at last, page-2

re: at last/energy news article Of Interest



Everything old is new again


Friday, December 09, 2005

CARPENTER Pacific is rapidly discovering it's a great time to be a low-risk, high-margin, onshore US oil and gas explorer. By MARK STORY RESOURCESTOCKS*

The growing US appetite for natural gas, fuelled by a mounting supply crunch, and the double-whammy effects of two (recent) major hurricanes on production and spiraling prices – plus major plans to exploit mature onshore oil and gas reserves – are driving US-based, Australian explorer Carpenter Pacific's ongoing upside.

The company plans to develop low-cost projects by exploiting mature reserves and finding new reserves in existing producing areas.

Favorable industry fundamentals, plus record high natural gas prices, advances in drilling, completion and fracture stimulation techniques – coupled with ready access to infrastructure – have let Carpenter Pacific pursue several attractive investment opportunities in the US. The company now has a significant gross acreage position of some 30,000 acres in its three projects.

Since repositioning itself last year, Carpenter has refocused on aggressively pursuing a low-risk strategy to increase its reserves and production of conventional but more significantly non-conventional natural gas in the onshore US.

The explorer has ramped up its development programs in East Texas and Utah. In addition to raising $US22 million in new capital, the last calendar quarter of 2004 also saw Carpenter Pacific acquire significant interests (a 30% interest in the 5,000 acre oil and gas projects) at Jefferson-McLeod in the East Texas area. This has now been expanded to 12,000 acres and the 5,000 acre (64% working interest) Helper prospect in Utah.

Carpenter's Dallas-based CEO Jeffrey Clarke expects the 15 new wells and numerous recompletions (expected to start in 2006) to give the company opportunities that will lead to two to three years of drilling opportunities.

Underpinning the low-risk strategy is the development of new reserves in known areas. The ambitious lease acquisition program in East Texas has resulted in the acquisition of an additional 7,000 acres, taking the company's position to over 12,000 acres of mineral leases.

Considered on par with the big Middle-Eastern fields in terms of size, the fields where Carpenter is drilling in East Texas have previously made over 15 trillion cubic feet of gas and over a billion barrels of oil.

"Instead of saying there's nothing left, we're taking the stance there's still lots to come out," said Clarke, who has over 35 years experience in the oil and gas industry in North America and internationally in technical and senior executive positions.

"Because there's so much 'known area', the chances of drilling a well where there's no commercial hydrocarbons are very low."

What's driving much of Clarke's optimism is a significant improvement in the technology associated with gas production, especially since the 1950s and 60s when most of the last big discoveries were made.