EnCana plans to increase drilling north of I-70 | PostIndependent.com

EnCana plans to increase drilling north of I-70

Dennis Webb

EnCana Oil & Gas expects to drill about 450 wells in the Piceance Basin next year, according to a company official.That plan includes a “big step up” in drilling in EnCana’s north Piceance operations, said Doug Jones, of EnCana’s Southern Rockies Business Unit, which consists of Colorado and Utah.EnCana is the leading natural gas producer in Garfield County, where about a fifth of all of Colorado’s natural gas production now occurs. The county’s gas production now is worth about $1 billion per year.Industry officials and regulators have estimated that the total number of natural gas drilling permits issued in the county could exceed 700 this year, and that as many as 1,000 wells per year might be drilled in the county in the next decade.EnCana is relatively new to the county. It came to western Colorado several years ago when it bought a gas field from Ballard Petroleum.It has focused its local efforts on that field, Mamm Creek, south of Rifle and Silt. It now has at least 800 wells there.EnCana has been drilling about 300 wells per year at Mamm Creek in the past few years, and plans to drill about the same number next year.However, it also expects to drill about 150 wells in its north Piceance Basin operations, which it generally defines as those north of Interstate 70.The Piceance Basin, a rich cluster of natural gas fields and oil shale deposits, is centered in Garfield and Rio Blanco counties.Up to now, much of EnCana’s work in the northern part of that basin has been in Rio Blanco County, said Doug Dennison, Garfield County’s oil and gas auditor.Earlier this year, EnCana bought 48,000 acres in western Garfield County and in Rio Blanco County from Union Oil Co. of California, or Unocal for short. Unocal had once hoped to develop the land’s oil shale reserves, but EnCana purchased it with natural gas development in mind instead.EnCana also expects to drill about 30 to 50 wells next year in the Paradox Basin in southwestern Colorado, Jones said.EnCana now employs about 500 people in Denver, Jones said. Its employment there had been about 335 people before its acquisition of Tom Brown Inc. earlier this year.Even more people work on EnCana operations in the Mamm Creek field. Jones said employment there can total 750 people on some days. Many of them work as contractors rather than EnCana employees.High natural gas prices have contributed to the local drilling boom by EnCana and other companies. However, Jones said that even if gas prices drop significantly, EnCana still could make a profit drilling locally.Local gas reserves are in nonconventional fields made up of tight sand formations that are more difficult to drill successfully. When EnCana entered the local market, wells here were averaging about 0.7 billion cubic feet of gas production over their lifetimes. Thanks to technological advances, that production has since doubled, Jones said.That had made the drilling investment more worthwhile, even when prices haven’t been as strong.Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com

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