By OGJ editors
HOUSTON, Sept. 17 -- Operating costs at oil and natural gas fields in western Canada continue to rise, but producers can cut costs and maximize cash flow through better energy management programs, said Ziff Energy Group, Calgary.
In its 2002 study of 195 oil and gas fields in western Canada, Ziff reported that average oil operating costs increased 9% to $6.50 (Can.)/boe in 2001 from $6.10 (Can.)/boe in 2000. For gas, the average cost increased 18% to 69¢/Mcfe in 2001 from 58¢/Mcfe in 2000.
Energy costs for electricity and natural gas increased by 38% for gas and 32% for oil. The cost of many services also increased, raising the total cost of repairs and maintenance 33% for gas and 11% for oil.
All other operating costs—including field overheads, contract services, trucking, and third party processing—rose 3% for gas but fell 4% for oil.
For 2 years, Ziff CEO Paul Ziff has urged US and Canadian clients to manage their energy use more efficiently. "Those who did were prepared, while many others continue to be stressed by the full impact of high costs," he said.
He expects that volatility in energy costs will continue for several years. "Alert knowledgeable managers will be able to outperform industry averages," he said.
The year ahead will present challenges for producers seeking to maximize cash flow, Ziff said.
"Reducing operating costs is the quickest lever for producers, and some proactive companies are reviewing the operating cost of every property they operate," he said.