US-based oil and gas companies continue to report their capital spending plans for 2006. Some of the more recent announcements include:
• The $830 million 2006 capital program of Southwestern Energy Co., Houston, will include $338 million for the Mississippian Fayetteville shale gas play in the Arkoma basin in Arkansas (OGJ, Sept. 19, 2005, Newsletter).
• Range Resources Corp., Fort Worth, has set a capital budget of $429 million for 2006, excluding acquisitions, up 32% from expected spending in 2005.
• Exploration Co., San Antonio, has set a record $40-50 million capital budget for 2006 and warned that rig availability might dictate revisions.
• Endeavour International Corp., Houston, is budgeting $50 million for oil and gas exploration and development in the North Sea and the Netherlands in 2006.
• Teton Energy Corp., Denver, has approved a $12 million 2006 capital budget focusing on drilling in two Rocky Mountain areas.
In other recent company news:
• Petro-Canada agreed to sell its 38% stake in a joint venture involving production in Syria to India’s Oil & Natural Gas Corp. and China National Petroleum Corp. for $676 million (Can.).
• Royal Dutch Shell PLC agreed to sell its retail business in Educador to Primax SA. Terms of the pending transaction, which involves 60 retail outlets, were kept confidential.
• Pride International Inc. acquired from Angola’s state-owned Sonangol an additional 40% interest in a joint venture owning drillships and platform rigs. The purchase price was $175 million.
• Trident Exploration Corp. agreed to acquire the assets of Rakhit Petroleum Consulting Ltd., Calgary.
• Wentworth Energy Inc., Fort Worth, acquired 1,900 acres of oil sand leases in Utah’s Asphalt Ridge oil sands region. The properties are 3.5 miles southwest of Vernal.
• Superior Oil & Gas Co., Yukon, Okla., will pay Foster Oil & Gas 300,000 shares of stock to acquire 28 natural gas wells in the Cherokee basin of southeastern Kansas and northeastern Oklahoma.
Fayetteville drilling hike
Southwestern Energy’s total program is a 66% increase from forecast 2005 outlays and includes $770 million in E&P spending.
The Fayetteville shale sum provides for the drilling of 175-200 wells, nearly all of them horizontal.
Southwestern Energy will spend $196 million in East Texas on as many as 83 wells at Overton field in Smith County and as many as 16 wells in its Angelina River Trend in Nacogdoches County. It will spend $90 million to drill 100-110 conventional Arkoma basin wells, 55-60 of which will be in the Ranger Anticline area of Yell County, Ark.
Other E&P outlays are for Permian basin $15.9 million, onshore Gulf Coast $8.6 million, and exploration and new ventures $43.4 million.
Range Resources
Range Resources earmarked $358 million for drilling and recompletions, $38 million for land, $18 million for seismic operations, and $15 million for the expansion and enhancement of gathering systems and facilities.
The drilling and recompletion investment will be divided 85% to development and exploitation activities and 15% to exploration.
Range expects to drill 1,096 gross (802 net) wells and to conduct 63 gross (44 net) recompletions. About 46% of the budget is allocated to the Appalachian region and the Southwest, which includes the Permian basin, the Midcontinent, and East Texas. The remaining 8% is for the Gulf Coast.
About 75% of the 2006 budget will be funded from internal cash flow, Range said. It estimates 2005 capital spending, excluding acquisitions, at $324 million.
Exploration Co.
Exploration Co.’s regular budget is up 40% from 2005 spending, and the company is planning a capital expenditure expansion aimed at pursuing the Barnett and Woodford shale plays. This would be its first exploration and development activities in the Marfa basin.
The budget also calls for participating in 57 gross wells, with $23 million going for 28 planned Glen Rose wells and $8 million for eight EnCana Corp.-operated Pearsall wells.
Ten Georgetown wells are to take $6.6 million, and 10 wells in the Pena Creek field San Miguel oil play drew $3 million.
The budget includes outlays for more pilot wells in the San Miguel tar sand play, a 3D seismic survey on the Burr lease, Pena Creek waterflood improvements, and lease acquisitions (OGJ Online, Dec. 9, 2005).
Endeavour’s budget
Endeavour’s budget covers a 10-well drilling program begun in 2005, nearly 75% of which will cover exploration and exploitation projects in the UK’s North Sea sector. About $12 million is allocated for Norway’s sector, and the remainder will be used to expand Endeavour’s exploration program into the Netherlands.
Endeavour Energy UK Ltd.’s UK North Sea projects include continued drilling on the Turriff and Tulliallan prospects, which it operates with a 60% interest. It has tested two prospects from a single well bore drilled on Block 31/26b in the Central Graben area. The Turriff well tested a Jurassic Fulmar sandstone. A shallower secondary prospect Tulliallan, which was aimed at a Cretaceous target, did not encounter reservoir-quality rock and has been sealed and abandoned.
