Enerplus Allocates 24% of 2012 Capital Budget to Marcellus
Enerplus Corp. , a Calgary-based oil and gas producer, has approved an $800 million capital spending program for 2012 the company expects will help boost production 10 percent. Of that $800 million, Enerplus will spend $190 million (24 percent) in the Marcellus Shale, focused primarily on drilling to delineate and retain leases. The target is to drill 20 Marcellus wells in 2012, with 18 of those wells coming on-stream by the end of the year. They plan to nearly triple their Marcellus production from 25 mmcf/d (million cubic feet per day) now to 70 mmcf/d by the end of the year.
From the Enerplus press release:
We plan to spend approximately $190 million in the Marcellus region in 2012, with approximately 80% allocated to our partner-operated activity in the northeast area of Pennsylvania. Despite the low natural gas price environment, we plan to invest with our partners to retain this valuable acreage. Well results in northeast Pennsylvania have continued to surpass our expectations in terms of both initial production rates and declines. Well costs in this region are currently averaging $7 million to $8 million per well. We plan to direct approximately $40 million to drilling appraisal wells on our operated leases in Pennsylvania where we are focused on demonstrating the potential in these areas. In total we expect to participate in drilling approximately 20 net wells in the Marcellus with approximately 18 net wells on-stream in 2012. Our total Marcellus production is expected to grow from 25 MMcf/day at the end of 2011 to over 70 MMcf/day as we exit 2012.*
*Enerplus Corp. (Jan 17, 2012) – Enerplus Announces 2012 Capital Spending Program