Drilling

Oklahoma City-based GMX Resources Inc. plans to begin a drilling program in its Haynesville Shale and Bossier Shale holdings during 3Q2008. At 80-acre density, GMX estimates it would have five years of development on its 27,500 net acres. GMX plans to bump up its capital spending in 2008 to $271 million from $195 million, which would allow it to drill up to four to six net horizontal wells in the shale acreage. The new capital expenditure budget includes acreage acquisition costs, infrastructure build-out and equipment upgrades in East Texas and northwestern Louisiana. The company also increased its 2008 guidance for discretionary cash flow to $100 million, up from $80 million. Revenue is now forecast at $140 million, down from $125 million. In addition, production is seen to increase to 7.8 Bcfe in the second half of 2008 and is forecast to be 13.8 Bcfe for the full year. Daily production rates are expected to be 60 MMcfe/d by year’s end, up from previous guidance of 42 MMcfe/d.

Fort Worth, TX-area residents who’ve grown weary of Barnett Shale gas drilling commotion in their backyards might want to move near one of the nation’s liquefied natural gas (LNG) regasification terminals for a little peace and quiet. Gas-rich resource plays are booming; U.S. LNG regas terminals, not so much.

The Pacific Northwest region’s largest natural gas storage facility has completed drilling for expansion and upgrade by its operator, Bellevue, WA-based Puget Sound Energy (PSE).

The sale of Crown petroleum and natural gas rights in Saskatchewan for February raised C$197 million for the province, more than doubling the old record of C$85 million set in 1994. The 2007-08 fiscal year total of C$419 million also set a record, more than doubling the previous record of C$202 million set in 1994-95, according to the Saskatchewan government.

Powder River Basin Gas Corp. said it completed the first well of a 25-well drilling program on the Biamante project on the Powder River Consolidated Field in Goliad County, TX. The Biamante #1 is now completed and has been put into production. Production for the first 24 hours was set at 380 Mcf/d of natural gas. However, this rate will be monitored over the next several days to determine a stable flow rate. The 25-well program is scheduled for completion to full production in 2009. Production estimates based on recent engineering reports predict an average of 200 Mcf/d of gas as a conservative target. “This is another exciting program for Powder River Basin Gas Corp., particularly in that it is located in an area we are already familiar and have had success with,” said Powder River CEO Brian Fox. Calgary-based Powder River is active in production, acquisition and marketing of crude oil and natural gas properties. The company’s primary interests are in Wyoming, Oklahoma, Louisiana and Texas.

More efficient development plans, speedier drilling completions and falling service costs helped some key North American independents build their natural gas reserves in 2Q2007 including EnCana Corp., XTO Energy Corp., Range Resources and Newfield Exploration Co., which all delivered impressive gas volume results last week.

Drilling of a fourth high-deliverability salt dome gas storage cavern will begin in September at EnergySouth Inc.’s Bay Gas Storage facility, the company said Friday, with the cavern expected to be in service in fall 2009.

More efficient development plans, speedier drilling completions and falling service costs pushed EnCana Corp.’s natural gas production to strong gains in 2Q2007, with output in six of its nine North American gas resource plays showing double-digit growth led by the Deep Bossier at 49%, Cutbank Ridge 31%, and the Jonah Field 16%.

The Department of Labor’s Occupational Safety and Health Administration (OSHA) has cited Texas oil and natural gas well driller Patterson-UTI Drilling Co. for several violations and has proposed penalties totaling $47,600 for allegedly failing to protect employees from hazardous working conditions.