ConocoPhillips said it is temporarily suspending new drilling in the San Juan Basin in New Mexico and Colorado, citing low natural gas prices that make it uneconomical to drill new wells in the area.
"Natural gas prices have continued to be rather low," Conoco spokesman Jim Lowry said, adding that the company would be watching natural gas prices and resume drilling "as soon as it becomes economical," though he declined to set a specific target price.
Natural gas futures have rallied in recent weeks as cold weather has prompted demand for fuel. Natural gas for May delivery settled at $4.02 Thursday.
The company had three drilling rigs working in the area. Mr. Lowry said the suspension will only affect new wells. ConocoPhillips continues to produce more than 1 billion cubic feet of natural gas per day in the San Juan basin.
The company told its employees of the decision Tuesday, Mr. Lowry said Thursday
Copyright (c) 2012 Dow Jones & Company, Inc.
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