WPX to run three rigs in Garfield, Rio Blanco this year
WPX Energy is scaling back on the number of drilling rigs that will be operating in the Piceance Basin, from a high of nine at one point last year to just three this year.
The company, which is both Garfield County’s and Colorado’s largest natural gas producer, plans to invest another $200 million to $225 million in its Western Slope operations, according to its annual drilling plan announced Thursday.
Throughout WPX’s operating areas in Colorado, New Mexico and North Dakota, the 2015 plan calls for operating six rigs and investing $725 million. That’s down from 16 rigs and $1.5 billion in investments last year.
The drilling plan announcement comes on the heals of a decision last month to halt completions on recently drilled wells in the Piceance, including those in Garfield County. The decision was based on the current low commodity price for natural gas.
That policy is still in place, until the economics of completing the wells and taking them to full production are in line, WPX spokesman Jeff Kirtland said.
WPX reached a peak of nine rigs operating in the Piceance last year, and was still running eight in January, Kirtland said.
One of the rigs that will continue to operate this year will be focused on the Niobrara shale in the northern reaches of Parachute Creek, where WPX had a large discovery a couple of years ago.
“Most of the wells in that formation have been drilled in Garfield County, but we’re still trying to delineate where the Niobrara extends,” he said. “That’s part of what we’re trying to discover with our efforts this year.”
The remaining two drill rigs will continue to concentrate on the Mesa Verde shale formation in both Garfield and Rio Blanco counties, he said.
This year’s investment reflects WPX’s commitment to the Piceance Basin, according to statement posted to the company’s website announcing its plans for the year.
“Since the early 2000s, we have invested more than $10 billion in the region through our capital spending and the taxes and royalties we pay,” the statement said.
WPX operates more than 4,500 wells in western Colorado. Those wells produce enough natural gas to meet the energy needs of about 3 million homes per day, according to the company’s statement.
If prices rebound, “We’ll stay primed to accelerate development, even as we take appropriate steps to respond to current prices,” company CEO Rick Muncrief said in the statement.
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