SOURCE: AXcess News

June 29, 2005 06:00 ET

Energy Bill Passes Senate, Fueling Domestic Production

NEW YORK, NY -- (MARKET WIRE) -- June 29, 2005 -- AXcess News has released a story covering the US Senate’s passing of an energy bill that holds hope for alternative energy as a means of curbing the country’s dependence on foreign oil. But domestic oil and gas producers have already expanded production, especially amongst the junior oil and gas companies whose share prices have yet to catch up with their development.

Tuesday, the US Senate approved legislation revamping the nation's energy policy. The energy bill, which was approved overwhelmingly by an 85 to 12 vote by lawmakers, aims to reduce US dependence on foreign oil.

Senator Jeff Bingaman, a New Mexico Democrat who co-sponsored the legislation, told reporters that the energy bill will not bring down prices at the pump for consumers. "In the long term, it puts in place good policies that will move us in a direction that will be very beneficial to consumers, industry and America in general," said Bingaman.

The bill provides incentives to build nuclear power plants and requires utilities by 2010 to produce no less than 10 percent of the electricity generated through alternative energy sources like solar, wind or biomass fuels.

Republicans and Democrats have yet to reach an accord on the energy bill as it moves to the House of Representatives. At dispute is liability protection for makers of the gasoline additive MTBE that the House passed in April in its energy bill, which the Senate balked over.

Environmental advocates have also been at odds with lawmakers over drilling in fragile eco areas, such as off the coastal waters of California and in Alaska. Lawmakers want oil and gas exploration and production companies to have freer access to drill while environmentalists argue that the risks are too great.

Standing in the middle of those actions are the often overlooked smaller North American domestic exploration and production companies, commonly referred to as "juniors." But with lofty prices and strong demand, some of these junior oil companies are outpacing their larger peers, though the market has yet to realize it.

Patch International Inc. (OTC BB: PAII) reported Tuesday morning that it secured a drill rig and would begin drilling at Big Bear Canyon where it holds a 25% stake in the natural gas field. Patch, a fairly new player in the energy-rich W5M (West of the 5th Meridian) field located near the town of Edison, Alberta, had participated in drilling programs that produced results strong enough that the operator expects to complete a commercial gas well "as soon as possible." Four other zones also showed commercially viable production capabilities.

Meanwhile, Patch is aggressively exploring more production wells and hopes to take advantage of a future $1.7 billion dollar pipeline project by TransCanada that will ship 400,000bpd to the Illinois market from Hardisty, Alberta. TransCanada is awaiting regulatory approval from Canadian and US agencies before construction can begin. For junior energy producers like Patch, the ability to transport oil and gas directly to US markets will be a boom to its shareholders as properties come into production.

Peerless Energy Inc. (TSX-V: PRY.A) (TSX-V: PRY.B), another junior energy company AXcess News reported on when OPEC announced that it would up production on June 15, had recently raised CA$10 million for its exploration and development on properties in the same region as Patch International. The company saw its share price spike dramatically following its funding, however news from the junior energy producer has not been forthcoming lately. According to the Toronto Stock Exchange it was delinquent in its filing.

Peerless has managed to hold its market price near CA$3.00 while Patch gave ground closing Tuesday at $0.93, off 5 cents, or 4.62%. While Peerless has more cash, Patch seems to be developing more properties, though the market has yet to discover that. As junior energy companies go, these two remain ones to watch.

About AXcess News

AXcess News is an online news publisher in the USA covering news in 92 major cities through its own network of news web sites. We are displaying this article in the hopes of building greater readership and to promote our news brand. To view news stories published by AXcess News, please go to http://www.axcessnews.com. Thank you.

Contact Information