Capex Data
CNX Gas Corporation set 2007 Capital Expenditures at $312 million. This represents an 84% increase from the $170 million in expected capital spending for 2006. CNX Gas will have two development and two exploration plays in 2007. The drilling, processing, and gathering capital for Virginia Operations, a coalbed methane (CBM) play in Central Appalachia, will be $148 million; Mountaineer, a CBM play in Northern Appalachia, will be $84 million; Nittany, an exploration CBM play in central Pennsylvania, will be $6 million; and Cardinal, an exploration New Albany shale play in western Kentucky, will be $12 million.
An additional $32 million has been budgeted for a more aggressive land effort. Much of the remaining $30 million, aside from $9 million for Knox Energy in Tennessee, will be devoted to initial exploration work as other plays are assessed.
CNX Gas expects to drill 278 development wells in Virginia, 57 development wells in Mountaineer, eight exploration wells in Nittany, and three exploration wells in Cardinal, for a total of 346 in its four major active areas. CNX Gas holds a 100% working interest in these areas. Other areas could see as many as 55 net wells, for a company total of 401 wells. Virginia Operations will also perform 30 recompletions.
The drilling of all of these wells, and the recompletions, is expected to cost $160 million. Gathering and processing capital is estimated at $106 million, which includes $12 million for the Bull Creek gathering system in Virginia, a 13.5-mile line that will allow for the collection of gas from the western portion of the Oakwood and Middle Ridge fields, as well as third- party production.
Company production is expected to be 64 billion cubic feet (Bcf) in 2007, and at least 15% higher in both 2008 and 2009.
Future Plans
CNX Gas expects to drill 278 development wells in Virginia, 57 development wells in Mountaineer, eight exploration wells in Nittany, and three exploration wells in Cardinal, for a total of 346 in its four major active areas. CNX Gas holds a 100% working interest in these areas. Other areas could see as many as 55 net wells, for a company total of 401 wells. Virginia Operations will also perform 30 recompletions.