Fayetteville Shale Play Formation - Natural Gas Field - Arkansas Shale
Fayetteville Shale Shale Deposit Extends through
these Arkansas Counties: Franklin, Johnson, Pope, Yell, Conway, Van Buren, Faulkner,
and Cleburne, Crawford, Sebistian, Logan, Cleburne, White, Jackson, Woodruff, Prairie, Monroe, Lee, Phillips, St. Francis,
Lonoke.
What is the Fayetteville Shale Area Natural Gas Field?
The Arkansas Fayetteville Shale Natural Gas Field is located on
the Arkansas side of the Arkoma Basin. The Fayetteville Shale Play Deposit is about 60 - 575 feet thick and
the depth ranges from 1450 -6700 feet deep. This unconventional gas reservoir can be compared to the Haynesville Shale and the Barnett Shale. Ranging at about 4,000 square miles, the Fayetteville Shale Formation is being highly sought
out by many companies that are listed below as they go on a gigantic land grab of mineral rights. Landowners in the Fayetteville Shale are getting paid handsomely. Many of these companies believe, while
the Fayetteville Gas Shale is still young, that this Arkansas shale formation holds a promising amount of Natural
Gas. A University of Arkansas Study showed that this shale play could generate north of 17 billion dollars and
gain around 11,000 jobs going well into 2012. This would be great for the state of Arkansas!
All of this has been made possible due to the recent development of New Drilling Techniques and Technology known
in the gas and oil industry as Horizontal Drilling and Hydraulic Fracturing After a vertical well is drilled, the companies then drill horizontally. They then use millions of gallons of
water at high pressures down the well bore to fracture the shale rock deposits. This fracturing technique then
unlocks the natural gas from shale rock. Natural vertical fractures are important factors in the economic production
of gas from these rocks because the permeability of the natural fractures is almost always much higher than the unfractured
rock. Directional drilling has become a huge asset in all of these promising shale plays.
Lets talk
figures.....how much potential natural gas is in the Fayetteville Shale? Researchers estimate that the Fayetteville
Shale play could hold as much as 20 trillion cubic feet.
The chief executive of Chesapeake Energy Corp, who spoke
at an annual luncheon of the Arkansas Economic Development Foundation, says the Fayetteville Shale natural gas reserve in Arkansas will transform the state's economy.
Who discovered
Fayetteville Shale? Southwestern Energy's Arkansas subsidiary, SEECO Inc discovered one day that the new frac
techniques used at the Barnett Shale could be used at the Fayetteville Shale. Infact, in 2006 Southwest and SEECO placed
a 700 million dollar bet that this was the case. Another 900 million went in for 2007.
Basically in short,
back in 2002, while everyone was focused on the huge Barnett Shale....these two companies quietly did studies and research
on their own state shale, The Arkoma Basin. They drilled many wells and were shocked at what they found...they
immediatly thought the gas must be coming from the deeper Fayetteville Shale. Going into 2003, these two companies
tip toed their way into acquiring surface rights and mineral rights below the Arkmoa Basin which covered the Fayetteville
Shale. By the end of 2003, Southwestern Energy had spent about $11 million and acquired the rights to about 3,300 acres.
In 2004, Southwest officially used horizontal drilling and struck gold while not letting any of there recent strategic moves
out to the public. They then went on a leasing binge and eventually alerted the public.
Below is a list
of companies drilling at Fayetteville as we speak. Make sure to check out the other shale plays around the USA.
Fayetteville Shale Companies
- Fayetteville Shale Stocks Companies Drilling at Fayetteville Shale Gas Field
- Southwestern Energy SWN - SWN Southwestern holds approximately 879,000 net acres in
the Fayetteville Shale play. Fayetteville Shale Play - For the first nine months of 2009, Southwestern placed a total of 324 operated wells on production in the
Fayetteville Shale play, all of which were horizontal wells fracture stimulated using slickwater. At October 24, 2009,
the company’s gross production rate from the Fayetteville Shale play was approximately 1,230 MMcf per day, up from approximately
600 MMcf per day a year ago. The graph below provides gross production data from the company’s operated wells in the
Fayetteville Shale play area through October 24, 2009.
During the third quarter of 2009, the company’s horizontal
wells had an average completed well cost of $2.9 million per well, average horizontal lateral length of 4,100 feet and average
time to drill to total depth of 12 days from re-entry to re-entry. This compares to an average completed well cost of $2.9
million per well, average horizontal lateral length of 4,123 feet and average time to drill to total depth of 11 days from
re-entry to re-entry in the second quarter of 2009. The company currently has 17 drilling rigs running in its Fayetteville
Shale play area, 13 that are capable of drilling horizontal wells and 4 smaller rigs that are used to drill the vertical portion
of the wells. The company currently expects its gross well count in the play during 2009 to be approximately 550 wells (80%
operated).
