Drilling

XTO Energy’s operations chief said Wednesday that the key to his company’s U.S.-based natural gas production success is not keyed toward exploring for new properties, but instead concentrated on acquiring and exploiting assets that other producers don’t want.

XTO Energy’s operations chief said Wednesday that the key to his company’s U.S.-based natural gas production success is not keyed toward exploring for new properties,but instead concentrated on acquiring and exploiting assets that other producers don’t want.

Questar Corp. said Tuesday it will increase capital spending by $25 million to accelerate its drilling programs in the Rockies and Midcontinent regions. The company now expects to spend $480 million for 2004 capital projects, with $344 million targeted for exploration and production, gas development, gas gathering and other nonregulated activities through its Questar Market Resources subsidiary. The regulated pipeline and utility businesses plan to spend $127 million.

A survey of Canadian field receipts by UBS shows that record drilling this year led to a 2.5% gas production increase in the second quarter. According to UBS estimates, which are based on 95% of the total gas produced in Canada, production in the second quarter averaged 16 Bcf/d compared to 15.6 Bcf/d during the second quarter of 2003. Year to date production rose 1.3% to 15.8 Bcf/d, analysts at UBS said.

A survey of Canadian field receipts by UBS shows that record drilling this year led to a 2.5% gas production increase in the second quarter. According to UBS estimates, which are based on 95% of the total gas produced in Canada, production in the second quarter averaged 16 Bcf/d compared to 15.6 Bcf/d during the second quarter of 2003. Year to date production rose 1.3% to 15.8 Bcf/d, analysts at UBS said.

Two successful drilling programs in Texas and the Arkoma Basin have given Houston-based Southwestern Energy Co. impetus to revise upward its gas-rich production forecast for this year to a range of 48.5-50.5 Bcfe.

The record pace of drilling in Canada has finally started to pay off. Canada’s National Energy Board (NEB) reported that natural gas exports to the United States through February of this year were up 1.3% to 626.5 Bcf, or about 10.44 Bcf/d, compared to 618.7 Bcf, or 10.31 Bcf/d, over the same period in 2003. The NEB said the biggest volume increase was to the California market where exports jumped 23%. Volumes to the Pacific Northwest rose 15%. Exports to the Northeast and Midwest fell by 7% and 0.8%, respectively. Gas exports in the month of February totaled 303.7 Bcf compared to 291.7 Bcf in February 2003. During 2003, exports fell to 3.5 Tcf, their lowest level since 1999 when exports were 3.37 Tcf. The U.S. Energy Information Administration expects gross pipeline imports to fall this year to 3.28 Tcf from 3.42 Tcf in 2003. Meanwhile, Lehman Brothers analyst Thomas Driscoll said on Tuesday that he expects Canadian gas production to rise 1.2% this year to 16.6 Bcf/d. Driscoll said first quarter Canadian production was flat at 16.5 Bcf/d based on a survey of 14 major gas producers.

The record pace of drilling in Canada has finally started to pay off. Canada’s National Energy Board (NEB) reported that natural gas exports to the United States through February of this year were up 1.3% to 626.5 Bcf, or about 10.44 Bcf/d, compared to 618.7 Bcf, or 10.31 Bcf/d, over the same period in 2003.

A survey of 31 of the most aggressively-drilling U.S. independents showed a 34% increase in exploration and development (E&D) spending in 2003 at the same time those companies were experiencing a 69% increase in total cash flow, according to Raymond James & Associates.