Hoover Energy Partners buys Permian Basin assets, building crude oil pipeline

HOUSTON, Texas - Hoover Energy Partners LP announced on Jan. 12 that it has acquired a 50-mile natural gas gathering system, water transportation system and water disposal well located in Reeves County, Texas, from Eagle Oil & Gas.

The Eagle system is underpinned by a long-term dedication of approximately 68,000 gross acres that Comstock Resources, Inc. (NYSE: CRK) recently acquired from Eagle Oil & Gas.

Additionally, Hoover announced it has begun construction on Phase I of the Pecos Crossing Pipeline, a 24-mile, 12-inch crude oil system that will serve Ward and Reeves counties, Texas, and will have a capacity of up to 120,000 b/d. Both assets are located in the heart of the Bone Spring and Wolfcamp plays of the Delaware Basin.

"Hoover Energy Partners has shifted into high gear with the Eagle acquisition and construction of Pecos Crossing," said Randy Hoover, president of Hoover Energy Partners. "We see 2012 as the year that Hoover will emerge as the premier midstream company serving producers targeting the Wolfbone play in Reeves and Pecos counties. Additional growth projects will be announced in the coming months."

Pecos Crossing Pipeline is scheduled to be operational in April 2012 and will be the first crude oil pipeline operating south of the Pecos River. At its northern terminus, Pecos Crossing will deliver to Plains All American Pipeline's newly constructed Barstow Station. At the southern terminus, Hoover will serve the Perry Ranch Station, a newly constructed truck loading and tank terminal.

Multiple producer- and Hoover-owned laterals will continue to be constructed and connected as the Wolfbone is developed. Phase II of Pecos Crossing is being contemplated as the Wolfbone play extends south into Pecos County, Texas, where Hoover's legacy 550-mile natural gas gathering system and treating facilities are located.

Rainbow Pipeline segment shut in by wildfires restarts in northern Alberta

CALGARY, Alta. - Oil and gas activities in northern Alberta began returning to normal as the number of forest fires in the region abated and the Plains All America Rainbow Pipeline resumed partial operations.

Power to Alberta's Slave Lake region, decimated by wildfires fanned by strong winds, has been restored, allowing pumping stations and pipelines to resume operations.

Operator Plains Midstream Canada, a subsidiary of Plains All American Pipeline, restarted the southern portion of its Rainbow Pipeline on the afternoon of May 25, a day later than expected, after being shut down since May 15.

"The line has been closed for the past 10 days as a precautionary measure due to the threat from forest fires in the area," said vice president Stephen Bart.

The Nipisi-to-Edmonton segment of the pipeline was flowing at about 136,000 b/d, an average rate for current supply and demand conditions, said Bart. More than 150,000 b/d of heavy oil production in north central Alberta were shut down because of fires and power interruptions.

The northern portion of the Rainbow Pipeline, running from Zama to Nipisi, remained closed after a late April rupture that spilled 28,000 barrel of oil in the muskeg. Cleanup operations restarted on May 25 after workers were evacuated five days before due to fires in the area. The pipeline remains closed pending restart approval from provincial regulators.

Syncrude prices gain as wildfires in Canada shut in crude output

CALGARY, Alta. - The premium for Canadian syncrude rose as fires in northern Alberta forced crude oil producers to shut output and Plains All American Pipeline LP to close a pipeline section.

As of early May 16, 116 wildfires were burning in Alberta, 39 of them out of control, the provincial government said. A total of 206 square miles had been burned by then.

Warm, dry and windy conditions were fueling the blazes, which were cutting a swathe across central Alberta.

The government deployed 1,000 firefighters, 100 helicopters and 20 water bombers to battle the blazes. In addition, 200 more firefighters were expected to arrive from other Canadian provinces.

Cenovus Energy Inc. said it expected to suspend production at a large oil field in northern Alberta on May 16 due to the wildfires. Cenovus said 22,000 b/d of production at its Pelican Lake site would remain shut. A company spokeswoman said it had sufficient storage to keep producing until May 17.

Exall Energy Corp. shut its Marten Mountain plant which produces 1,750 barrels per day, the company said in an e-mailed statement.

Pipeline limited partnerships rebound sharply following selloff

Shares of pipeline operators plunged in the waning months of 2008, but have rebounded sharply in the first few days of 2009.
Atlas Pipeline Partners, for example, rebounded from $5.20 a share at yearend 2008 to $10.25 at end of day Jan. 6, up almost 100 percent, and was paying a $3.84 annual dividend. Eagle Rock Energy Partners, paying $1.64, jumped from $4.50 a share to $8.02. Enbridge Energy Partners, paying $3.96, jumped from $24.03 to $30.20. Plains All American, paying $3.57, ran from $32.00 to $38.98. Williams Partners LP, paying $2.54, jumped from $$11.50 to $16.34. And Buckeye Partners, paying $3.50, ran from $30.25 to $36.80.
In 2008, companies such as Enterprise Products Partners and El Paso Corp. have struggled with falling share prices, tight credit markets and a shifting mix of shareholders that has eroded their stock prices.
Enterprise fell almost 35 percent last year, while Kinder Morgan Energy Partners dropped 15 percent and El Paso plunged 55 percent. The declining shares led to El Paso’s removal from the Standard & Poor’s 100 Index.