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Chevron slows Colorado natgas drilling development

Reuters

Thu Nov 20, 2008 5:15pm EST
SAN FRANCISCO, Nov 20 (Reuters) – Chevron Corp (CVX.N: Quote,ProfileResearchStock Buzz) said on Thursday it had to curtail plans for expansion of a new development in Colorado’s Piceance Basin due to a drop in local natural gas prices.

 

The company said it would stick to having just two rigs in the basin, where it only started production in August, instead of expanding to six rigs as previously planned. No changes in the workforce numbers were anticipated.

“Due to weak natural gas prices in the Rockies, and Chevron’s robust set of global investment opportunities, it will fund its Piceance Basin Natural Gas Program at approximately 2008 funding levels going forward,” a spokesman said in an emailed statement.

The San Ramon, California-based company also said maintaining the status quo reflected the current regulatory environment, not the uncertain one it faces in the near future, and the “potentially increased costs of doing business in Colorado.”

A clear left-ward shift in the U.S. election has caused worries among oil and gas drillers about tighter regulations.

The outlook for gas in the Piceance has generally been strong. Occidental Petroleum Corp (OXY.N: QuoteProfileResearchStock Buzz), after buying full control of property there in September, said it expected to extract 200 million cubic feet a day in 2010, compared with 50 million before the acquisition. (Reporting by Braden Reddall; Editing by Marguerita Choy)

 

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