TRINIDAD — An executive with Pioneer Natural Resources says the company plans on increasing its level of activity in 2011 and 2012.
Paul Osanger, the company's Raton basin asset manager, who spoke this week at a Trinidad and Las Animas County Chamber of Commerce luncheon, says the company plans to drill up to 75 coal-bed methane wells in 2011 and up to 120 in 2012.
The push will start in the second quarter of next year, Osanger said.
The drilling activity won't approach 2008 levels but will far exceed current levels, he said. Pioneer has drilled fewer than 10 new wells in the basin since the recession and lower gas prices hit the country in the fall of 2008, he said.
Currently, the company employs about 460 in the Trinidad area, down from 530 in 2008, he said. The company relied on transfers and attrition to avoid layoffs, he said. "We laid down the rigs and really, to Pioneer's credit, we had no adverse reduction in our work force — and by that I mean we had no layoffs. So we kept our staff on board," Osanger said.
Osanger said that current coal-bed methane natural gas production is around 220 million cubic feet per day, down from its 2008 high of 350 million cubic feet.
Pioneer continues to support community projects, Osanger said.
"In 2009, Pioneer gave $250,000 back to the community here primarily in the GAP (Gas Assistance Program). We've kept that level consistent over the last few years," Osanger said. The GAP program is designed to help the city and county's needy families pay their escalating winter utility bills.
The company will contribute another $300,000 to the community this year, he said.
Pioneer spent about $11 million in capital this year and plans to spend between $30 million and $65 million next year, he said.
"We also will spend about $110 million in operating expenses for that production," Osanger said. Of that $110 million, $70 million will be spent locally in the form of company labor and services, equipment and third-party services, he said.
Osanger said he was proud of the company's safety record in the basin during the past year with no on-site accidents or lost man hours due to a production mishap.
Natural gas prices are fluctuating around $4 to $5 per million cubic feet and expectations are that prices won't rise much higher than $6 in two years, Osanger said.
"I would characterize 2008 as kind of the hay day of the oil and gas industry. At that time, oil prices were over $140 a barrel and natural gas was at about $14," Osanger said.
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