Calgary-based Progress Energy Resources Corp. is shutting in 10% of its natural gas production, which is all in Canada, until prices cooperate. The company produced an estimated 224.6 MMcf/d in 3Q2011. “We believe the current low natural gas price is unsustainable,” said CEO Michael Culbert. “Shifting capital to preserve asset value and maintain our balance sheet strength is prudent in this environment.” The Montney Shale-focused producer also is reducing its gas development spending to C$365 million this year, a reduction of C$100 million from the original 2012 capital budget. Progress Energy is jointly developing around 900,000 net acres in the Montney Shale with Malaysia’s Petronas (Petroliam Nasional Berhad). An associated liquefied natural gas export plan also is being studied (see related story).

National Fuel Gas Co. said low natural gas prices are forcing subsidiary Seneca Resources Corp. to scale back capital expenditures (capex) on exploration and production for fiscal 2012, which includes dropping two of its six drilling rigs in the Marcellus Shale. Despite the spending cutbacks, production is expected to grow by about one-third year/year, driven by an expanding presence in the Marcellus and Utica shales. “Simply put, at these gas prices, we’re not planning to grow at the pace we had contemplated,” said CEO David Smith. Seneca’s East Division, which includes the Marcellus and Utica shales, is being trimmed by $70 million, or 8%, to $720-800 million. Seneca East would also move to a four-rig program, with the rigs under longer-term contracts being held. Production in the latest quarter was 17% higher year/year at 18.2 Bcfe. Earnings were $60.7 million (73 cents/share) for 1Q2012, versus $58.5 million (70 cents) a year earlier.

WPX Energy, newly spun off from Williams, is having to rethink its first full year as an exploration and production company because of sustained low natural gas prices. The independent debuted at the beginning of the year with assets in the Piceance Basin, Bakken, Barnett and Marcellus shales, as well as the Powder River and San Juan basins. Before its debut, the company had set a budget for 2012 of $1.2-1.8 billion. The revised spending plan now is for “up to $1.2 billion,” it said. Nearly all (95%) of the company’s U.S. spending is to focus on core areas of the Bakken, Marcellus and the Piceance, with about 65% of the spending designated for oil and natural gas liquids production. The only area getting an additional drilling rig is the Bakken, where WPX plans to add a sixth piece of equipment at mid-year. This year an average of five rigs are to run in the Piceance and up to three are planned for the Marcellus. Originally WPX had planned to run 11 rigs in the Piceance and seven in the Marcellus. The decision to reduce the rig count equates to a “more than 40% decrease in the company’s rig count in these basins,” said the company.

Noble Energy Inc.‘s dry gas production in the Marcellus Shale is not expected to be a big part of the company’s growth this year, CEO Charles Davidson said. The company expects to invest more in liquids and oil, with $1.25 billion budgeted for the Denver-Julesburg Basin and Wattenberg field. In the Marcellus, $500 million is budgeted to support 99 joint venture wells with Consol Energy Inc. In the deepwater Gulf of Mexico $250 million will be spent on a one-rig program to conduct appraisal drilling at Gunflint and execute a multi-well exploration program. Noble reported a 4Q2011 net loss of $296 million (minus $1.67/share) on revenues of $985 million. It recorded a $620 million asset impairment related to onshore gas properties, primarily in the Piceance Basin. Excluding special items adjusted net income was $211 million ($1.18/share) versus $185 million *$1.04) in 4Q2010. Fourth quarter sales volumes averaged 233,000 boe/d, up 8% from 4Q2010. The sales volume split for the latest quarter was 40% liquids, 31% U.S. gas and 29% international gas. U.S. volumes totaled 127,000 boe/d in 4Q2011, up 7% from a year earlier.

Consol Energy Inc. said its estimated proved, probable and possible (3P) reserves totaled 20.2 Tcf at the end of 2011, which was 41% higher than in 2010. The year-end reserves numbers were audited by Netherland, Sewell & Associates. The 3P reserves by type include 9.88 Tcf in the Marcellus Shale; 6.4 Tcf in conventional gas and oil; 2.796 Tcf in coalbed methane; and 1.138 Tcf in “other” shales. Drillbit finding and development costs totaled 47 cents/Mcf in 2011, which Consol attributed to held-by-production acreage in the Marcellus Shale, as well as “continued refinement” of drilling and completion technology. Proved reserve adds from extensions and discoveries totaled 517 Bcf at the end of December, while estimated drilling and completion costs were $237.4 million. When divided by the proved reserves number, Consol said finding and development costs totaled 47 cents/Mcf in 2011.

Dallas-based Pioneer Natural Resources Co. reported a 9% sequential increase in production in 4Q2011 and attributed the success to “three core liquids-rich growth assets in Texas,” the Eagle Ford Shale, the Spraberry field and the Barnett Shale Combo. Pioneer this year plans to continue running 12 rigs in the Eagle Ford and drill 125 wells. Eagle Ford production rose sequentially from 14,000 boe/d in 3Q2011 to 20,000 boe/d in 4Q2011. It expects production to increase in the play from an average of 12,000 boe/d in 2011 to 25,000-29,000 boe/d in 2012, 37,000-41,000 boe/d in 2013 and 47,000-53,000 boe/d in 2014. In the Barnett Shale Combo play, Pioneer operated two rigs for much of 2011 and plans to remain at this level through 2012. “Our returns have been compromised somewhat by low gas prices, but these two rigs will continue to drill, basically preserving leasehold and looking for a potential increase into 2013,” said COO Timothy Dove. Pioneer reported a fourth quarter net loss of $111 million (minus 93 cents/share). Adjusted income was $147 million after tax ($1.19/share).

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