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Williams Production forecasts more wells

Williams Production expects to drill hundreds more wells than previously forecast in western Garfield County in the next few years thanks to a new contract giving it access to 10 environmentally friendly wells.The development also will mean hundreds of new jobs and hundreds of millions of dollars in new investment in the region, said Steve Soychak, district manager for Williams in Parachute.Williams announced this week that it has contracted with Helmerich & Payne Inc. to use 10 of the contract drilling company’s new FlexRig4 rigs for the next three years. The rigs can drill up to 22 wells directionally from one well pad that is half the size of traditional pads, the two companies say. That’s nearly three times as many as Williams typically can drill from a pad.The contract, expected to be worth more than $200 million, means Williams will average about 20 rigs in the Piceance Basin in 2006 and 22 in 2007, compared to 13 now. Williams expects to remain on pace to drill about 300 wells this year in the Piceance Basin, which is centered in western Garfield County. However, the contract means it may drill up to 450 wells next year, as opposed to the 325 previously projected. Its projection for 2007 is now as many as 500 wells, up from an estimate of 350.Helmerich & Payne owns 91 U.S. land rigs, 11 U.S. platform rigs in the Gulf of Mexico, and 26 rigs in South America. It is building new rigs specifically to perform efficiently in the Piceance Basin, so Williams expects to be able to drill wells faster. The rigs are expected to first be available in November, and then at a rate of about one per month.Williams is increasing its plans for capital spending in exploration and production by about $430 million between 2005-07, mostly for the expanded Piceance Basin work, Soychak said. About $400 million of the increase will be split equally between 2006 and 2007, the company said.About three-quarters of the spending will go toward drilling, and the rest toward expanded gathering and processing facilities in the Piceance Basin.Soychak said he expects the expanded drilling will boost local employment by 300-400 jobs. Williams currently employs about 800 people in the Piceance Basin, including about 70 staff. The remainder consists of contractors.Williams’ new drilling plans are centered in Garfield County, but will include some work in Rio Blanco County, Soychak said.Much of the drilling will involve returning to previously drilled areas and increasing underground drilling density to one well per 10 acres.”We’ve had pretty good success on our 10-acre drilling program out here, so a lot of it will be going back to existing pads and existing fields, and existing infrastructure,” Soychak said.He said the new rigs allow for more directional drilling because each well can be drilled only 7.5 feet from an adjacent one at the surface. Currently, directionally drilled wells are spaced 15 feet apart at the surface.The new rigs will be set up on tracks and a skid system will allow them to be moved to each new well hole without laying down the derrick, which requires more well pad space. The rigs are designed for drilling in a spoke formation underground. The derrick height probably will be the same as for current rigs, Soychak said. Williams also is trying to bring in an Italians rig that is half the size of traditional ones, to reduce the visual impact of drilling.The newly contracted rigs will use an enclosed drilling mud system, which will mean that if a mud pit is needed, it will be of a smaller size, Soychak said.The rigs will spin drilling pipes from the top of the derrick rather than via a rotary table at the rig base. Soychak said they also can spin the drilling pipes out of the hole, which makes the pipe easier to pull up, particularly given the extra friction that results from pipe being routed down directional holes that have bends in them.Soychak said the rigs also are safer and more efficient, making use of an “iron roughneck” that allows one person rather than two or three to assemble lengths of pipe.Williams rivals EnCana Oil & Gas as Garfield County’s largest gas producer. Soychak said Williams now produces about 340 million cubic feet per day in the Piceance Basin, with most of that occurring in Garfield County. At last report, EnCana was producing about 350 million cubic feet per day locally, he said. Williams recently contracted with Wyoming Interstate Co. to ship up to 350 million cubic feet per day via a pipeline that company is expanding. That expansion is scheduled to go into service in early 2006.As a result of its accelerated drilling plans, Williams increased its profit projections for its exploration and production business by $30 million in 2006 and $50 million in 2007.As of the end of last year, 61 percent of Williams’ of the company’s proven domestic reserves of 3 trillion cubic feet were in the Piceance Basin. More than half of its estimated 7 tcf of proven, probable and possible reserves are located in the basin.Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com


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