Oil & Gas Journal
HOUSTON, Oct. 26 -- Three independent oil and gas companies told a meeting of the Independent Petroleum Association of America Friday about their focus on tight, deep gas onshore in Texas and the Rockies.
Making presentations were executives from El Paso Production Co., Pure Resources Inc., and Tom Brown Inc.
"We set out to be the deep, tight gas kings," said El Paso Production Pres. Rodney Erskine, who was president of Coastal Oil & Gas Corp. before the two firms merged. El Paso Energy Corp. bought Coastal Corp. in January (OGJ Online, Jan. 29, 2001).
El Paso Production's emphasis on gas dates back to the Coastal days, he said, adding Coastal consistently made a return on capital of 5% or less on oil vs. with a return of 10-20% on gas.
El Paso Production has focused on the Texas coastal plain where 66% of its wells are deeper than 10,000 ft. It has drilled 76 wells in south Texas at an average TD of 14,121 ft, Erskine said, adding only 8 of the wells were dry holes.
The deep gas wells have lead to the development of technology including new logging tools and improved seismic techniques, he said.
Pure Resources Pres. and CEO Jack Hightower said deep drilling in the Permian basin is a core area for his company.
"There is no question. We think the potential is in deep, tight gas," Hightower said. "The Permian basin remains a large remaining resource base."
Pure Resources has a capital budget of $230 million this year and plans to maintain that level of spending in 2002, he said.
Pure was formed in May 2000 through the combination of Titan Exploration Inc. and the Permian basin business of Unocal Corp.
James Lightner, president and CEO of Tom Brown, said his firm is looking for gas below 10,000 ft in the Rockies and at about 15,000 ft in the Permian basin.
"It's very easy to go down there and find gas, but it's very hard to make money. You have to find the sweet spots," which takes an investment in technology, Lightner said.
Tom Brown spends 57% of its capital budget on development, 24% on exploration, 8% on land, and 11% on facilities, Lightner said.
Contact Paula Dittrick at [email protected]