Daily Energy Digest - 9/9/2010

• $HTM U.S. Geothermal announced yesterday it entered into a strategic and financial partnership with Enbridge ($ENB). Enbridge will invest US$23.8 mln into the company for a 20% direct ownership stake in the 22 MWe Neal Hot Springs Phase 1 project. Enbridge will also gain 24% of the U.S. ITC cash grant upon commissioning of the project in 2012
• $MRO Marathon Oil Corp. said Wednesday it expects peak production at an oil rig in the Gulf of Mexico to be less than previously anticipated. The energy company's Droshky development, which began operating in July, consists of four wells about 3,000 feet under water and about 160 miles southwest of New Orleans.

  The wells have been producing about 45,000 net barrels of oil equivalent a day. That includes 39,000 barrels a day of liquid hydrocarbons and 39 million cubic feet a day of natural gas. Three of the four wells are producing at better-than-expected levels, but production from the fourth well has been delayed due to an equipment issue, the company said. Marathon plans to repair the well in the first quarter of next year. As a result, the company now expects the Droshky wells to produce at a peak rate of about 45,000 net barrels of oil equivalent a day. That's 5,000 net barrels of oil equivalent a day less than Marathon had originally projected. Despite the lower production, Marathon said its previous guidance for available production for sale in the third quarter remains unchanged at 385,000 to 405,000 net barrels of oil equivalent a day.

• Global Partners ($GLP) closes first of two-part acquisition. Global announced it has completed its acquisition of 148 dealer-operated Mobil stations as well as the supply rights for an additional 31 Mobil stations owned and operated by independent Mobil dealers. Global expects to close the second part of the acquisition by the end of the month, which consists of 42 Mobil-branded stations directly operated by ExxonMobil (XOM/$60.75/Outperform). The partnership intends to finance the $200 million acquisition using its recently refinanced $1.15 billion senior secured credit facility due 2014. The acquisition could contribute ~$30 million in cash flow (net of ~$6 million in annual maintenance cap ex), which implies a favorable ~6-7x purchase multiple. When factoring in ~$15 million in associated financing costs, incremental distributable cash flow should approximate ~$15 million in 2011.

• Targa Resources Investments Inc., the owner of Targa Resources Partners' ($NGLS) general partner, files for ~$300 million IPO. Targa Resources Investments Inc., the indirect parent of Targa Resources Partners LP, announced today that it intends to become a publicly traded corporation under the ticker $TRGP. TRGP currently holds a 100% ownership interest in the general partner of Targa Resources Partners and a 15.1% limited partner interest in the partnership. The company's only operating asset is a ~77% ownership interest in Venice Energy Services Company LLC (VESCO), a cryogenic natural gas processing plant located in Plaquemines Parish, Louisiana. The company intends to sell this asset to Targa Resources Partners prior to the closing of the IPO.