fw : bistineau louise ,
this is the email written by paul bienawski regarding a potential aquisition of bistineau . you had mentioned an interest in seeing this email last week .
mrha
- - - - - original message - - - - -
from : bieniawski , paul
sent : thursday , august 23 , 2001 9 : 54 pm
to : miller , don ( asset mktg )
cc : mrha , jean ; gregory , paul
subject : bistineau
importance : high
don ,
this is a long e - mail and i apologize for that but since we have not had a chance to talk , i wanted to send you some information on bistineau as well as the latest output from the storage group ' s m & a analysis .
the m & a analysis was just updated as they have been several reservoir transactions in the past few months ( aec @ manchester , atmos @ east diamond , and aquila @ lodi ) . prior to these transactions we did not have enough data points to draw meaningful conclusions about the trends in reservoir acquisition .
i have attached the output for your review but i think a couple of points are key .
the reservoir curve is " hockey - sticking " just as the salt curve did previously . while not as dramatic as salt , the premiums are increasing dramatically .
the market is not placing a premium on optionality . salt is inherently more flexible than a reservoir , yet on a deliverability basis , there does not appear to be a significant difference . that may explain why we see players who do value optionality in the marketplace ( aquila , aec , duke , etc ) . these companies have long established asset based storage groups and actively trade around these assets .
as far as bistineau is concerned , there are several points worth highlighting . i have attached output from the database maintained by the storage group for your reference . i have not included caverns but we do have that data .
reliant energy is part owner of the facility . reliant is aggressively trying to build a merchant storage business . my group has bumped into them several times in the marketplace .
since the facility is federally regulated , reliant and koch would be required to make a nga 7 ( b ) filing to abandon the services they provide their customers before anyone could purchase the reservoir . the length of this process would be a function of the number of intervenors .
bistineau is a very large reservoir with a large amount of native base gas . how much of this volume is recoverable ( and therefore monetizable ) is a large question mark .
relative to its peers , bistineau is a poor performer in terms of flexibility ( low injection capabilities )
koch has , in the past , written off losses at bistineau . the low injection rate may be as a result of this . i have not researched the exact amount of the losses but a seach of ferc filings would reveal the nature and extent of the losses . epps likewise has had some loss problems .
if enron ' s intent is to establish a storage asset position in louisiana , south downsville would probably be the best candidate . the field is privately held , under development , has many interconnects , and acquisition would probably meet little resistance given the lack of customers .
while i have not communicated with matrix in some time , i do know the principals and could easily get an update on their status and plans .
i will not be in tomorrow morning , but should you wish to discuss this e - mail , feel free to call me on my cell phone @ 713 - 825 - 2643 .
fw : bistineau
louise ,
this is the email written by paul bienawski regarding a potential aquisition of bistineau . you had mentioned an interest in seeing this email last week .
mrha
- - - - - original message - - - - -
from : bieniawski , paul
sent : thursday , august 23 , 2001 9 : 54 pm
to : miller , don ( asset mktg )
cc : mrha , jean ; gregory , paul
subject : bistineau
importance : high
don ,
this is a long e - mail and i apologize for that but since we have not had a chance to talk , i wanted to send you some information on bistineau as well as the latest output from the storage group ' s m & a analysis .
the m & a analysis was just updated as they have been several reservoir transactions in the past few months ( aec @ manchester , atmos @ east diamond , and aquila @ lodi ) . prior to these transactions we did not have enough data points to draw meaningful conclusions about the trends in reservoir acquisition .
i have attached the output for your review but i think a couple of points are key .
the reservoir curve is " hockey - sticking " just as the salt curve did previously . while not as dramatic as salt , the premiums are increasing dramatically .
the market is not placing a premium on optionality . salt is inherently more flexible than a reservoir , yet on a deliverability basis , there does not appear to be a significant difference . that may explain why we see players who do value optionality in the marketplace ( aquila , aec , duke , etc ) . these companies have long established asset based storage groups and actively trade around these assets .
as far as bistineau is concerned , there are several points worth highlighting . i have attached output from the database maintained by the storage group for your reference . i have not included caverns but we do have that data .
reliant energy is part owner of the facility . reliant is aggressively trying to build a merchant storage business . my group has bumped into them several times in the marketplace .
since the facility is federally regulated , reliant and koch would be required to make a nga 7 ( b ) filing to abandon the services they provide their customers before anyone could purchase the reservoir . the length of this process would be a function of the number of intervenors .
bistineau is a very large reservoir with a large amount of native base gas . how much of this volume is recoverable ( and therefore monetizable ) is a large question mark .
relative to its peers , bistineau is a poor performer in terms of flexibility ( low injection capabilities )
koch has , in the past , written off losses at bistineau . the low injection rate may be as a result of this . i have not researched the exact amount of the losses but a seach of ferc filings would reveal the nature and extent of the losses . epps likewise has had some loss problems .
if enron ' s intent is to establish a storage asset position in louisiana , south downsville would probably be the best candidate . the field is privately held , under development , has many interconnects , and acquisition would probably meet little resistance given the lack of customers .
while i have not communicated with matrix in some time , i do know the principals and could easily get an update on their status and plans .
i will not be in tomorrow morning , but should you wish to discuss this e - mail , feel free to call me on my cell phone @ 713 - 825 - 2643 .