The company also will sign a farmin agreement covering two blocks in the southern gas basin and will begin drilling the first 2006 exploratory well in January. Endeavour holds a 12.5% working interest in the well-the first of six planned as continuation of the 2005 campaign. Two wells drilled in the southern gas basin in 2005-one in the Prometheus prospect on Blocks 42/21 and 42/22 and one in the Fiacre prospect on Block 23/11 (N)-found no commercial hydrocarbons.
Norwegian North Sea projects include exploration on two production licenses awarded in 2005. Endeavour Energy Norge AS was named operator with 50% interest in PL 354, which encompasses four blocks in the greater Ekofisk area. The area, in the southernmost part of the Norwegian North Sea, is adjacent to Endeavour’s Blocks 31/26b, 31/21b, and 31/27b on the UK Continental Shelf. The second license, PL 363, is further north, on Block 25/5 and east of the Alvheim development area. Endeavour will hold a 40% interest in that license.
In additional to the exploration budget, $11.6 million will be allotted for the purchase of an 8% interest in Enoch field from Petro-Canada UK Ltd. on Block 16/13a on the UK Continental Shelf North Sea-a transaction expected to close in first quarter, 2006. Production from that project, expected to begin in fourth quarter, 2006, will be tied back to Brae field 9 miles to the northwest. Paladin Expro Ltd. is operator of the field with a 24% interest.
Teton Energy
Teton plans to participate in 20 wells on 6,000 gross acres northwest of Grand Valley field in the Piceance basin held by Piceance Gas Resources LLC, in which Teton acquired a 25% interest this year (OGJ, May 2, 2005, p. 58).
Teton also plans at least five wells starting in the first quarter of 2006 in 192,000 acres in which it holds a 100% interest in the eastern Denver-Julesburg basin.
Petro-Canada’s Syrian stake
Petro-Canada’s sale of its Syrian JV stake, expected to close early this year, remains subject to Syrian government consent. Petro-Canada plans to continue exploration in Syria.
Earlier this year, Petro-Canada opened a data room in London regarding its nonoperated interest in Al Furat Petroleum (OGJ Online, Sept. 28, 2005).
Royal Dutch Shell PLC operated Al Furat. Petro-Canada’s share represents 58,000 boe/d before royalties. Production from the mature fields is declining, Petro-Canada noted.
The joint venture has 220 wells in 36 fields in eastern Syria and accounts for less than half of the country’s production.
Primax in Ecuador
Subject to regulatory approvals, Shell’s sale to Primax is expected to close early this year. Shell retained its lubricants and bitumen businesses in Ecuador.
Primax is a joint venture owned by ENAP Refinerías SA, a subsidiary of Chile’s state-owned Empresa Nacional del Petróleo, and by Romero Trading SA, the trading division of the Romero Group in Peru.
In August 2004, Primax acquired Shell’s fuels business in Peru.
Pride in Angola
Pride International of Houston now owns 91% of the joint venture, and Sonangol owns 9%.
The joint venture owns the ultradeepwater drillships Pride Africa and Pride Angola and the 300-ft independent-leg cantilever jack up Pride Cabinda.
It also holds management agreements for the deepwater platform rigs Kizomba A and Kizomba B.
Trident buys consultancy
Trident’s acquisition, effective Jan. 1, will include all of Rakhit Consulting’s North American nonconfidential studies, technology, and proprietary software. Rakhit Consulting will complete its remaining consulting and multiclient study obligations and support current clients through Jan. 31, 2006.
Kaush Rakhit, president of Rakhit Consulting, will become vice-president of Trident responsible for new exploration initiatives. Fifteen of Rakhit Consulting’s geotechnical personnel will also join Trident.
Canadian Discovery Ltd., a subsidiary of Rakhit Consulting, will become an independent operating entity with no relationship to Trident.
Trident, founded in 2000 to focus on exploration and development of gas from coal seams in western Canada, participates in the Horseshoe Canyon and Mannville coal plays in Alberta.
Wentworth buys Utah leases
Wentworth acquired the Utah leases for cash with the seller retaining a 5% overriding royalty interest in the leases. Wentworth did not disclose the seller’s identity or what it paid for the leases.
Wentworth Energy Chairman and Chief Executive Officer John Punzo said the goal is to identify appropriate extraction technologies and bring the oil sand leases to production. In addition, these leases also are believed to contain conventional oil and gas reserves.
The company has a diverse portfolio of low risk energy projects, including projects in the Barnett shale.
Superior buys gas wells
The wells being acquired by Superior, which lie in the Chautauqua, Montgomery, and Elk counties, produce conventional gas and coalbed methane. Nine currently produce at a combined rate of 110 Mcfd.
Three await installation of pump jacks. The remaining 16 producers, shut in earlier due to low gas prices, require workover. ✦