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Fire Shutters West Tavaputs Output

A fire last Tuesday at Bill Barrett Corp.'s (BBG) Dry Canyon compressor station in its West Tavaputs natural gas field in northeastern Utah's Uinta Basin sent two employees to the hospital and shut in an estimated 88 MMcfe/d net.

Based on an initial assessment, the compressor station apparently suffered extensive damage and gas production from the West Tavaputs field was "substantially" shut-in, Bill Barrett officials said. At the time of the incident, the company's net production from West Tavaputs was about 88 MMcfe/d.

Most of Bill Barrett's gas production was to be transported through its other facilities in the area. The company said last Wednesday it would provide the estimated timing of future production when available.

Wells Fargo Securities analyst David Tameron wrote in a note Wednesday that the shut-in production represents about 26% of Bill Barrett's (BBG) total corporate production and 31% of its natural gas production. "At last report, there were two compressor stations in the field, with the damaged station serving Peter's Point and the other serving Prickly Pear. In late 2010, BBG reported that throughput capacity at the Dry Canyon station was 90 MMcf/d and the Interplanetary station had 54 MMcf/d of capacity but was permitted for 100 MMcf/d. These two compressor stations feed into Questar interconnects."

Tameron wrote that there are "other important longer-term dynamics" to watch.

"BBG went through a long drawn-out process working with numerous environmental and cultural stakeholders and government regulators to finally receive an [environmental impact statement] in late 2010 and approval for full project development at West Tavaputs," Tameron wrote. "An event such as this in an environmentally sensitive area like West Tavaputs may draw increased criticism from those same stakeholders. Also, BBG is in the process of seeking a decision on development of a federal lease in the Piceance Basin (Cottonwood Gulch) from the Department of the Interior, which is considered another sensitive area."

The Dry Canyon compressor station is about 30 miles northeast of Price, UT. The Bureau of Land Management had representatives on location last week, the company said.

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