Canadian Spirit Resources (CSRI) and its joint venture partner Canbriam Energy have decided to close natural gas production at Farrell Creek in northeastern British Columbia.
The closure is set to take place with effect from 31 March 2016.
Canadian Spirit said the move is a result of continued deterioration in North American natural gas prices. The further discounted price, experienced by firms in northeastern British Columbia producing for the Spectra main pipeline, led to negative netback on natural gas production at Farrell Creek.
The companies were also compelled to take the decision as there was no signs of any near term return to a positive natural gas pricing environment.
Once natural gas prices return to a profitable situation, the natural gas processing facility and associated wells will be reactivated.
CSRI noted the company’s net production over the past 60 days at Farrell Creek has averaged 625 Mcf / day.
CSRI president Richard Couillard said: "This is an easy business decision.
"It makes no economic sense to produce our natural gas at a loss and at the same time deplete our reserves."
The company recently drilled its c-69-H/094-B-01 vertical stratigraphic test for land retention purposes and for delineation of the Montney potential in the previously undrilled area of its West Farrell Creek lands.
