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The Associated Press

GREAT FALLS (AP) — Price increases for natural gas have prompted renewed exploration in Montana, industry officials say.

“I’m seeing areas being leased for natural gas that haven’t been leased in the last 25 years,” said Don Lee, a veteran oil and gas attorney in Shelby. “I am seeing a dramatic increase in activity in leasing, drilling, in every aspect of exploration.”

The Montana Board of Oil and Gas Conservation issued about 250 natural gas permits in the past six months, compared with a total of 350 permits for all of 2000.

Gail Abercrombie, executive director of the Montana Petroleum Association, stopped short of calling the first six months of 2001 an economic boon, but she remains optimistic.

“We’re trending upward, and this is significant,” she said. “The price of gas is up there to the point that there is going to be a rate of return for that exploration…”

Industry experts say the vast majority of the activity is coalbed methane production in the Powder River Basin of southern Montana, and natural gas exploration along the Canadian border.

“It’s been particularly active around both directions, and really in Havre and Chinook,” said Tom Richmond, administrator of the Montana Board of Oil and Gas Conservation.

“It’s directly attributable to the increase in fuel prices,” he said.

Some experts have predicted natural gas prices will reach their highest level in a decade this year.

Nationally, natural gas rigs in the field increased from 770 to 1,164 between March 2000 and March 2001, an increase of 51 percent, according to Baker Hughes, a leading oilfield services company.

PanCanadian Petroleum Limited of Canada, which last year bought the oil and gas properties of the Montana Power Co., intends to drill two dozen wells in Montana this year, said company spokeswoman Kimberly Benn.

“We haven’t drilled to date in Montana, but we will be drilling later this summer,” she said.

“We are getting everything lined up and putting our people in place.”

Ocean Energy, the largest natural gas producer in Montana, already has 765 wells producing in Blaine and Hill counties and intends to add at least 60 more wells this year.

Last year the company sank between 80 and 100 wells. If more equipment was available, it would have done more, a company spokesman said.

Copyright 2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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