Virgin America To Buy $1.4 Billion In Engines

- Virgin America To Buy $1.4 Billion In Engines



Jun 15, 2011

Virgin America, the budget-airline, said Wednesday it ordered $1.4 billion in LEAP-X jet engines from CFM International. The new engines will power 30 Airbus A320neo aircrafts, which will be ready for use beginning in 2016.

LEAP-X promises better fuel economy, and Virgin has determined that the new engine will reduce its fuel bill by $1.9 million a year for each aircraft.

Virgin America has planned to triple its fleet since January, ordering 60 A320-family aircraft, including the re-engined version of the popular single-aisle jetliner

Oil & Gas Post

Promote Your Page Too

Oregon Utility to Invest $250M in Jonah Field Development

Oregon Utility to Invest $250M in Jonah Field Development

Monday, May 02, 2011
Encana Corp.

Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corp., has completed a benchmark upstream joint-venture development agreement with Northwest Natural Gas Co., a Portland, Oregon-based natural gas distributor.

The Public Utility Commission of Oregon recently approved the agreement that will see Northwest Natural invest about US$250 million over the next five years to earn a working interest in certain sections of Encana's Jonah field in Wyoming. The arrangement provides NW Natural with secure, reliable and economic supplies of natural gas for a portion of the needs of its 674,000 customers.

"This is a landmark agreement and regulatory step that we believe will open the door for future upstream investment by utilities seeking price stability for their customers transactions that are backed by utility ratepayers and supported by regulators as prudent investments. As a leading producer, Encana has heard end-users' requests for structures that provide long-term price security, and under this agreement, we are able to achieve both our customer's goal and efficiently advance the development of a portion of the Jonah field," said Renee Zemljak, Encana's Executive Vice-President, Midstream, Marketing & Fundamentals.

An innovative supply model for a utility

Traditionally, utilities have purchased natural gas on short-term contracts from wholesale markets, with customers subject to fluctuating prices. Under this transaction, in order to reduce price uncertainty for consumers, NW Natural will invest approximately $45 million to $55 million per year for the next five years earning a working interest in certain sections of Jonah natural gas field. This direct producer-utility deal helps secure long-term natural gas supply for NW Natural at the cost of production rather than at future market prices.

"This agreement and the commission's order represent a lot of hard work by a lot of parties over a short period of time, and we are pleased the commission approved the transaction," said NW Natural President and Chief Executive Officer Gregg Kantor. "This is a terrific outcome for both customers and shareholders."

"This transaction is another of Encana's many joint-venture arrangements that provide attractive investment opportunities and reliable, economic supplies of natural gas to a variety of counterparties. These transactions help serve our customers' needs and accelerate the value recognition of Encana's enormous resource potential," Zemljak said.

Joint ventures attract more than $840 million to Encana lands in 2011; other joint ventures available

In the past few years, Encana has established numerous joint ventures in Canada and the U.S., many that involve other natural gas producers, as well as industrial firms and national oil companies. In 2011, joint ventures are expected to result in about $840 million of additional capital investment on Encana lands. Encana recently announced plans to attract new joint venture partners on selected assets in the Horn River basin and its Greater Sierra lands.

Encana is also offering an acquisition opportunity for a portion of its producing Greater Sierra resource play. This new joint venture initiative builds on previous announcements of a farm-out agreement with Kogas Canada Ltd., a subsidiary of Korea Gas Corporation, in the Horn River and Montney formations and a planned joint venture and acquisition by PetroChina International Investment Company Limited of a 50 percent interest in Encana's Cutbank Ridge business assets. RBC Capital Markets and Jefferies & Company, Inc. have been retained by Encana to conduct the potential joint venture and divestiture processes on the Horn River and Greater Sierra assets.

Encana is a leading North American natural gas producer that is focused on growing its strong portfolio of natural gas resource plays in key basins from northeast British Columbia to Texas and Louisiana. By partnering with employees, community organizations and other businesses, Encana contributes to the strength and sustainability of the communities where it operates. Encana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.

