Denver-based Caerus Oil and Gas LLC plans to spend up to $229 million this year on drilling and completing natural gas wells in the Piceance Basin of western Colorado, an executive said this week.
Caerus Vice President Michael Rynearson who handles operations on Monday briefed Garfield County officials on the development plans. Those include restoring some public access to about 10,000 acres in the Piceance, where last year Encana Corp. sold its natural gas assets, including 550,000 net acres and 3,100 operated wells.
According to Rynearson, Caerus has used the Encana purchase to expand its operations in the Piceance. It subsequently sold assets in Oklahoma and New Mexico. Its only remaining assets outside of Colorado are in the Pinedale Anticline in Wyoming.
Caerus plans to drill up to 150 wells this year and complete about 160 wells. Rynearson said the company is operating three rigs in the Piceance, supported by about 240 contract positions.
Concentrating on conventional gas assets in the Piceance, Caerus was producing about 343 MMcfe/d at the end of last year and has about 3.1 Tcfe of reserves and 7,600 drilling locations across 560,000 acres.
Local access and economic issues were addressed with county commissioners, who urged Caerus to re-open some of the acreage that has been closed for safety and other reasons since the Encana acquisition, according to reports. Caerus reportedly has been working to make a decision about opening some of the land.
While low gas prices are pressuring the economics of moving gas supplies from the basin, Caerus projects that average production should reach 387 MMcf/d this year. Within the next year or two, Caerus also wants to become the largest gas producer in the Piceance.