Cutbank Ridge, a newly acquired gas play that straddles the British Columbia and Alberta border, is expected to help Calgary-based independent EnCana ultimately recover more than 4 Tcf, the company said last week. EnCana, a top leaseholder in the Canadian and U.S. Rocky Mountains, already has invested about C$500 million in exploration drilling and land sales in Cutbank Ridge, which covers nearly half a million acres.

For the past 18 months, EnCana has been assembling the lands covering the Cutbank Ridge play, which is centered about 50 kilometers southwest of Dawson Creek, BC. The final steps in the multi-phase acquisition were completed at provincial land sales in British Columbia and Alberta, where EnCana invested C$369 million to purchase a majority interest in 39 parcels totaling about 350,000 net acres. EnCana had previously acquired about 150,000 net acres through purchases, land swaps with other companies and Crown land sales.

COO Randy Eresman called Cutback Ridge “a classic resource play,” adding that “single sections are estimated, on average, to contain more than 6 Bcf of recoverable natural gas, based on two horizontal wells per section.”

EnCana expects to spend about C$4 million on horizontal wells initially, which would include drilling, completion, tying into sales pipelines and facility costs. Full-cycle finding and development costs are expected to be about C$1.50/Mcf, Eresman added.

In the exploration phase of the acquisition, EnCana examined the well logs from more than 300 previously-drilled wells in this region and drilled about 25 wells to establish production profiles. The Cadomin formation is about 8,000 feet deep and 100 feet thick. First-year production rates on each well are expected to average 1-2 MMcf/d, and EnCana’s preliminary Cutbank Ridge development plan contemplates drilling 100 to 200 wells per year.

“This year, we have substantially stepped up investment in BC from C$700 million to over C$1 billion, which is a clear endorsement of the progressive steps taken by the BC government to provide the conditions required to attract these huge capital commitments,” said Mike Graham, president of the company’s Canadian Foothills & Frontier Region. “In Greater Sierra, we have increased our summer drilling to 80 wells — double our initial plan.”

EnCana now has about 100 rigs running company-wide and plans to drill 2,500 gas wells in the last half of 2003. Excluding the Cutbank Ridge acquisition, the company is forecasting a 2003 gas sales exit rate of between 3.2-3.3 Bcf/d, lifting average annual sales and a full-year target of 3.0-3.1 Bcf/d, Eresman said.

EnCana is on track to achieve a 10% increase in conventional sales per share from pro forma levels in 2002. Oil, natural gas and natural gas liquids sales this year are forecast to average between 740,000-797,000 boe/d, which is comprised of between 3-3.1 Bcf/d and 240,000-280,000 bbl/d of oil and natural gas liquids.

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.