Williams Cos., Tulsa, plans to ramp up drilling in the Piceance basin at the end of 2005 as it fields new purpose-built rigs in Garfield and Rio Blanco counties, Colo.
The company’s 2005 plan calls for the drilling of 300 wells in the Piceance basin, where Williams is exploiting gas in Cretaceous Williams Fork coals and Mesaverde tight sands.
The company let 3-year contracts to keep busy 10 FlexRig rotary rigs to be built by Helmerich & Payne Inc., Tulsa, Okla., the first of which is to take to the field near the end of 2005.
Delivery of one new rig about every 30 days will allow Williams to drill 450 wells instead of 325 in 2006 and as many as 500 vs. 350 in 2007.
To fund the programs, Williams added $430 million to its planned E&P capital spending in 2005-07, with $400 million of that divided equally between 2006 and 2007. About 25% of the total will go to expand gathering and processing facilities.
The rigs are designed to drill as many as 22 wells to 6,000-12,000 ft from a pad half the size of a traditional drillsite.
H&P said the contract should generate $200 million and is the largest construction and rig services project for a single customer in the company’s 85 years. It provides for a stated day rate plus contingent incentive payments.
The Piceance basin, where Williams employs 13 rigs owned by other drilling contractors, held 61% of Williams’s 3 tcfe of proved US reserves at the end of 2004.
The company’s net production exceeds 250 MMcfd from the basin.
Almost all of the new wells are to be drilled in established areas of the Piceance Valley, site of 74,000 acres of the 144,000 net acres Williams holds in the basin. The company is downspacing the gas fields to 10-20 acres/well.
The company in late 2004 said it had cut drilling time from spud to rig release to 15 days/well in 2003 from 30 days in 1994 and expected further efficiency in 2004. A typical well goes to 7,100 ft, costs $1.15 million, and recovers 1.3 bcf of gas. ✦
