EOG adds more Alberta gas to holdings

Gary Park

Petroleum News Calgary correspondent

EOG Resources, formerly Enron Oil & Gas, shows no signs of wavering on its commitment to Canada, paying another C$60 million for Alberta natural gas assets just three months after forking over C$320 million for Marathon Oil assets.

In its latest deal EOG took over virtually all of the holdings of insolvent Promax Energy, including a heavy emphasis on shallow gas fields in southeastern Alberta.

EOG declared its independence from Enron in 1999 after a share exchange and US$1 billion equity issue and has remained bullish on the Canadian gas outlook over the past two years.

Chairman and Chief Executive Officer Mark Papa told a conference call in early November that his company is hoping for an additional 150 billion cubic feet of coalbed methane upside from the Marathon assets it acquired from Husky Energy.

Company officials said the coalbed potential is extra to the 183 billion cubic feet of reserves that were part of EOG’s largest acquisition.

Papa said favorable drilling results have given EOG reason to embark on a pilot program to exploit the Horseshoe Canyon coals of southern Alberta alongside a planned 1,000 well shallow drilling program this winter.

He said the coalbed methane potential of the 75,000-acre Twinning prospect, adjacent to the emerging coalbed plays of EnCana and Quicksilver Resources, is similar to coalbed methane-rich areas of the United States.

As well, EOG controls 35,000 acres in a separate Horseshoe Canyon coalbed prospect.