EnCana: Budget Cut Won't Affect Early Drilling In Haynesville
Tuesday 11/11/2008 6:08 PM ET - Dow Jones News
Symbol Last %Chg
CNQ 41.05 -7.32%
ECA 43.83 -7.41%
SU 19.95 -9.54%
As of 12:44 PM ET 11/12/08
By Isabel Ordonez
Of DOW JONES NEWSWIRES
HOUSTON (Dow Jones)--EnCana Corp. (ECA) is pushing ahead with its exploratory drilling program in the promising Haynesville shale gas resource in Texas and Louisiana despite reining in spending next year, a top company executive said Tuesday.
North America's biggest natural gas producer has amassed a sizable acreage in this region, whose output could eventually hit 1 billion cubic feet a day, according to the company. EnCana has only started to drill test wells at the Haynesville and had expected to ramp up spending this year for extra wells before the financial crisis gripped markets in September.
"Plans have not changed. We have five rigs working in the Haynesville as we speak," said Jeff Wojahn, president of EnCana's U.S. arm, said in an interview with Dow Jones Newswires. "We are maintaining our activity in the Haynesville right now."
Wojahn, speaking at an industry conference in Houston, said the results of the drilling program will be analyzed during the fourth quarter. Depending on those results, EnCana will decide how to allocate its capital budget among the rest of its natural gas plays, he said.
EnCana has indicated it will cut spending next year from 2008's estimated $6.9 billion capital budget, though it hasn't said by how much. Last month, the company said it will focus on "capital preservation in these uncertain times."
Canadian Natural Resources Ltd. (CNQ) has slashed its 2009 budget in half, while oil sands heavyweight Suncor Energy Inc. (SU) has reduced its spending by a third.
EnCana is still deciding how much it will cut spending next year, Wojahn said.
"We don't know yet, but there are a lot of factors we are going to be taking in account," he said. The company will have a more detailed capital spending budget in December, he added.
-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; email@example.com
(Hyun Young Lee in Ottawa contributed to this story)
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