Questar Ups Pinedale Forecast, Adds Gathering Facilities

Questar Corp.'s initial results from the 2001 drilling and completion operations on the Pinedale Anticline in western Wyoming are encouraging enough to warrant more drilling and additional gathering facilities, company officials said last week, projecting that based on the new results, oil and gas production at year-end 2001 could triple over year-earlier levels.

Gross daily production from 14 Questar-operated wells in the Pinedale area on Jan. 1, 2001 was 24 MMcf and 220 bbl of condensate. Assuming planned 2001 wells are successful, gross daily production by the end of this year could be between 75-80 MMcf and 700-750 bbl of condensate.

Based on the results, affiliate Questar Gas Management plans to construct additional gathering facilities to connect Pinedale production to nearby processing facilities, projecting an in-service date of Nov. 15. The company also is securing regulatory permits to expand its existing facilities south of the Pinedale acreage, and plans to install new compression equipment to lower the gathering line pressure and enhance well production rates.

Questar Exploration and Production (QEP) and Wexpro, both Questar subsidiaries, have a 60% average working interest in 14,800 gross acres in the Mesa Area of the Pinedale, located about 100 miles north of Rock Springs. So far this year, the companies have drilled five new wells, resulting in one producing gas well and four awaiting completion. Five wells from the 2000 drilling program also are being completed.

Gary L. Nordloh, QEP and Wexpro CEO, said the productive reserve potential of the average well on the Pinedale acreage "should exceed earlier estimates," and noted that drilling and completion activity could be more than 50% higher than in 2000.

"Questar could book reserves associated with 40 additional proved developed and undeveloped well locations by year-end 2001 under 80-acre spacing," Nordloh noted, adding that the Salt Lake City-based company is investigating the feasibility of 40-acre spacing with additional drilling this year. Reduced well spacing to 40 acres could double the potential well locations and reserve estimates.

The Pinedale Anticline is a tight-sands play, and each well is fracture simulated in several producing zones. Earlier wells completed with an average of eight producing intervals and a reserve potential of 5-6 Bcfe. This year, Questar projects an average 12 intervals per well, which could increase reserve potentials to 6-7 Bcfe/well.

Questar also anticipates that 17 wells, including five now under way, could be drilled and completed this year, more than previously expected. Nordloh said the Bureau of Land Management and Wyoming Fish and Game permitted the company to begin drilling activity a month earlier in 2000, and Questar now has three drilling rigs on the Pinedale site, with two more expected by July 1.

Questar has booked reserves associated with 14 proved developed producing (PDP) wells and 54 proven undeveloped (PUD) locations in the Pinedale area. Approximately 85% of its potential reserves and production belong to QEP, with Wexpro holding the remaining 15%. Nordloh said if all the planned 2001 wells are successful, Questar could book reserves for 33 PDP wells and 75 PUD locations by year-end. QEP would have a working interest in 26 PDP wells and 75 PUD locations.

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