NEW YORK Nucor
Corp. is reaping the benefits of its onshore natural gas
drilling agreement with energy company Encana Oil & Gas
(USA) Inc., according to president and chief executive officer
"The performance of
wells drilled over the past two years has exceeded the
projections we used to justify this capital allocation. That,
of course, translates into lower-than-expected gas costs. We
also expect our natural gas investments to be cash-flow
positive by late 2016," he said during the companys
third-quarter conference call.
N.C.-based steelmaker expects to finish the year with about 240
to 250 wells drilled, according to Keith Grass, executive vice
president and president and chief executive officer of
Cincinnati-based scrap subsidiary David J. Joseph Co.
gas costs "have been below the market price on average so far
this year" due to its agreement with Encana, Grass said during
the conference call.
The company will spend
about $700 million on drilling in 2014 and 2015, according to
The Encana venture is
expected to supply Nucors steelmaking and direct-reduced
iron production needs for more than 20 years (
amm.com, Nov. 6).