|
Natural gas drilling raises Canadian targets for 2004
Gary Park Petroleum News Calgary correspondent
An unrelenting pursuit of natural gas prospects in Canada has forecasters again rethinking the drilling outlook for 2004, based on indications that gas prices are not about to drop.
In a new update, the Petroleum Services Association of Canada has boosted its well count for the year to 21,660 — a mere 142 wells short of last year’s record — with gas wells expected to tally 14,771.
FirstEnergy Capital has raised the bar even higher, predicting 2004 could see 15,800 gas completions, easily beating last year’s 14,898, which shattered the previous high of 11,181 in 2001.
The investment dealer said gas field receipts in Western Canada for the first four months were 16.18 billion cubic feet per day, compared with 15.97 bcf for all of 2003 and 16.4 bcf in 2002.
FirstEnergy analyst Martin King said favorable winter drilling conditions allowed drilling programs to “run hard” for four months and produce “real tangible” production gains.
Having earlier forecast that supply would remain flat or decline slightly, FirstEnergy is now estimating that volumes could grow this year by 200 million cubic feet per day.
Significant growth is being posted in the coalbed methane sector, which will contribute 80 million cubic feet per day this year from 1,000 wells and could grow to 150 million cubic feet per day in 2005 from 2,000 wells. North American gas price forecast up FirstEnergy has raised its North American gas price forecast for this year and next by 50 cents per million British thermal units to $5.50 and $5.25 and added 25 cents to the 2006 target which is now $5.
It says combined North American gas demand should grow by 1.4 billion cubic feet per day this year and 1 billion cubic feet per day in 2005, based on a “solid” U.S. economy.
Petroleum Services Association of Canada President Roger Soucy said the first quarter was the busiest for the period in Canadian drilling history, up 15 percent from a year earlier and “with continued strong commodity prices, we anticipate this high level of activity to be maintained throughout the year.”
He said summer and fall drilling are not expected to beat last year’s activity, but also admitted he tends to be “conservative in my well-count numbers.”
Precision Drilling, Canada’s largest drilling contractor, confirmed the drilling effort in the first quarter, which Chief Executive Officer Hank Swartout said was the best in company history.
The Calgary-based company logged profits of C$101 million, compared with C$83 million a year earlier and “as long as gas stays where it’s at today ... we expect it to be a record year,” he said.
| 