EnCana plans 200 wells
GSPI Managing Editor
EnCana Oil and Gas plans to drill about 200 natural gas wells this year in the Mamm Creek and Divide Creek area south of Silt and Rifle.
That’s more than twice the 90 wells the company drilled in 2002, and a dramatic step up in local activity for the $30 billion energy exploration company based in Calgary, Alberta.
The company plans to put up to 14 or 15 drill rigs to work, again, more than twice the number the company activated for much of 2002, according to EnCana’s Piceance Basin Team Leader Joel Fox.
“Each well costs $1 million to $1.5 million to drill into the Mesa Verde formation,” Fox said. So EnCana’s 2003 drilling program, which still awaits approval by its corporate board, could result in $200 million to $300 million in spending, he said.
EnCana’s drilling boost comes at a handy time for the contracting companies that rely on gas drilling in Western Garfield County.
Williams Production Co., the county’s biggest gas producer and, until now, its most active driller, expects to sharply reduce drilling activity until the fourth quarter of 2003, said Steve Soychak, the company’s Parachute field manager.
“Overall, we had a record year in 2002,” Soychak said. “But the company has decided to conserve cash and cut back on the capital program for eight or nine months.”
Williams suffered financial losses in the wake of the Enron collapse.
“The good news is that most of the rigs we’ve dropped will be picked up by EnCana, and the contract workers will shift over,” Soychak said.
The shift in dominant market players comes at the close of another record year for gas drilling in Garfield County, according to the Colorado Oil and Gas Conservation Commission.
The agency issued permits for 362 wells in 2002, a slight increase from the earlier record of 353 issued in 2001, said deputy director Brian Macke.
Fox said most of the wells will be drilled using the directional drilling methods, using one well pad to drill into four or five well sites over a period of two to three months.
Much of the gas will be sold in western Colorado, he said, but excess gas will be shipped out on pipelines to markets in the West and Midwest.
At present, EnCana’s wells produce 110 million to 115 million cubic feet of natural gas a day.
Williams’ 740 wells are producing 223 million cubic feet a day. Over a year of production, that’s enough natural gas for 600,000 homes, Soychak said.
Area residents, landowners and government officials will have a chance to meet with gas industry representatives when the Northwest Colorado Oil and Gas Forum convenes at 10 a.m. on Thursday, Feb. 20, at Rifle City Hall. The meeting is open to everyone.
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