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Red Fork hooks up Osage gas



By Upstream staff 

Australia’s Red Fork Energy has bolstered its infrastructure in Oklahoma with an agreement giving it further access to the gas spot market in the US for the Osage project.

The outfit has struck terms for a deal with a regional gas transmission company to build a tap that will connect Red Fork’s 100% Osage project to a gas transmission line. The agreement enables gas produced from the Osage project to be sold into the spot market.

All of the company’s current production, cash flow, and proven and probable reserves of 36.4 billion cubic feet are coming from the project, which covers 5000 acres and represents 11% of the company’s entire holding.

Gas produced from Osage is currently sold through a third party “gathering contract” and Red Fork receives a percentage of the spot price through this arrangement.

The outfit expects the tap and related infrastructure to be installed and operating by the end of the September quarter.

Red Fork had previously intended to sell gas produced from the Osage project in the spot market, through the investment of a gathering and pipeline system, but the outfit decided against this $350,000 option.


Tuesday, 15 April, 2008, 05:04 GMT  | last updated: Tuesday, 15 April, 2008, 07:53 GMT

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