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ConocoPhillips: Natural Gas Prices Too Low for New San Juan Basin Wells

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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.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Jack Nelson | Mar. 30, 2013
Natural gas prices in the US are low because the auto manufacturers, and the public, will not use this fuel in their vehicles, like so many other countries do. Holland in the 1980s. Brazil in the 1990s. Not that much money to add a kit. Half the cost of gasoline. That is the real problem in the US. Politicians, auto makers, oil companies, with their slumber parties.


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