Calpine boosts Canada spending
Gary Park Petroleum News Calgary correspondent
Calpine Natural Gas Trust, a recently created Canadian spin-off from U.S. power giant Calpine, is targeting a modest increase in capital spending this year. The board of directors has approved a 2004 capital program of C$9.3 million, with C$6.8 million earmarked for drilling and completions, compared with C$8.5 million in 2003, of which C$4.6 million went to drilling and completions.
The CNG Trust assets were expected to yield an average 33 million cubic feet of gas equivalent per day in 2003, weighted 69 percent to natural gas with the 2004 forecast at 30 million to 34 million cubic feet equivalent.
Calpine set up a Canadian headquarters almost three years ago through a C$1.8 billion purchase of Encal Energy, then three months ago joined the stampede to the ranks of income trusts by converting proven reserves of 83 billion cubic feet of gas equivalent.
The trust has hedged 100 percent of the gas production from its initial properties for a minimum price of C$7.35 per thousand cubic feet with a wholly owned subsidiary of Calpine.Participation in CNG Trust is viewed by Calpine as a means to increase its competitiveness in the acquisition and development of additional gas reserves in Canada to fuel its power generation portfolio in North America.
|