NW Natural is headquartered in Portland, Ore., and provides safe, reliable, cost-effective natural gas service to about 674,000 residential, commercial, and industrial customers through 15,000 miles of mains and service lines in western Oregon and southwestern Washington. It is the largest independent natural gas utility in the Pacific Northwest. The company has approximately $2.6 billion in total assets. The company operates and owns 16 Bcf of underground storage capacity in Mist, Ore., and also operates the designed 20 Bcf Gill Ranch underground storage facility in California, in which it owns a 75 percent undivided interest. Together, NW Natural and its subsidiaries currently own and operate underground gas storage facilities with designed storage capacity of approximately 31 Bcf in Oregon and California.

Oil & Gas Post

Promote Your Page Too

Paxton to Acquire Virgin Oil

Paxton to Acquire Virgin Oil

Monday, May 02, 2011
Paxton Energy, Inc.

Paxton Energy, Inc., an energy turnaround company engaged in the acquisition, exploration, development and drilling of oil and natural gas properties, announced that on April 29, 2011, it entered into an agreement to acquire Virgin Oil Company, Inc. of Louisiana.

Virgin was incorporated in March of 1996 for the purpose of oil and gas exploration, development and production. Since that time, Virgin has successfully acquired interest in and developed multiple oil and gas producing properties with significant proven and probable reserves.

Under the terms of the Agreement, the shareholders of Virgin will receive an aggregate of 70,000,000 shares of Paxton common stock in exchange for all of the issued and outstanding shares of Virgin common stock. The closing of the Agreement is subject to the satisfaction of a number of conditions precedent, including but not limited to the completion of an audit of Virgin, in accordance with PCAOB standards and SEC guidelines; receipt of an updated third party engineering of Virgin, completion of a financing by Paxton, and approval of the Virgin bankruptcy judge, as Virgin is currently a debtor in possession under a Chapter 11 proceeding. Upon closing, Virgin will be a wholly owned subsidiary of Paxton and Paxton anticipates changing its name to Virgin Oil Company, Inc.

The most recent third-party reserve report prepared for Virgin, dated May 13, 2010, by James F. Hubbard (whose work for Virgin goes back to the 1990s under S.A. Holditch & Associates, which became Schlumberger Technology Services), calculates Virgin's net proven reserves at 6.4 MM boe (million barrels of oil equivalent) in addition to net probable reserves at 1.8 MM boe.

Virgin currently owns interests in multiple active leases in the Gulf of Mexico, covering approximately 50,000 acres. All are less than 100 miles from the Louisiana shoreline in water depths of between 40 and 200 feet. Virgin also owns an interest in one active on-shore lease located in the Empire Field in Plaquemines Parish, Louisiana.

In September 2008, Hurricane Ike caused significant damage to Virgin's existing operations. While past hurricanes resulted in only a few days of shut-down time on the offshore properties, Ike's damage to these pipelines took several months to repair and in Virgin's case production was not re-established on its properties until June 2009. This ten month down-time resulted in Virgin's creditors filing an involuntary bankruptcy petition against Virgin under Chapter 7 of the Bankruptcy Code, which was subsequently converted into a Chapter 11 proceeding.

"We consider the merger with Virgin to be a great opportunity for Paxton's shareholders," said Charles F. Volk, Jr., Chairman and CEO of Paxton. R. Fulton (Tony) Smith, Jr., Director, President and CEO of Virgin stated, "This merger will allow Virgin to ramp up oil production from existing wells and move forward on plans for new well drilling while growing revenues and achieving profitability."

Paxton engages in the acquisition, exploration, development and drilling of oil and natural gas properties. Paxton is an energy turnaround company whose strategy is to acquire cash flow producing properties with proven reserves, develop the fields by reworking existing wells and drilling new wells. Paxton was founded in 2004 and is based in Stateline, Nevada.

Virgin is a Louisiana-based independent exploration and production company engaged in the acquisition of exploratory leases and producing properties, secondary enhanced oil recovery projects, exploratory drilling, and production of oil and natural gas in the United States.

Oil & Gas Post

Promote Your Page Too