Joint venture to provide long-term natural gas reserves from Wyoming
field
PORTLAND, Ore.--(BUSINESS WIRE)--
Northwest Natural Gas Company, dba NW Natural (NYSE: NWN), and
Encana Oil & Gas (USA) Inc. (Encana), a subsidiary of Calgary-based
Encana Corp.(NYSE, TSE: ECA), today announced the signing of an
agreement for NW Natural to invest in a joint venture to develop gas
reserves that will provide long-term supplies for NW Natural’s Oregon
utility customers over a 30-year period.
During the first 10 years of the joint venture, NW Natural expects the
volume of gas produced to provide approximately 8-10 percent of the
company’s average annual requirements for its utility customers. These
gas reserves come from the Jonah Field in Wyoming, located north of Rock
Springs.
Under terms of the agreement, NW Natural will pay approximately $45-55
million a year, for a five-year period, for a total investment of about
$250 million, which will cover expected drilling costs in exchange for
working interests in certain sections of the Jonah Field. The sections
include both future and currently producing wells.
NW Natural estimates the gas reserves will save Oregon customers more
than $50 million on a net present value basis over the life of the
agreement. The Jonah Gas Field is considered to be one of the 10-largest
gas fields in the U.S. with over 2 Trillion cubic feet equivalent (Tcfe)
of proved reserves.
An application hearing with the Public Utility Commission of Oregon
(OPUC) has been filed and is likely to occur in late April, with an
expected effective date of May 1, 2011. If approved, NW Natural’s
expenditures for the gas reserves, cost of capital and associated
operating costs will be included in rates on an annual basis.
The company intends to finance the joint venture with internal cash
flows and other long-term financing as necessary.
About NW Natural
NW Natural (NYSE:NWN) 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. Additional information is available at www.nwnatural.com.
Forward-looking statements
This report, and other presentations made by NW Natural from time to
time, may contain forward-looking statements within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as “anticipates,” “intends,”
“plans,” “seeks,” “believes,” “estimates,” “expects” and similar
references to future periods. Examples of forward-looking statements
include, but are not limited to, statements regarding the following:
plans, objectives, goals, strategies, future events, investments,
estimated gas reserves and supplies, customer savings, potential project
expansion, continued drilling, project costs and completion dates,
commodity costs, financing, financial positions, performance, regulatory
actions or approvals, and other statements that are other than
statements of historical facts.
Forward-looking statements are based on our current expectations and
assumptions regarding our business, the economy and other future
conditions. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Our actual results may
differ materially from those contemplated by the forward-looking
statements. We caution you therefore against relying on any of these
forward-looking statements. They are neither statements of historical
fact nor guarantees or assurances of future performance. Important
factors that could cause actual results to differ materially from those
in the forward-looking statements are discussed by reference to the
factors described in Part I, Item 1A “Risk Factors,” and Part II, Item 7
and Item 7A “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Quantitative and Qualitative Disclosure
about Market Risk” in the company’s most recent Annual Report on Form
10-K and in Part I, Items 2 and 3 “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and “Quantitative and
Qualitative Disclosures About Market Risk,” and Part II, Item 1A, “Risk
Factors,” in the company’s quarterly reports filed thereafter.
All forward-looking statements made in this report and all subsequent
forward-looking statements, whether written or oral and whether made by
or on behalf of the company, are expressly qualified by these cautionary
statements. Any forward-looking statement speaks only as of the date on
which such statement is made, and we undertake no obligation to publicly
update any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be required
by law. New factors emerge from time to time and it is not possible for
the company to predict all such factors, nor can it assess the impact of
each such factor or the extent to which any factor, or combination of
factors, may cause results to differ materially from those contained in
any forward-looking statements.
Source: Northwest Natural Gas Company
Contact:
Northwest Natural Gas Company
Investor Contact:
Bob Hess,
503-220-2388
bob.hess@nwnatural.com
or
Media
Contact:
Kim Heiting, 503-220-2366
kah@nwnatural.com