Devon Looks to Cash in on Cana Field

By Alex Cameron, NEWS 9

CANADIAN COUNTY, Oklahoma -- As the rest of the country struggles through its current economic woes, residents in west central Oklahoma may soon be tempted with the gold of Cana Field.

Cana Field is a vast shale formation buried deep in Blain, Caddo and Canadian Counties. Devon Energy has already taken notice to the potential money-laden area.

Roughnecks and driller have reported to work out in windy, rural western Canadian County.

It's a 24-7 operation, and the Devon workers have made progress, drilling almost two miles straight down.

"We don't have any inclination in the hole, so eventually we'll get to what we call the kickoff point and we'll drill a horizontal well," said Steve Chesher, Devon Drilling Manager.

The advent of horizontal drilling in the last 10 years has revolutionized the oil and gas industry, turning shale plays like Cana that were once thought to be played out, into potential gold mines.

"The whole field is about 250,000 acres and we have about half of it.

Devon President John Richels said the company will spend about $250 million drilling for natural gas in Cana in 2009 alone.

"We expect that ultimately we'll produce somewhere around 200 to 300 million cubic feet a day out of this Cana play," Richels said. "Just in anticipation of that, we're building a 200 million cubic foot per day gas processing facility in Canadian County later this year."

In nearby Calumet, the 270 Charcoal Grill is packed for lunch, in part because of all the oilfield workers.

"It's good for the economy, and it's good for the people," said farmer Frank Austin.

Austin and many others in Calumet and throughout the Cana Field are leaseholders and has mineral rights, which means extra money in pockets.

"It helps some, it does help," Austin said. "I don't have to work as hard."

At the same time, the added commerce has bumped up Calumet's sales tax collections, and Mayor Mike Crowley said they've been able to buy a new patrol car and a new mower.

"We've been able to do a few things with the money, so it has made an economic impact," Mayor Crowley said.

Canadian County Commissioner Grant Hedrick said the one downside of all the drilling is the wear and tear on the roads, but the upside is the gross production taxes the county gets should more than fix the roads, new ad valorem taxes will help local schools, and, in the middle of a recession, county officials.

"Should be able to hold our budget pretty close to last year," Hedrick said.

The drilling has just begun. Only 30 wells were started this year alone.

"It's early days, so we don't know exactly how many wells we might place into the field over time, but we think there's about four trillion cubic feet of natural gas under Devon's land," Richels said.

The four trillion cubic feet of gas is enough to power 50 million homes for an entire year.