The Bureau of Land Management (BLM) approved a proposal by ExxonMobil Corp. to drill more natural gas wells in the Piceance Basin of northwestern Colorado. The new wells will be in an existing gas field under development since the 1950s.

The plan, part of ExxonMobil's Tight Gas Phase I expansion, would allow ExxonMobil to build 20 new well pads, with as many as nine wells per pad at a site about 15 miles from Meeker, CO (see Daily GPI, March 8). BLM officials said ExxonMobil will have to reduce the impact on wildlife and the environment.

ExxonMobil still hasn't detailed how much money it plans to spend in the Piceance Basin. ExxonMobil last year filed its Tight Gas Phase I expansion plans with BLM, which call for drilling more than 1,000 wells in the next 30 years on 29,680 acres of leased and state land in Rio Blanco County, CO. The company has produced gas from the mid-Piceance Basin near Meeker since the 1950s, and it has an interest in more than 300,000 acres there. In 2005, its Piceance Creek Unit was producing 45 MMcf/d from 52 wells.

In anticipation of the expansion, ExxonMobil has entered into a 30-year agreement with Enterprise Gas Processing LLC to provide midstream services for the Piceance gas. Enterprise expects to invest $185 million to construct new plant and pipeline facilities to treat and deliver the gas; construction is expected to be completed in late 2008 (see Daily GPI, March 7).

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