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Natural gas prices fuel rush in drilling

Brentwood company involved with 12,000-foot project in Solano County

By Greg Cannon, TIMES STAFF WRITER

ANTIOCH -- In the rush to capitalize on near-record prices for natural gas, a group of energy interests that includes a Contra Costa County company has drilled the deepest-ever production gas well in Northern California.

Soaring natural gas prices are a headache for consumers but they're a boon for exploration and drilling companies. "You create a climate for companies to do things that previously may (have been) too high a risk," said Bob Nunn, a partner in the project.

The well was drilled more than 12,000 feet near Travis Air Force Base in Solano County by a partnership that includes Nunn's Sunset Exploration Inc.. Nunn is a Brentwood farmer and developer.State officials are careful not to disclose confidential information, but say they know of no other wells deeper than this one.

The well, called the Pale Rider in a nod to Clint Eastwood -- could produce more than 5 million cubic feet of gas a day when it comes on line next month, Nunn said. That's enough gas to fuel about 23,000 homes a day, according to the Natural Gas Association.

It took $1.8 million and more than a month to drill the well. Less than a year ago, with gas selling for around $3 per thousand cubic feet, the well would not have been drilled, Nunn said. But a fourfold increase in prices set off a new interest in gas production.

The May price for gas is $12.04 per thousand cubic feet, according to PG&E's market rate hotline. In addition to exploring and drilling for new wells, oil and gas companies are looking at reopening old wells that were capped when low prices gave little value to their small outputs.

At the California Department of Conservation, notices of intent to drill new wells increased to 78 through the beginning of May, compared to 27 at the same time last year. Applications to reopen old wells went from 45 to 78 in the same period.

How much gas lies below the well near Travis remains to be seen. "We think we just hit the tip of the well," Nunn said. A second well will go deeper, but it's on hold until a drill rig becomes available, probably in August. A flurry of drilling activity in the region has created a waiting list for equipment.

According to the Munger Oilogram, an industry newsletter, the number of wells being drilled in California nearly tripled, from just more than 20 in 1999 to almost 60 today. "Natural gas (drilling) is just going full bore," said Bill Bolster, who publishes the Oilogram.

Increased production could help boost California's contribution to 6.1 billion cubic feet of gas it uses each day. But only about 15 percent of that comes from within California. "We're basically doing everything we can to drill new projects" before the bubble bursts, Nunn said.

Reach Greg Cannon at 925-779-7176 or gcannon@cctimes.com.

-- Swissrose (cellier3@mindspring.com), May 17, 2001