EOG Resources chief executive said that the Houston-based independent oil and gas company would not log big production gains from a giant Canadian gas find until 2011.
“For substantial volumes for EOG to come from this play, pencil in 2011,” CEO Mark Papa told investors at the Bear Stearns Global Oil and Gas Conference. Last month, EOG said it may have discovered one of the largest accumulations of natural gas in Canada with its Horn River Basin play. Drilling on its acreage in northeastern British Columbia may have uncovered 6 trillion cubic feet of natural gas, the company said. First sales are expected this summer, but output will not rise quickly, due to the find’s remote northern location and the need to build up infrastructure. Wells are expected to cost an average of about $10 million each, Papa told investors. Still, Papa said the Canadian resource play has the potential to be as big as the Barnett Shale in North Texas, but the rate of return for the gas will be lower, due to the find’s location far away from natural gas market centers.
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