"To be blunt, it is not our job to answer U.S. natural gas supply problems," the chief financial officer of Burlington Resources told Houston Producers' Forum members at a recent program. "It is not a single company's job," the CFO, Stephen J. Shapiro, said. "We are after a return. Besides, the issue around North American supply is geological. Rig activity is increasing, but productivity per well is the problem." Shapiro echoed the comments of many other observers lately who say that higher gas prices will have to ration (reduce) gas demand, because North American supply cannot be increased in 2003 quickly. "I don't yet know what price that will take. But to increase drilling does not get you out of the supply problem," Shapiro said. In the past two years Burlington has vastly changed its drilling inventory portfolio, abandoning the rapidly declining Gulf of Mexico shelf, for example, in favor of other longer-life plays in the U.S. and Canada. The company now predicts modest growth of 3% to 8% annually and is focusing instead on creating above-average return on capital. While he sees a need for more imported LNG and gas from the Arctic, Shapiro expects there will be gas-on-gas price competition when that comes to pass by the end of this decade. Burlington's 2003 production is estimated to reach at least 2.59 billion cubic feet equivalent per day, versus 2.57 Bcf in 2003, with about 75% of that natural gas. -Leslie Haines
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