Williams Companies Inc., Colorado’s largest natural-gas producer, is planning to expand its Western Slope operations in 2010.
Tulsa, Okla.-based Williams is looking to raise the number of rigs operating in the Pi ceance Basin to 12 from eight, according to company executives.
As early as January, Williams will add a rig at its newly acquired Piceance Valley field south of Newcastle, said company spokeswoman Donna Gray.
About three rigs will be added to Williams’ Highlands field on the Roan Plateau, company executives said.
“A lot of our growth next year will be in the valley and in the Highlands,” Steve Malcolm, Williams’ chief executive, told analysts in a third- quarter conference call.
Another growth area will be the Barnett Shale in Texas, Malcolm said.
The Piceance has benefited from increased drilling efficiencies and the ability, because of the recession, to renegotiate vendor contracts, which cut costs for supplies and equipment by as much as 30 percent, Malcolm said.
“Despite lots of effort from WMB (Williams), the market is still not convinced that . . . Piceance is low cost, but ramping up drilling will be putting money where their mouth is,” Rebecca Followill, an analyst with Tudor, Pickering, Holt & Co. Securities, wrote in a November note. “Expect that to happen.”
In August, Williams bought a 2,200-acre lease, on private and state land near Newcastle, from Orion Energy for $252 million.
There is one rig on the field and about 32 producing wells, Gray said.
In 2010, Gray said the company is planning to drill about 300 wells on the Western Slope — equal to the number it drilled in 2009.
About 69 percent of Wil liams’ total proven reserves of 4.5 trillion cubic feet of natural gas are in the Piceance Basin, according to the company’s data book.
In 2008, Williams produced 257 billion cubic feet of gas, according to the Colorado Oil and Gas Conservation Commission. That was about 20 percent more than the next-biggest producer, BP America Inc.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
