rating agencies and regulators in the aftermath of the collapse of Enron Corp.El Paso sells stake in East Coast Power El Paso Merchant Energy, a subsidiary of El Paso Corp., is selling its stake in East Coast Power to a subsidiary of The Goldman Sachs Group Inc. for $456 million. The cash sale was announced April 16 and is subject to a number of conditions.Kyoto cash: Stanford donates $350 million KYOTO CASH: James Stanford, a former chief executive officer at Petro-Canada, is handing out C$350 million of Canadian government money to accelerate commercialization of technologies to help Canada meet its Kyoto Protocol targets. He is chairman of the government’s Sustainable Development Technology Fund. Despite Kyoto opposition from his former company and the industry at large, Stanford said the “debate is over.” Now the challenge is to make the climate change treaty work.Temps in Canada Arctic hit 5,000 year high A study to be published soon by researchers at Queen’s University, Ontario, says temperatures in Canada’s Arctic are the warmest in 5,000 years. The findings show that algae requiring long periods of open water, free of ice, are thriving in 50 Northwest Territories lakes. Queen’s biologist John Smol said the easiest explanation is global warming.
Suncor to buy ConocoPhillips refinery Calgary-based Suncor Energy said April 15 that its U.S. subsidiary has reached an agreement with ConocoPhillips to acquire its Denver, Colorado refinery, along with 43 Phillips-branded retail stations and associated storage, pipeline and distribution facilities. Suncor is paying US$150 million plus buying current crude and product inventories. The company says the acquisition, which is subject to a number of conditions including approval of the U.S. Federal Trade Commission, is a key strategic step in its oil sands growth strategy.ARC Energy, Star Oil and Gas close deal ARC Energy Trust said April 16 that it had closed on its acquisition of Star Oil & Gas following receipt of all regulatory approvals. ARC, Canada’s second largest conventional oil and gas royalty trust with an enterprise value of approximately $2.4 billion, will change its name to ARC Resources Ltd.
Michigan web site offers gas price info The state of Michigan has a new web site for consumers to get information on gasoline in Michigan, including gas prices, where to find gas stations and tips for buying gasoline. Check it out at www.michigan.gov/gaspricesUnion files Habitat Division grievance The Alaska State Employees Association has filed a grievance filed with the state Personnel Division over layoffs that will result from Gov. Frank Murkowski’s executive order to do away with the state’s Department of Fish and Game’s Habitat Division. The union cites contract violations as the reason for the filing. Twenty-two division employees will lose their jobs May 1 when the agency’s authority to issue permits is transferred to the Alaska Department of Natural Resources. Habitat biologists have been criticized for delaying development projects by holding up permits or demanding unnecessary studies or other paperwork, Murkowski has said.Decision could affect Exxon Valdez judgment An early April U.S. Supreme Court decision limiting the size of jury awards could affect the $5 billion judgment in the Exxon Valdez oil spill case, which is still pending. The court ruled in a case involving a Utah traffic accident that a state court jury’s award of $145 million was excessive and found that punitive damages should not so vastly exceed the actual damages. The court also said juries may not award giant sums to punish companies just because they’re big, rich or regarded as part of an unpopular industry.ChevronTexaco cuts CEO’s bonus by 86% ChevronTexaco reduced its year-end bonus for Chairman and Chief Executive Officer Dave O’Reilly by 86 percent due to lower than anticipated income in 2002, the company said in a filing with the Securities and Exchange Commission in mid-April. O’Reilly received a $700,000 bonus for 2002, compared with $5 million for 2001.
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