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Nexen ready to take control of CBM play
Nexen will not let any financial stumbles by its joint-venture partner get in the way of developing what is potentially Alberta’s largest coalbed methane resource.
The Canadian independent will exercise its right to serve notice on any wells that privately held Trident Exploration is unable to support financially, Chief Executive Officer Charlie Fischer told analysts Dec. 6.
But, despite some financial uncertainty and a recent staff layoff, Trident has restored some confidence by arranging a US$270 million loan that enabled it to pay off debts of US$125 million and finance continued development of the Upper Mannville coalbed methane formation.
Recoverable gas estimated at 260 tcf The two companies are partners in a C$400 million project to achieve the first commercial production from the Mannville, where recoverable gas has been estimated at 260 trillion cubic feet.
While leaving no doubt that Nexen is prepared to act on its rights, Fischer said Trident’s financing deal has eased some concerns about the company’s ability to cover its share of Mannville costs.
He said that conversations with Trident indicate Mannville is “their area of priority and they’re going to do everything they can to stay on track. That’s something we just have to monitor.”
Nexen has budgeted C$200 million for 2007 to continue development of 63,000 acres of the Mannville play.
Fischer said production from the area is expected to grow to 75 million cubic feet per day by the end of 2007 and double that volume by 2011.
The focus is on developing the Upper Mannville assets in the Corbett, Thunder and Doris fields, using multiple-leg horizontal wells.
—Gary Park
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