Texas-headquartered U.S. Energy Development Corp. is diving into the Columbia Project development in the Permian Basin with Shell Oil Co., having acquired an $8.5 million interest in the project.
The firm’s involvement in the project, which carries a $24.1 million total development cost, includes drilling three horizontal wells targeting oil in the Wolfcamp formation in West Texas’ Loving County, U.S. Energy said in a news release Sept. 16.
The move adds to the company’s position in the Permian, where it is also developing three horizontal Wolfcamp wells in nearby Ward County, Texas, on acreage acquired in 2019. The private E&P said it plans to pump $40 million into the Ward County project by the end of the year.
“Our team is always looking for opportunities to provide our investors with high quality projects,” U.S. Energy Jordan Jayson said in the statement. “We have historically found great success in the Permian Basin and look forward to further expanding our footprint in the area.”
Initial production at the Shell-operated Columbia project is expected to start in the fourth quarter.
Grace period allows the company to make the due payments within 30 days to avoid a formal default.
Equitrans said that the 1.6 Bcf/d Hammerhead pipeline was, however, placed in-service on Aug. 1, after being completed and injected with initial line-pack—gas stored in a pipeline—provided by EQT in July.
Even when U.S. benchmark prices return to $45/bbl, "very few" U.S. producers would be able to afford to expand production because of high debt levels, Pioneer Natural Resources CEO Scott Sheffield says.