Western Gas Resources 2005 budget up 21%
By OGJ editors
HOUSTON, Jan. 20 -- Rocky Mountain basins are the target of 87% of the $338.8 million in capital spending Western Gas Resources Inc., Denver, plans in 2005.
The outlays are to be mainly in the Powder River, Green River, and San Juan basins. The company also plans to drill exploration wells in a number of gas resource plays. Western Gas estimates that it spent $257 million in 2004.
The company holds interests in 1.4 million net acres in eight Rocky Mountain gas basins. It plans to participate in 1,019 wells, all in Rocky Mountain unconventional gas resource plays, up 18% from 2004.
The budget includes $28 million for a pending acquisition of midstream assets in the eastern Greater Green River basin.
The company earmarked $126.5 million for the Green River basin, $118.4 million for Powder River basin coalbed methane development, and $23.4 million in the San Juan basin.
Another $27.3 million will go for exploration drilling, leasing, and gathering in new areas, including the Cretaceous Niobrara biogenic gas project in Northeast Colorado and new unconventional gas resource plays in the Rockies.
The other $43 million breaks down as $32 million for well connections, expansions, maintenance and upgrade projects on midstream assets in the Anadarko and Permian basins, and the rest for interest, overhead, and administrative expenses.
Western Gas will participate in 85 Green River basin wells, 68 of them on the Pinedale anticline. It will drill 9 exploration wells on 28,000 net acres in the Washakie and Red Desert subbasins and 1 wildcat and 7 development wells in the Sand Wash basin.
The company said it has exposure to 1,650 Pinedale anticline wells in 10-15 years on 20-acre spacing and 125 Jonah field wells on 10 and 20-acre spacing.
Powder River and Niobrara
Powder River spending includes $81.2 million as Western Gas and its partner plan to drill 850 gross wells, 730 in Big George and related coals and 120 in Wyodak and related coals. Some 640 of the 850 wells will be on federal leases, and the other 210 are on fee or state lands.
Permits are on hand for 90 of the federal wells and applied for on 812 more, and the company will apply for 1,000 more permits in the next 6 months. State water discharge permits are in hand for 291 of the planned 2005 wells, and the rest are expected to be issued by Mar. 31. The permitting process takes 120-150 days.
San Juan plans include participating in 64 wells.
Western Gas has identified 50-65 more locations on its 59 sq miles of 3D seismic data in the Niobrara project pending production results from the early wells. It plans 6 Niobrara gas wells in 2005, same as in 2004. Production will start in the second quarter through a 12-mile company gathering line. It will acquire 27 sq miles of 3D data in the first quarter.
Western Gas will participate in up to 14 wildcats in other Rockies resource plays, where it recently acquired 325,000 net acres and has budgeted for further leasing.
The 2005 budget for gathering and processing facilities is $141 million.