By the OGJ Online Staff
HOUSTON, Jan. 21 -- PanCanadian Energy Corp., Calgary, approved the second biggest budget in its history, $1.7 billion (Can.), to fund production growth from Canada's Western basin and reserve growth in offshore and international projects in 2002.
"The company remains focused on two key strategic thrusts -- North American natural gas and international oil," said Pres. Michael A. Grandin. "With this level of investment, we expect to grow our North American natural gas production by 10% in 2002. We also expect to add more than 200 million boe, thus growing our proven reserves by about 10% -- despite the shift in expenditures from the Western basin to major projects in the East Coast offshore, the United Kingdom Central North Sea, and the deepwater Gulf of Mexico."
PanCanadian will spend $430 million on exploration and development off Canada's East Coast, in the deepwater Gulf of Mexico, and in the UK North Sea.
The new budget "will leave PanCanadian with the financial capacity to invest in its best onshore and offshore projects and to respond to opportunities as they arise," said company officials.
The company will spend $114 million on Deep Panuke field off Nova Scotia alone.
About 70% of PanCanadian's exploration and production capital investment will be targeted towards natural gas. Over the past 5 years, PanCanadian has grown its gas production at a compound annual rate of 9%.
However, PanCanadian expects its 2002 oil production to decline 5% over last year, given the company's focus on gas and the decision to reduce spending on conventional heavy oil in response to the lower crude prices and wider differentials. The company will continue its work on the Christina Lake oil sands development project, and expects Phase 1 to be commissioned by the end of the first quarter.
PanCanadian is moving forward with development of its coalbed methane properties, though it does not expect to produce any this year.
The company will drill 1,800 wells in 2002, down from 2,150 in 2001.