- Chesapeake Energy CHK - Fayetteville Shale (Arkansas): The Fayetteville Shale is currently the second most productive shale play in the
U.S. and one of the nation’s 10 largest natural gas fields of any type. In the Fayetteville, Chesapeake is the second-largest
leasehold owner in the Core area of the play with 445,000 net acres. During the 2009 third quarter, Chesapeake’s average
daily net production of 248 mmcfe in the Fayetteville increased approximately 13% over the 2009 second quarter and approximately
49% over the 2008 third quarter. Chesapeake is currently producing approximately 260 mmcfe net per day (400 mmcfe gross operated)
from the Fayetteville and anticipates reaching approximately 290 mmcfe net per day (445 mmcfe gross operated) by year-end
2009, approximately 300 mmcfe net per day (460 mmcfe gross operated) by year-end 2010 and approximately 330 mmcfe net per
day (510 mmcfe gross operated) by year-end 2011. To further develop its 445,000 net acres of Core Fayetteville leasehold,
Chesapeake anticipates operating an average of approximately 12 rigs in 2010 to drill approximately 100 net wells. During
the first the first three quarters of 2009, 100% of Chesapeake’s $524 million of drilling costs in the Fayetteville
were paid for by its joint venture partner BP America (NYSE:BP). During the fourth quarter 2009, nearly all of Chesapeake’s
drilling costs, or approximately $75 million, will be paid for by BP, bringing to an end BP’s drilling carry obligations
to Chesapeake.
- XTO Energy XTO - XTO Energy has made some great Fayetteville Shale findings. Fayetteville shale where we have now 380,000 net acres from our acquisitions and leasing
efforts. In 2009 Fayetteville, we currently
have 7 rigs running in the Fayetteville play.
Our first four wells that we completed on the Southwestern acquisition have averaged 2.8 million a day, a couple at 3.5 to
4. So we're excited and surprised I think with what we found on the Southwestern acquisition.
- PetroQuest Energy PQ - PetroQest PQ announces update for Fayetteville Shale.
Drilling continues in the Fayetteville Shale where the Company has six non-operated rigs working and approximately 18,000
net acres in the trend. 2009 Update: We participated in 33 successful non-operated horizontal Fayetteville shale wells during the fourth quarter and our average daily production was 6.7 million cubic feet
per day, which is up 35% compared to the third quarter of 2008. We are currently producing approximately 9 million cubic feet
per day at Fayetteville gas. Drilling is
starting to slow down as the price of natural gas falls.
- Petrohawk Energy HK - Petrohawk HK has been drilling the Fayetteville Shale
for Natural Gas -
Petrohawk operated two horizontal rigs in the Fayetteville Shale on average during the second
quarter. The Company drilled eleven operated wells and participated in sixty eight non-operated wells during the period. Eight
of the operated wells have been completed to date with an average initial production rate of 1.2 Mmcfe/d. All of these wells
were drilled in the far northern portion of the play where drilling and completion costs are currently approximately $1.8
million per well, with an average of 11 days spud to rig release, which has decreased from 15 days in the fourth quarter 2008.
Wells drilled during the second quarter had an average lateral length of 3,170 feet with an average of 9.7 frac stages as
compared to fourth quarter wells with an average lateral length of 3,080 feet and 7.9 frac stages.
One of the most
positive aspects of the Fayetteville Shale development has been the growth of the non-operated component. Over the first half
of 2009 net non-operated production has grown from 18.3 Mmcfe/d to 32.6 Mmcfe/d, a 78% increase since January 1, 2009. While
the operated component has declined from 52.9 Mmcfe/d to 47.7 Mmcfe/d as a result of running only two rigs, overall net production
from the field has grown from 71.2 Mmcfe/d to 80.3 Mmcfe/d, or over 13% production growth from January 1, 2009 to the end
of the second quarter.
- Storm Cat Energy SCU- SCU has announces positive developments at Fayetteville Shale
Natural Gas Field - The first three of the Company's 2008 Fayetteville development
program wells are now on production and tied into sales, two of which have undergone State of Arkansas Form 13 testing. Each
well continues to produce significant volumes of fracturing fluid. Notwithstanding, the Owen 1-18H tested at a rate of 1,240
thousand cubic feet per day (Mcf/d) and the Ballard 1-18H tested at a rate of 1,341 Mcf/d. The Company is very encouraged
by these test rates and anticipates that production from these wells will increase as cleanup progresses. The third well,
the Roberts 1-13H, is tied into sales and is about to undergo a Form 13 rate test.
.
Capital City Energy CETG- CETG supposedly has 30,000 acres in the Fayetteville Shale located in Van Buren and Cleburne Counties in Arkansas
but when I checked their website to confirm...I found nothing.
.
Deltic Timber DEL - Deltic Timber DEL doesn't drill in the Fayetteville Shale, they collect royalty payments for the land that they
have in the Fayetteville Shale play!!
With regard to the Fayetteville Shale Play, through June 30, 2008, we've received royalty payments totaling
some $564,000 from the production in units where some 21 wells have been drilled. As I've communicated in the past, our ownership
percentage in these units varies greatly. For the second quarter of 2008, royalty payments received averaged just over $100,000
per month.
