By the OGJ Online Staff
HOUSTON, Oct. 8 -- Energy costs at western Canada oil and gas fields were a third higher last year and will continue to fluctuate in the next few years, said Ziff Energy Group, Calgary.
A survey of 200 producing fields found energy costs rose 33% for gas fields and 27% for oil fields from 1999.
CEO Paul Ziff said, "While some energy costs have backed off in 2001, we expect continued volatility."
The survey found oil field operating costs increased to $6.10/boe in 2000, up 30% from 1999 costs. Gas field operating costs rose to 58¢/Mcfe in 2000, up 39% from 1999.
"With the increase in activity as well as a buoyant drilling program, the cost of many services also increased, raising the total cost of repairs by 20% for gas and 35% for oil. All other operating costs, which includes field overheads, contract services, trucking, etc., rose by 28% for gas and 47% for oil."
Ziff added, "The year ahead will present more challenge for producers seeking to maximize cash flow (in some cases to avoid being taken over). Gas prices have plummeted from levels that were too high for certain markets, and oil prices are softening in the face of a significant economic slowdown past Sept. 11. Reducing operating costs is the quickest lever for producers, and some proactive companies are reviewing the operating cost of every property they operate."