Two Texas-based independents, Ultra Petroleum and Denbury Resources Inc., are forecasting continued success from their North American-based exploration and production programs following strong gains this year.
Houston-based independent Ultra Petroleum, whose North American operations are focused on finding natural gas in the Green River Basin, reported continued success in its Wyoming drilling program. Currently, Ultra has six operated rigs drilling on locations in the Warbonnet area and plans to add two additional rigs over the next 60 days and by year’s end plans to be participating in 64 wells — a 250% increase from the 26 wells in 2002.
As of mid-November, Ultra also announced a record for daily net production: 125.4 MMcf/d, compared with a peak of 70.8 MMcf/d in 2002 and 43.7 MMcf/d in 2001. In the past two years, the independent has increased peak production 287%. Current net production is 120 MMcf/d.
Ultra increased its hedge position through 2006, and in addition to the 15.2 Bcf hedged for calendar 2004 at an average price of $4.41/Mcf, has hedged approximately 15 MMcf/d at $4.28/Mcf for calendar 2005 and 7.5 MMcf/d at $4.25/Mcf for calendar 2006, basis Opal Wyoming.
“Our results so far in 2003 continue to confirm the amazing productivity of the Pinedale Anticline,” said CEO Michael D. Watford. “All 42 wells we have brought on production this year have met and in many cases exceeded, in cases dramatically exceeded, pre-drill expectations. With the increase in our borrowing base and our hedge position, we are poised to pursue an aggressive drilling campaign in 2004, which should drive another year of exceptional growth.”
Meanwhile, Dallas-based Denbury Resources approved its 2004 development and exploration expenditures budget at $173 million, with approximately 45% of the budget to be spent on projects relating to the company’s tertiary recovery (CO2) projects in western Mississippi. The budget excludes any potential acquisitions. Denbury is the largest oil and natural gas operator in Mississippi and holds key operating acreage onshore Louisiana and in the offshore Gulf of Mexico.
Denbury continues to develop its Little Creek, Mallalieu and McComb fields in Mississippi, in addition to beginning a new CO2 flood at Smithdale Field, plus the drilling of three additional CO2 producing wells and related facilities expected to increase both CO2 production rates and CO2 reserves.
Approximately 20% of Denbury’s budget is being allocated to the offshore Gulf of Mexico area, approximately 15% each to the remaining two core areas of onshore Louisiana and eastern Mississippi and about 5% to the Barnett Shale in Texas. Approximately 15% of the budget relates to exploratory projects, primarily natural gas targets in the onshore Louisiana and offshore Gulf of Mexico areas.
Based on its capital budget for 2004, Denbury anticipates that its production will be between 34-35 Mboe/d, about the same as this year’s expected average. The 2004 estimates do not include any potential natural gas liquid volumes. The company’s production from its tertiary CO2 projects is expected to increase approximately 50%, from an anticipated 2003 average of approximately 4,700 boe/d, to a projected 2004 average of approximately 7,100 boe/d.
“Even though we are spending more in 2004 on our core CO2 projects — some of which will not have an immediate impact on production — our overall base production (excluding offshore and Thornwell Fields) is continuing to grow,” said CEO Gareth Roberts. “During 2004, one of our goals is to increase our CO2 reserves and production to setup the future expansion of our tertiary recovery operations to eastern Mississippi. Our capital spending should be at or near our total cash flow, keeping our leverage relatively consistent, assuming no significant acquisitions or divestitures. Our future continues to look bright.”
©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |