ChevronTexaco to drill 800 new wells in San Joaquin Valley

Money will flow in the oil patch this year, due in part to strong crude prices. This bodes well for the men and women who make their living on oil rigs. Executives at ChevronTexaco, the largest oil producer in the state, say they have budgeted $ 350 mm in capital expenditures in the San Joaquin Valley, compared to $ 250 mm last year.
"We will pump an additional $ 100 mm into the economy," said Clay Teff, asset development manager for ChevronTexaco's San Joaquin Valley Business Unit. Most of this increase will go toward drilling new wells, Teff said.

The company plans on drilling more than 800 new wells in the San Joaquin Valley this year. That's 300 more new wells than last year. In the oil industry, a new well typically represents about 100 jobs, including 25 on the actual rig. The rest are support positions.
Teff attributed the increase to healthy crude oil prices. He also said ChevronTexaco employees have done an excellent job identifying investment opportunities for the company. In general, 2004 is shaping up to be a good year for regional oilfield activity.

"We anticipate a moderate increase over last year," said Bruce Bozarth, local district superintendent for Nabors Drilling USA.
"There's an increase," agreed Fred Holmes, who owns Western Well Drilling in Taft. He said the increase in activity is not big, but that 2004 is looking to be a better year than 2003, "and last year was a good year," he added.

A bump-up in capital spending means there should be ample jobs in the oil field this year.
"We anticipate increasing the size of our work force," Bozarth said. Nabors' Bakersfield division usually employs around 300 people. "We could probably increase that by 10 to 20 %," Bozarth said. At Western Well, "We're crewed up pretty good, but we'll hire a few more," Holmes said. He anticipated adding 10 to 15 people this year to his staff of 150.

Besides ChevronTexaco, two other local companies said they plan on spending about the same amount in the oil field this year as they did in 2003.
Occidental of Elk Hills has budgeted around $ 300 mm in capital spending this year, said company spokeswoman Susie Geiger. Oxy operates Elk Hills, the largest field producing associated natural gas in the state. Associated gas is gas that's produced with oil.
The agency that regulates oil and gas activity in California recently reported that natural gas production in Kern County and surrounding areas "declined substantially in 2002, most notably at Elk Hills oil field by about 5 %. Still, Elk Hills natural gas production remained high."
"We've had a couple good years now," Geiger said. "I think we'll stay that course."

Bakersfield-based Aera Energy drilled slightly more than 1,000 wells, most of them in Kern County, in 2003, said company spokeswoman Susan Hersberger. She said the company anticipates comparable activity in 2004.
Hersberger said Aera does not release its capital expenditure levels.