FARMINGTON — Encana Corp. is moving forward with oil and gas production in the San Juan Basin, the company's CEO said on Wednesday.
In June, the company purchased 67,000 acres to improve its position in the basin.
"We are moving forward with commercial development in the San Juan, DJ Basin and Clearwater oil areas," Doug Suttles, Encana's president and CEO, said in a conference call with investors. "Tracking the progress of the emerging plays as they are appraised will be a particular focus in the second half of 2013."
The DJ Basin is in northern Colorado, while the Clearwater resource play is in southern Alberta, Canada.
Encana spokesman Doug Hock said Wednesday he could not disclose details about the San Juan Basin property purchase.
"We're not releasing any information about the price or the other party," he said.
Encana's move to expand its acreage position in the San Juan Basin comes despite the company releasing one of its two rigs in the basin beginning Aug. 1. Aztec Well Servicing Co. is the Encana's local drilling contractor.
Hock said last week that the company was shelving the rig to cut costs as part of an effort stay within its 2013 capital budget. Suttles echoed those comments Wednesday.
"We recently took a hard look at our capital spending through the year," he said.
Encana expects to spend about $100 million in the basin in 2013, the company said in April.
Suttles, a former BP executive, took over as Encana's CEO in June. He launched a project to build a new strategy for the company. Suttles said Wednesday he expects to unveil the strategy by the end of the year.
"I believe it is critical we do this once and get it right," he said.
Encana has been the most aggressive company in exploring oil production from the Mancos Shale, a geologic layer of the San Juan Basin. The company has drilled at least 23 horizontal wells in the basin.
Jeff Wojahn, senior vice president for Encana's U.S. division, said the company was expanding in the DJ Basin in northern Colorado. Encana has three rigs operating in the DJ, and expects to add two more this year. Well costs there have fallen to $5 million per well, down from $7 million, he said.