Mitchell, Barrett increase 2000 capex plans
Mitchell Energy & Development Corp. and Barrett Resources Corp. both have decided to boost 2000 capital spending for the remaining months of this year�Mitchell by 21% and Barrett by 37%, according to separate announcements made this week. Mitchell is raising its capital budget to $302 million from the $250 million level set in June. More than half the increase will be spent on upstream work. Barrett, meanwhile, is increasing its outlays to $227 million from about $166 million.
Driven by continued buoyancy in oil and gas prices, Mitchell Energy & Development Corp., The Woodlands, Tex., and Barrett Resources Corp., Denver, both have decided to boost 2000 capital spending for the remaining months of this year�Mitchell by 21% and Barrett by 37%, according to separate announcements made this week.
Mitchell is raising its capital budget to $302 million from the $250 million level set in June. More than half the increase will be spent on upstream work.
Barrett, meanwhile, is increasing its outlays to $227 million from about $166 million.
Mitchell said $33 million of its budget increase has been allocated to field development. It will be used to drill 25 more development wells�213 total for the year�and recomplete or refracture an additional 128 existing wells. The remainder will be used to expand and upgrade midstream infrastructure in North Texas to handle the company's rapidly increasing gas production.
"We are stepping up development of our backlog of over 2,500 undrilled well locations to accelerate exploitation of the company's large, untapped reserve base,'' said George P. Mitchell, chairman and CEO. The company has three rigs working in North Personville in East Texas and will add a fourth next month.
In the Barnett Shale in North Texas, the company will step up from a 6 to an 8-rig program in the fourth quarter and plans to have 10 rigs working there no later than the middle of next year. "With the step up in drilling, we now expect this year's natural gas sales to increase by over 20% and should grow sales 20% next year,'' Mitchell added.
The company recently doubled gas production from the Newark East Barnett shale field to 127 MMcfd, thanks to a new light sand fracturing technology that enhances production at lower cost (OGJ Online, July 19, 2000).
Major new midstream projects include the construction of a 23-mile, 24-in. residue gas sales line from the Bridgeport plant and further debottlenecking of the Bridgeport gathering system. The residue sales line will be capable of moving up to 300 MMcfd to intrastate markets.
In addition, the company previously announced an expansion of the Bridgeport plant's processing capacity to 310 MMcfd from 210 MMcfd (OGJ Online, Apr. 30, 2000).
These projects will enable the company to meet natural gas liquids production growth targets of 15% this year and next, said Mitchell.
Barrett is raising its planned spending for 2000 by $61 million in an efforts to drill a total of 1,224 wells for the year. Ninety-six percent of the outlays will focus on Barrett's natural gas operations in the Rocky Mountain region, said the company.
"Rocky Mountain natural gas is playing an increasing role in generating electricity for the growth in personal computers, internet-related services, and high-techology industries," noted Barrett Chairman and CEO Peter A. Dea.
Barrett said its "Piceance basin and Powder River basin coalbed methane pays remain the focus of the revised budget, with 49% and 23% of the budget being directed towards these properties, respectively."
The firm plans to drill 1,088 wells in the Powder River basin this year vs. an original budget of 800. The revised plan includes 175 wells in 10 pilot programs targeting the Big George and other deep coals, says Barrett.
"Barrett's extensive inventory of drillsites provides opportunities to accelerate development of high-rate-of-return projects that will be funded from increasing production being sold at higher commodity prices," said Dea.