QEP Resources Inc. said Thursday it would devote most of its capital expenditures (capex) for the 2012 fiscal year to crude oil and liquids-rich natural gas plays, and would look to boost annual production.

CEO Chuck Stanley told financial analysts Thursday that the Denver-based company currently operates one drilling rig in the Haynesville Shale, but it could be dropped this summer if natural gas prices remain weak.

“We are finally seeing some signs that dry gas drilling is slowing as we and other operators continue to drop rigs in the Haynesville and other dry gas plays, but the supply response will obviously take a while and will lag the downturn in rig count,” Stanley said. He added that the company would be focusing on future growth, “and that necessitates drilling more oil wells and more liquids-rich gas wells, and steering clear of the Haynesville in this environment.

“It’s too early in the year to predict what the forward curve is going to look like going into 2013. We certainly are concerned about putting much capital in the Haynesville. We’ll see what we can do with respect to driving growth from the liquids-rich gas portfolio as well as oil.”

QEP plans to spend $1.3-1.45 billion on capex in 2012, with most of it ($1.13-1.28 billion) allocated to QEP Energy, the company’s exploration and production (E&P) unit. Stanley said low natural gas prices have forced the company to rethink its plan from December to spend $1.5 billion on capex.

“We’re now allocating 88% of our forecasted capital in QEP Energy to crude oil and liquids-rich natural gas plays,” Stanley said, adding that E&P would focus on crude oil production in the Bakken and Three Forks formations in the Williston Basin, the Sussex and Shannon formations in the Powder River Basin, and the Green River formation in the Uinta Basin. Additional E&P efforts would focus on the production of crude oil and natural gas liquids (NGL) in the Granite Wash, Marmaton and Tonkawa formations in the Anadarko Basin.

The CEO said the company would “allocate significant capital” to the liquids-rich Mesaverde formation in the Uinta Basin, the Pinedale Anticline and the Cana-Woodford Shale.

“We can respond [to production results in the aforementioned areas] by continuing to reallocate capital away from dry gas, and particularly the Haynesville, as we get better clarity on outside operated activity through the year,” Stanley said. “We’re not making that allocation today because we just don’t have good visibility around how much capital we’ll need to spend in the Haynesville. So we’ve been fairly conservative in our estimates at this point. But rest assured, we’re focused and our teams are focused on driving liquids and crude oil production across our business, and we’re looking for opportunities to redeploy capital to do that.”

Stanley said QEP would soon begin construction of the Iron Horse II cryogenic gas processing plant in eastern Utah (see Daily GPI, Nov. 15, 2011). The facility will have an inlet capacity of 150 MMcf/d and is expected to be operational in early 2013.

For the full year 2011, QEP reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.39 billion — a 22% increase from the $1.14 billion earned in 2010 — and production hit a record 275.2 Bcfe, averaging 754 MMcfe/d. Net income for 2011 totaled $267.2 million ($1.50/share), compared to $283 million ($1.60) for the year prior. QEP Energy’s crude oil and NGL production totaled 6.5 million bbl in 2011, up 54% from 4.2 million bbl in 2010.

Fourth quarter EBITDA totaled $390.5 million — up 31% from the $298.5 million earned in 4Q2010 — while production totaled 73.9 Bcfe (803 MMcfe/d), up 5% from 70.7 Bcfe in 3Q2011 and 19% higher than 62.1 Bcfe in 4Q2010. Crude oil and NGL production totaled 2.2 million bbl, a 75% increase over the 1.3 million bbl produced in the fourth quarter of 2010.

CFO Richard Doleshek said QEP’s production guidance for 2012 ranged from 305 to 310 Bcfe.

The close of 4Q2011 marked the end of QEP’s first fiscal year of operations as a standalone company following its spin-off from Questar Corp. in June 2010 (see Daily GPI, May 19, 2010).