Producer cuts spending on B.C. natural gas development
() - Quicksilver Resources Canada has cut further spending on its Horn River natural gas assets in British Columbia for the rest of 2012, pointing toward low prices and prolific wells. The Fort Worth company said it would be looking for partners and better market conditions before moving capital back to the dry-gas play. Natural gas prices have dropped substantially since early 2011, making reserves from the relatively isolated Horn River region uneconomical to produce for the time being.
The company maintained that its Horn River assets have great potential, as evidenced by production from its first eight-well pad in the northeastern B.C. region, which started flowing this spring. "At this point, these eight wells have an estimated production capacity in excess of 150 million cubic feet of gas per day," said Glenn Darden, chief executive, during a conference call Aug. 7. The company's total U.S. and Canada production this year is expected to average just under 400 million cubic feet per day.
Despite the good news story, Quicksilver said it would be restricting Horn River production - and further drilling - until 2013 since the existing prolific wells will be enough to meet processing and pipeline commitments. Darden also estimated 2018 likely would be the earliest a natural gas export facility would start operations on Canada's west coast, providing an opportunity to move gas out of British Columbia to overseas markets.