Barrett shifts focus this year from Piceance Basin to Utah
Bill Barrett Corp. plans to slow and then discontinue drilling locally this year in order to focus on new operations in Utah.
The company said in a news release on its 2010 financial results it plans to operate one rig the first half of the year in what it calls its Gibson Gulch area, south of Silt, and then discontinue drilling for the remainder of the year.
The company instead plans to increase operations on Utah’s West Tavaputs Plateau east of Price. Last year, Bill Barrett Corp. reached a compromise with environmentalists and the federal government in which it reduced its planned pads and wells there and agreed not to drill within two wilderness study areas.
Last year, the company drilled 149 wells in the Piceance Basin and 275 companywide. Its average daily gas production for the year in the Piceance was 131 million cubic feet, about half of the company’s total average daily production. Its total production in the basin last year grew 32 percent from the previous year. It spent about $270 million in capital expenditures in the Piceance Basin, out of $473 million companywide.
It plans to drill about 215 wells this year, but about 100 of those will be in its West Tavaputs holdings.
Bill Barrett Corp. says those holdings represent its largest development asset based on proved, probable and possible reserves, and the area provides it with the opportunity for “a multiyear, high-growth program.”
It calls Gibson Gulch a “swing area” where it can substantially modify drilling depending on broader spending plans. However, the area continues to offer strong profit margins because of lower operating costs and higher revenues it is getting from liquid fuels being extracted from the gas in processing, the company said. “The (Gibson Gulch) program continues to be a key, lower-risk development area for the company,” it said in its news release.
The company has about a 98 percent interest in 703 wells there. As of a little more than a year ago, it had the equivalent of more than 10,000 undeveloped acres there.
Bill Barrett Corp. also has a 90 percent interest in 40,300 acres of public land atop the Roan Plateau near Rifle. But its ability to drill there has been held up by a lawsuit by environmental groups, which challenged the federal government’s decision to lease that and surrounding acreage. The parties in the suit are awaiting a ruling by a federal judge.