GENERAL INTEREST — Quick Takes
Chevron announces $32.7 billion budget for 2012
Chevron Corp. announced a $32.7 billion capital and exploratory budget for 2012 compared with an estimated $28 billion capex investment for 2011.
The 2012 budget includes anticipated upstream spending of $28.5 billion. US investments are expected to total nearly $9 billion, with substantial outlays in the Gulf of Texas Coast region, California, US Midcontinent, and Pennsylvania.
John Watson, Chevron chairman and chief executive officer, said the 2012 spending program covers numerous multiyear projects currently in the construction phase, including Australian LNG projects and multiple deepwater developments.
"By 2017, we expect our net crude oil and natural gas production to grow about 20% to 3.3 million b/d," Watson said.
The estimated 2011 capital and exploratory expenditure total excluded the $3.2 billion Chevron paid for Atlas Energy Inc., an acquisition announced in late 2010. Chevron also assumed $1.1 billion in debt in that transaction.
Marathon targets most of budget for Eagle Ford
Marathon Oil Corp. announced a $4.8 billion capital expenditure budget for 2012, of which 65% is targeted to liquids-rich US assets including the South Texas Eagle Ford shale.
Clarence P. Cazalot Jr., Marathon Oil chairman, president, and chief executive officer, expects liquids-rich US plays will provide most of the firm's anticipated production growth during 2010-16.
The company plans to spend $900 million on its base exploration and production assets, which include operations in the Gulf of Mexico, Norway, US conventional oil and gas plays, Equatorial Guinea, the UK, and Libya.
Marathon Oil plans to drill 250-300 net wells (500-530 gross) during 2012.
Some $2.7 billion is allocated for the Eagle Ford shale, North Dakota's Bakken formation, the Anadarko Woodford shale in Oklahoma, and the emerging Niobrara shale formation within the DJ basin of southeast Wyoming and northern Colorado.
The company's plans for the Eagle Ford include ramping up to 17 rigs, drilling 155-170 net wells (200-210 gross). Marathon Oil also plans to add two more hydraulic fracturing crews, bringing the total to four by midyear 2012.
Marathon plans to drill 55-70 net wells (165-175 gross) in the Bakken, 25-35 net wells (75-80 gross) in the Anadarko Woodford, and 15-25 net wells (60-65 gross) in the Niobrara.
Earlier this year, Marathon Oil completed the spinoff of its downstream business, Marathon Petroleum Corp., making Marathon Oil an independent upstream company based in Houston. Marathon Petroleum became an independent refiner based in Findlay, Ohio (OGJ Online, July 1, 2011).
Encana refutes US EPA Pavillion groundwater report
Encana Oil & Gas (USA) Inc. refuted the US Environmental Protection Agency's preliminary conclusions in its draft report that ground water in the aquifer near Pavillion, Wyo., contains compounds EPA believes are "likely associated with gas production practices, including hydraulic fracturing."
Encana said it was disappointed EPA released the draft report before subjecting it to qualified, third-party, scientific verification.
EPA said analysis of samples taken from deep monitoring wells indicates detection of synthetic chemical like glycols and alcohols consistent with fracing (OGJ Online, Dec. 9, 2011).
"This precipitous action runs counter to the cooperative approach that Encana and other state, federal, and local participants in the Pavillion Working Group took in working alongside the EPA in its investigation for more than 3 years," Encana said in a Dec. 12 news release from its Denver office.
Eric Marsh, Encana's executive vice-president, natural gas economy and senior vice-president, USA division, said safe, responsible gas development is vital. "Hydraulic fracturing is an important, necessary, and safe part of natural gas development," Marsh said. Encana's news release said EPA's approach, data, and analysis contains numerous discrepancies.
"The EPA's reported results of all four phases of its domestic water well tests do not exceed federal or state drinking water quality standards for any constituent related to oil and gas development," Encana said.
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