TITLE
Recommendation to approve and adopt the Long Beach Unit Program Plan (July 2005 - June 2010) and Long Beach Unit Annual Plan
(July 1, 2005 - June 30, 2006). (Citywide)
DISCUSSION
In accordance with Chapter 138, California Legislature, 1964 First Extraordinary Session, an Annual Plan of Development and Operations and Budget for the Long Beach Unit (LBU) must be adopted by the City of Long Beach and approved by the State Lands Commission (SLC). Chapter 941, California Legislature, 1991 Sessions, amended Chapter 138 and allowed for the creation of the Agreement for Implementation of an Optimized Waterflood Program (OWPA). The OWPA is an investment and oil development plan for the Long Beach Unit and requires the City and the Contractor, Oxy Long Beach, Inc. (OLBI), to prepare a five-year plan of development (Program Plan) and to review and replace this plan every two years. Also required is the preparation of a one-year plan (Annual Plan), which consists of the applicable portion of the Program Plan plus an itemized budget of intended expenditures. Preparation of the Program and Annual Plans (Plans) is a joint effort by the staffs of the City of Long Beach, Department of Oil Properties (Unit Operator), OLBI (Field Contractor), and Thums Long Beach Company (Agent for Field Contractor).
Copies of the Plans are attached.
Assuming an average oil price of $28 per barrel for the first two years and $23 per barrel for the last three years and an average gas price of $5.50 per thousand cubic feet the first year, $4.50 per thousand cubic feet the second year and $4.00 per thousand cubic feet the last three years, total net income from the Long Beach Unit is estimated to be $362,500,000 in the five-year Program Plan and $73,800,000 in the Fiscal Year 2005-06 Annual Plan. Expenses are estimated to total $1,153,700,000 and $272,000,000 for the Program Plan and Annual Plan, respectively.
This item was reviewed by Deputy City Attorney Charles Parkin on February 22, 200...
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