ConocoPhillips plans to remain a major player in the development of natural gas shale resources, but for now its focus will be on those plays with a high liquids content, particularly the Bakken in Montana and North Dakota, and Eagle Ford in Texas, according to Kevin Meyers, senior vice president, exploration and production, Americas.

“With the current ratio of gas-to-liquids prices running at 15- and 20-to-one multiples, liquids-rich is a good place to be,” Meyers said during a presentation for financial analysts Wednesday. About 25% of ConocoPhillips volumes come from liquids production, and compared to competitors “that’s a pretty high number.” Meyers noted that while exploration and production spending is about even with last year at $9.7 billion, the exploitation portion of that for the Lower 48 and Canada is down to about $1.2 billion, or half of what was spent in 2009 and one-third of the 2008 total.

ConocoPhillips’ substantial acreage base is not subject to short-term lease expiries. “We don’t have to drill into a weak price environment and we won’t,” Meyers said. The company believes that longer term gas prices will improve, but for now the company’s focus both in shale development and conventional plays will be on liquids-rich prospects.

In the Bakken initial production is coming in with 1,800 to 2,400 b/d of liquids. An initial well in the Eagle Ford came in at 4.5 MMcf/d of gas with 1,800 b/d of liquids. “That’s when you start getting really excited,” Meyer said. The company will be spending this year to develop some of its more than 240,000 acres in the Bakken and 230,000 acres in the Eagle Ford.

The company acquired a significant amount of acreage in several shale basins over the last few years “at very reasonable prices,” Meyers said.

In older conventional plays like the San Juan and the Permian ConocoPhillips also will be focusing on high liquids plays. It has 1,000 drill-ready prospects “in a good zip code” in the San Juan that it can tap.

And for the future, experiments with horizontal drilling and multi-stage fracturing in the Deep Basin tight sands area in Canada also are bringing in good results with production of between five and 10 MMcf/d from wells in what was a fairly mature area.

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