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Front Page » June 8, 2006 » Local News » State experiencing oil, gas exploration boom
Published 3,407 days ago

State experiencing oil, gas exploration boom

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A bulldozer and support equipment work on installing a line to transport gas from outlying wells near Kenilworth. The work near the 'clay banks' area is being accomplished despite a steep slope that the line must transcend. In addition to the activity in Carbon County, Utah is experiencing a petroleum and natural gas exploration boom at locations across the state, fueled in part, by prices that have been on the increase since 2003.

Utah is experiencing a petroleum and natural gas exploration boom, fueled in part, by prices that have been on the increase since 2003.

Petroleum prices in 2003 averaged about $25 per barrel of oil and $4.50 per thousand cubic feet (Mcf) of natural gas, noted the Utah Geological Survey.

But by the end of 2005, prices had risen to $60 per barrel of oil and $11 per Mcf of gas

Levels of drilling for petroleum in Utah increased dramatically in 2004 and 2005 in response to the rising prices.

Oil and gas exploration companies also believe that higher price levels would continue for some time into the future.

Drilling permit applications are often the first indicator of an exploration boom, explained the Utah Geological Survey.

Petroleum exploration companies generally try to keep an inventory of more than one year's worth of potential sites in order to provide flexibility in drilling programs should initial test results turn out positive or prices increase.

Accordingly, an increase in drilling permit applications indicates that companies expect well drilling activities to increase.

Utah Division of Oil, Gas and Mining records indicate that applications for drilling permits for new petroleum wells jumped from 838 in 2003 to 1,629 in 2005.

Mirroring the growth, DOGM data confirms that actual well starts or spuds rose from 480in 2003 to 877 in 2005.

Correspondingly, the number of producing oil and gas wells in Utah increased from 5,211 at the end of 2003 to more than 6,200 in 2005.

After two years of increased exploration and development, preliminary production numbers for 2005 indicate that the drilling efforts are starting to pay off in terms of climbing oil and natural gas production at locations throughout the state, continued the Utah Geological Survey.

Production of oil had been in a relatively steady decline since annual production peaked at 41.1 million barrels in 1985 and reached a low of 13.1 million barrels in 2003.

Meanwhile, marketed gas production peaked at 272.5 billion cubic feet in 2001.

The marketed gas production declined slightly for the next two years before rebounding to a new high of 274.6 Bcf in 2004.

Production numbers from DOGM indicate that 2005 annual oil production was 16.7 million barrels, a level not seen since 1999, pointed out the Utah Geological Survey.

And annual marketed natural gas production increased to more than 300 Bcf, a level never witnessed before.

The majority of the increased petroleum drilling and production activity in Utah is occurring on the southern flank of the Uinta Basin, added the Utah Geological Survey.

Significant attention has been focused on central Utah's new producing area that includes the Covenant field.

However, several existing fields in the Uinta Basin have witnessed greater activity in terms of the total number of new wells.

According to the Utah Geological Surevy, the state's six fastest growing petroleum fields during the one-year period between 2004 and 2005 included:

•Natural Buttes, with 463 wells.

•Brundage Canyon, with 111 wells.

•Eight Mile Flat North, with l02 wells.

•Monument Butte, with 99 wells.

•Wonsits Valley, with 18 wells.

•Antelope Creek, with 14.

Several other fields in the eastern Uinta Basin near Natural Buttes field, including Pariette Bench, Kennedy Wash, Gypsum Hills, and Red Wash, have each added five to 11 new wells during +this same period.

Other prospective areas in the state where limited drilling is taking place include continued development of the coal-bed gas fields of Carbon and Emery counties, and expansion of several small fields in the southern Uinta Basin, where significant gas reserves have been found in Mesozoic reservoirs below the previously developed Tertiary and Upper Cretaceous reservoirs.

Aggressive drilling plans announced in 2005 and early 2006 by Kerr-McGee, EnCana Oil & Gas, and EOG Resources (Natural Buttes field), Berry Petroleum (Brundage Canyon field), Newfield Rocky Mountain (Monument Butte and Eight Mile Flat North fields), and Questar Exploration and Development Company (Red Wash, White River, and Wonsits Valley fields), indicate that petroleum drilling and development activity in Utah will continue at a strong pace in 2006, and probably for several years beyond.

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