NGI The Weekly Gas Market Report / NGI All News Access

Anadarko's Gas Output in Utah Set to Rise

Anadarko Petroleum Corp., already the largest natural gas producer in Utah, has been given permission to increase its natural gas drilling program in the Greater Natural Buttes Field in Uintah County.

The approval would allow Anadarko to use directional or nonvertical wells to expand its operations from one natural gas well every 40 acres to one well every 10 acres. The new density spacing variance is the first approved by the Utah Division of Oil, Gas and Mining (DOGM).

"Evidence showed [that] if they didn't drill wells that dense there would be natural gas reserves left in the ground," said DOGM Associate Director Gil Hunt.

Anadarko reported record gas output in 1Q2008 from its Greater Natural Grand Buttes and Powder River Basin plays (see NGI, May 12). In March Anadarko reported that it had discovered an additional 2.3 Tcfe of resources in the Greater Natural Buttes area by expanding and improving the performance of its 20-acre down-spacing activities and from 10-acre infill drilling opportunities (see NGI, March 31). Including the company's proved reserves of 1.4 Tcfe associated with Greater Natural Buttes, Anadarko estimated that total resources in the area were about 9.2 Tcfe.

Utah's gas production surpassed the 1 Bcf/d mark in 2007, which was 8% higher, or almost 79,500 Mcf/d more, than in 2006, according to the state (see NGI, May 19). Last year Anadarko produced about 90 Bcfe in Utah.

The increased density drilling project would be conducted only in Uintah County on contiguous acreage in the South Canyon and Hatch areas of the Greater Natural Buttes Field on federal, state and private land. The wells would be drilled to depths of up to 11,000 feet within the Wasatch and Mesaverde formations. By using existing well pads, there would be only one-tenth of the surface disturbance compared with building new locations for vertical wells, the DOGM noted.

Anadarko plans to drill 200 gas wells in Uintah County this year. Under the approved higher density drilling program, Anadarko in 2009 would increase its rig count to 12 from eight and would drill around 300 wells. By 2010 the higher density drilling would allow 400 wells to be drilled using 15 rigs.

Anadarko's Brad Miller, general manager of the Greater Natural Buttes Field, said the approval would allow the producer to "effectively recover more of the resources, while at the same time avoid overdrilling, which could lead to two wells competing for the same natural gas reserves." The Houston-based producer, he said, plans to grow production "25% year over year for the next four years." More than $2.5 billion, he added, is expected to be invested in the Greater Natural Buttes Field over the next five years.

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus