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Date: Mon, 28 Jan 2002 09:11:32 -0800 (PST)
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To: rebrooks@rbac.com
Subject: GPCM News: 1/28/02: Philips Seeks Tax Help on ANGTS:
 AEC,PanCanadian Consider Merger
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From http://www.enerfaxgold.com <http://www.enerfaxgold.com/> :

 

Phillips Seeks Tax Help on Alaska Pipeline Project

 

    Phillips Petroleum says it is optimistic about a proposed 

pipeline that would transport natural gas from the North Slope to 

Alberta on a route following the existing trans-Alaska oil pipeline 

and the Alaska Highway. The pipeline was authorized in the 1970s by 

the US and Canadian governments, but poor economics precluded 

commercialization. All three major Alaska oil producers, Phillips, BP 

and Exxon Mobil, believe that new legislation is needed to update the 

Alaska Natural Gas Transportation System Act, which granted the 

initial permits for the project. The producers have also agreed to 

seek permission for accelerated depreciation on federal taxes. 

However, Phillips also wants a credit that would be applied if 

natural gas prices reach a designated floor such as $1.25 per MMBtu. 

The three major North Slope oil producers have spent about $100 

million to study the feasibility of building an overland pipeline 

that would tie the North Slope to existing facilities in Alberta. The 

pipeline project would run about 2000 miles would cost $15 billion - 

$20 billion. 

 

Alberta Energy and PanCanadian Consider Merger

  

    PanCanadian Energy Will buy Alberta Energy in a $16.8 billion 

share exchange deal which will create North America's largest oil 

exploration and production company, replacing Anadarko. The deal will 

allow the companies to compete effectively on a global basis. The new 

company, which is to be headquartered in Calgary, will be named 

EnCana Corp. The exchange ratio is a market-to-market ratio based on 

the average of the closing price for the 10 trading days ended 

January 23rd. PanCanadian shareholders will own about 54% and AEC 

shareholders will own about 46% of EnCana. Combined, the stocks of 

the two companies make up 44% of the TSE's oil and gas sub-index. 

Some say that Canadian companies have realized the need to bulk up in 

order to be competitive with larger companies in the US, like 

Anadarko, Burlington Resources and Devon Energy, and to attract 

investors. The deal could also be a self-protection measure in 

response to last year's rash of takeovers of Canadian oil firms by US 

companies, like those that took over Gulf Canada, Anderson 

Exploration and Canadian Hunter. Alberta Energy and PanCanadian may 

have seen themselves as vulnerable to possible takeovers. PanCanadian 

had been considered a possible takeover target when it was spun off 

from Canadian Pacific in October. A new AEC-PanCanadian company would 

produce 255,000 bpd of oil and natural gas liquids and 2.5 Bcf of 

natural gas per day. PanCanadian has natural gas and oil production 

facilities in Western Canada and offshore operations in Nova Scotia, 

the Gulf of Mexico and North Sea, where it recently discovered the 

areas largest oil field in 10 years, named Buzzard. AEC also produces 

oil and natural gas in Western Canada, owns about 14% of the Syncrude 

Canada oil sands project and has exploration, production, pipeline 

and natural gas storage units in the Rocky Mountains, Ecuador and the 

Arctic. 

 

Bob Brooks

GPCM Natural Gas Market Forecasting System

http://gpcm.rbac.com <http://gpcm.rbac.com/>