Calpine Acquires Vintage Petroleum's Natural Gas Reserves in California

Strategic Insights -

Calpine, a leading independent power company, has made a strategic move to acquire 90 billion cubic feet of proven natural gas reserves from Tulsa-based Vintage Petroleum for approximately $71.5 million. This acquisition has positioned Calpine as one of the largest natural gas producers in California's Sacramento Basin. The Vintage reserves currently produce about 14.3 million cubic feet per day, which will significantly lower fuel costs for Calpine's northern California natural gas-fired plants and increase the company's competitive advantage in the deregulated electric power industry.

Key Takeaways:

  • Calpine has acquired 90 billion cubic feet of proven natural gas reserves from Vintage Petroleum for $71.5 million.
  • The acquisition includes the remaining 58% interest in the Rio Vista Gas Unit and certain deep rights to Calpine's northern California gas portfolio.
  • The Vintage reserves currently produce about 14.3 million cubic feet per day.
  • The Rio Vista field, located 50 miles northeast of San Francisco, has produced 3.1 trillion cubic feet of gas since its discovery in 1936.
  • The acquisition will lower fuel costs for Calpine's northern California natural gas-fired plants and increase the company's competitive advantage in the newly deregulated electric power industry.
  • Bill Berligen, senior vice president of Calpine, commented on the acquisition, stating that it will "help lower fuel costs for Calpine's northern California natural gas-fired plants and will increase our competitive advantage in today's newly deregulated electric power industry."
  • With this acquisition, Calpine's daily production in the Sacramento Basin totals 43.3 MMcf/d, enough fuel to serve a new, 250-megawatt combined-cycle power plant.
  • Calpine is a San Jose, California-based independent power company with interests in approximately 10,800 MW of capacity in 15 states.
  • The nearby reserves give Calpine access to low-cost gas supplies and enable the company to reduce fuel transportation costs.
  • The $41 million purchase of Sheridan Energy gave Calpine access to about 148 Bcf equivalent of proven reserves.
  • Calpine's new gas properties in Texas overlap with about 3,000 MW of new gas-fired capacity that's already under development.

Statistics:

  • 90 billion cubic feet of proven natural gas reserves acquired by Calpine from Vintage Petroleum.
  • $71.5 million paid for the acquisition of Vintage Petroleum's natural gas reserves.
  • 14.3 million cubic feet per day produced by the Vintage reserves.
  • 3.1 trillion cubic feet of gas produced from the Rio Vista field since its discovery in 1936.
  • 43.3 MMcf/d total daily production in the Sacramento Basin by Calpine.
  • 250-megawatt combined-cycle power plant that can be served by Calpine's daily production.
  • 10,800 MW of capacity in 15 states controlled by Calpine.
  • 148 Bcf equivalent of proven reserves acquired by Calpine through the purchase of Sheridan Energy.
  • 3,000 MW of new gas-fired capacity in Texas overlapping with Calpine's new gas properties.

Sources:

  • [Source: Calpine press release (date unknown)]
  • [Source: Bill Berligen, senior vice president of Calpine (statement dated September 1999)]