Halbert Washburn, CEO of BreitBurn Energy Partners L.P. (BBEP), says his company will focus its efforts on oil rather than gas for the time being. He says current gas prices are too low to justify allocating capital to gas projects.
“We’re not bearish, but we don’t see the catalyst that’s going to increase prices to that $6, $7, $8 range at the current time,” Washburn says. “We think it will happen eventually, and when it does happen we’re very well-positioned. We have well over 1,000 and probably many, many more than that, gas locations that are all held by production. That requires something north of where gas prices are today for us to really want to drill in.”
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The company’s oil projects, Washburn says, are delivering much stronger performances.
“So we don’t see a catalyst that’s going to move gas up in the near term, therefore we believe that we need to continue to acquire oil projects and acquire oil infill drilling and other development opportunities,” Washburn says. “But we are positioned in the longer term when gas prices strengthen to be able to drill significant amount of infill locations. So we do have a lot of gas drilling potential that’s sitting on the sidelines right now not embedded in our reserves, but really in our 2P and 3P reserves.”
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