Coalbed methane figures large for Penn West; accelerates exploration

Gary Park

Petroleum News Calgary correspondent

Penn West Petroleum, Canada’s fifth-largest oil and gas explorer, is raising coalbed methane on its list of priorities for increasing gas output.

Company president Bill Andrews admitted to analysts that “we are not doing enough and we came to that realization over the past couple of months when looking at the activities” of competitors in the coalbed methane field.

“It’s our intention to aggressively kick up the drilling of coalbed methane in the next six months.”

Penn West already has three Alberta wells that it believes will be economic at 100,000 cubic feet per day, per well and expects to complete another six to 10 wells in the short term.

Despite its vast promise, with some estimates placing coalbed methane reserves in Western Canada at 500 trillion cubic feet, the resource is making only small gains, with few investors counting on quick returns.

Meantime, Penn West, deterred by a sharp rise in property values, is shifting from acquisitions to exploration and development.

The company no longer expects to spend its 2003 acquisition budget of C$90 million, but it does forecast about 700 well completions this year.