The CEO of Denver-based Barrett Resources Corp. said yesterdaythat producers are already worrying about how they will transportfuture supplies of natural gas out of the prolific Rocky Mountainbasin and surrounding areas, and warned that they need to “step upand take some risk” in an effort to move along pipeline proposalsto do more than transport the gas regionally.

Peter A. Dea, who also chairs Barrett, shared investors’ timeyesterday with forecasters from Newfield Exploration MidcontinentCo. and Pioneer Natural Resources Co. at UBS Warburg’s 13th AnnualEnergy Conference in New York City. Dea said that the Denver marketnow takes most of the natural gas produced in the region, but hepredicted that within a few years, the production would surpassdemand.

“Denver’s about it, and it can’t consume all of the gas expectedto be produced there,” he told analysts. “We’ve got firmtransportation. And producers will always be able to sell gas, butif you can’t get the gas sold in the Rockies, you’ve got to be ableto send it somewhere else.”

Dea said the “answer needs to be addressed right now. Pipelineprojects haven’t gotten a lot of support” and he said it was “timefor producers to step up and take some risk.” He said there’salways been a hesitation on the part of producers because of thecosts involved and they tend to be more interested in “interbasin”pipeline solutions.

Barrett’s strategic focus has always been on Rocky Mountainnatural gas, and currently the company is leveraged about 96% tonatural gas. It holds lease plays throughout the Rockies, and isone of the largest leaseholders in the Powder River basin, with thehighest coalbed methane production in the United States. Dea saidthat overall, he expects the company to have about a 60% growth inproduction this year and currently, there is “plenty of pipeline totake our gas out of the Powder River basin.” However, with growthcoming not just for Barrett but for other producers, he predictedthat transportation problems would escalate.

David Trice, CEO of newly named Newfield Exploration Midcontinent,thinks the opportunities in North American exploration and productionof natural gas have never been better. His company, which isleveraged about 75% to natural gas, broadened its focus and its namefollowing its acquisition of Lariat Petroleum Inc. last month (seeDaily GPI, Jan. 2).

With former Lariat CEO Randy A. Foutch running part of theNewfield show from Tulsa, Trice said the company now is expandingits focus on the U.S. Gulf Coast, using investments that have “paidoff” internationally in Australia and China.

“All of our projects are additive to the Gulf of Mexico,” Tricesaid. “We will not dilute our effort in the Gulf of Mexicowhatsoever. We’ll continue to have a very active explorationprogram there. Watch us closely as we move methodically to deeperwater.”

Trice said that the company has had “many discussionsinternally” about adding new focus areas. In 1998, he said Newfieldwas a “single basin” company, completely tied to the Gulf. “Today,we have more flexibility,” and he said the company also has morecapital to “shift spending to onshore areas.”

Trice said Newfield now can “choose areas where the costs aren’tas high and production is better. We can choose the right wells atthe right time. The complexion of Newfield has changed, but the waywe run our business has not changed.”

Pioneer Resources CEO Scott D. Sheffield also pointed to “greatsuccess” in West Texas, Kansas and the Gulf of Mexico, along withinternational growth in Africa, Argentina and Canada. With a growthrate of about 10% a year, Sheffield said the company’s mostimportant focus is “growing natural gas production.”

Pioneer drilled more than 300 wells in 2000 with a 90% successrate and it replaced 150% of its reserves, said Sheffield. With the”obviously high” gas prices, he said the company would use itsnewfound wealth to grow its exploration and production base andreduce debt.

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.