Apache cools on Canadian coalbed methane
Apache, Canada’s leading coalbed methane producer, is dropping its sights for 2007, partly because of weak natural gas prices. The U.S. independent could slash its program to 600 wells from 1,450 in 2005 and 860 in 2006 as it moves capital from low-productivity CBM wells, said Brian Schmidt, president of the Canadian subsidiary.
Even so, Apache aims to increase its Canadian gas output by concentrating on more productive, deeper zones, he said at a Peters & Co. investment conference. It is not yet clear whether Apache’s lead in the CBM sector will be followed by others who have previously embraced the resource as the best means of sustaining overall gas production.
Schmidt predicted the CBM well total will probably decline in 2007 as companies turn to the deeper targets, taking advantage of 3-D seismic developments.
He said Apache’s Canadian capital spending will drop this year to US$1.13 billion from C$1.3 billion in 2005, but the 2007 program won’t be disclosed until an evaluation of commodity-price expectations is completed. He said that if the head office asked, he has 1,050 to 1,100 wells he could drill in Canada. He told reporters a warm winter similar to last heating season will result in a “very tough go with gas prices.”
—Gary Park
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