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,
Fayetteville Shale - Natural Gas Field
What is the
Fayetteville Shale?TheFayetteville Shale
is a Natural Gas Field located in the Arkansas which is part of the Arkoma Basin. The Fayetteville
Shale Play is about 60 - 575 feet thick and the depth ranges from 1450 - 6700 feet deep. The Fayetteville Shale can
be compared to the Haynesville Shale and the Barnett Shale but is not as large as once thought. Ranging from about 4,000 square miles, the Fayetteville Shale Formation is
being highly sought out by many companies that are listed below as they go after mineral rights. However, back in 2008 the Fayetteville Shale was on fire due to high natural gas prices. The fact that natural
gas prices are low, drilling companies are moving their rig fleet to more liquid rich areas ( Oil Prone Areas ) such as the
Eagle Ford Shale, Niobrara Shale, Bakken Shale, and Permian Basin. Things are even heating up nicely in the Granite Wash.
New Drilling Techniques and Technology, known in the gas and oil industry as Horizontal Drilling and Hydraulic Fracturing, caused areas like the Fayetteville Shale to produce large amounts of natural gas. All of this drilling caused
a spike in supply which couldn't be met by demand. What was worse for natural gas and the Fayetteville Shale was
the recession. We are still in a very slow period as we head into 2012 but I suspect natural gas prices will get back
into the $4's at some point. When natural gas gets back between $6-$7, the Fayeteville Shale will blossom once again.
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.
Who discovered Fayetteville Shale? Southwestern Energy's Arkansas subsidiary, SEECO Inc,
discovered one day that the new frac techniques used in 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 immediately 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
February 21, 2011
- Chesapeake Energy Corporation Announces Sale of Fayetteville
Shale Assets to BHP Billiton for $4.75 Billion in Cash
Chesapeake Energy Corporation (NYSE:CHK) today announced it
has agreed to sell all of the company's interests in approximately 487,000 net acres of leasehold and producing natural gas
properties in the Fayetteville Shale play in central Arkansas to BHP Billiton Petroleum, a wholly owned subsidiary of BHP
Billiton Limited (NYSE:BHP; ASX:BHP), for $4.75 billion in cash before certain deductions and standard closing adjustments.
The transaction includes existing net production of approximately 415 million cubic feet of natural gas equivalent per day
and midstream assets with approximately 420 miles of pipeline. As part of the transaction, Chesapeake has agreed to provide
essential services for up to one year for BHP Billiton's Fayetteville properties for an agreed-upon fee. The transaction is
expected to close in the first half of 2011.
Aubrey K. McClendon, Chesapeake's Chief Executive Officer,
commented, "We are pleased to announce the sale of our Fayetteville Shale assets to BHP Billiton and quickly achieve
substantial progress in implementing the debt reduction targets of our previously announced 25/25 Plan. BHP Billiton is a
premier global company and we look forward to working with BHP Billiton's management to ensure a smooth transition of operations."
"The Fayetteville shale is a world-class onshore natural gas resource," said J. Michael Yeager, Chief Executive
of BHP Billiton Petroleum. "The purchase of this long-life field immediately adds over 10 trillion cubic feet of gas
resources to our portfolio and is consistent with our strategy of investing in large, low cost assets with significant volume
growth for future development. Link
- Southwestern Energy SWN - Southwestern Energy SWN Fayetteville Shale - Arkansas - Fayetteville Shale Play – For the first
three months of 2012, Southwestern placed a total of 146 operated wells on production in the Fayetteville Shale play, all
of which were horizontal wells fracture stimulated using slickwater. At March 31, 2012, the company's gross production rate
from the Fayetteville Shale play was approximately 1,988 MMcf per day, up from approximately 1,725 MMcf per day a year ago.
Subsequently, the company surpassed the milestone of 2.0 Bcf per day of gross operated production from the play on April 12
and, on May 2, celebrated the milestone of cumulative gross operated production of 2.0 Tcf of natural gas from the play since
2004. The company is currently utilizing 13 drilling rigs in its Fayetteville Shale play, including 8 that are capable of
drilling horizontal wells. The graph below provides gross production data from the company's operated wells in the Fayetteville
Shale play area through March 31, 2012.
During the first quarter of 2012, the company's horizontal wells had an average
completed well cost of $2.8 million per well, average horizontal lateral length of 4,743 feet and average time to drill to
total depth of 7.3 days from re-entry to re-entry. This compares to an average completed well cost of $2.8 million per well,
average horizontal lateral length of 4,703 feet and average time to drill to total depth of 7.3 days from re-entry to re-entry
in the fourth quarter of 2011. In the first quarter of 2012, the company had 26 operated wells placed on production which
had average times to drill to total depth of 5 days or less from re-entry to re-entry. In total, the company has had a total
of 130 wells drilled to total depth of 5 days or less from re-entry to re-entry.
In April, the company created SWN Well
Services, L.L.C., a wholly-owned subsidiary which began ordering fracture stimulation equipment for two spreads that will
be operated in the Fayetteville Shale area. The company estimates that the first of the two frac spreads will be operational
in the fourth quarter of 2012, after which incremental cost savings should begin to accrue.
The company's wells placed
on production during the first quarter of 2012 averaged initial production rates of 3,319 Mcf per day. Results from the company's
drilling activities from 2007 by quarter are shown below.
The graph below provides normalized average daily production
data through March 31, 2012, for the company's horizontal wells using slickwater and crosslinked gel fluids. The "dark
blue curve" is for horizontal wells fracture stimulated with either slickwater or crosslinked gel fluid. The "red
curve" indicates results for the company's wells with lateral lengths greater than 3,000 feet, while the "purple
curve" indicates results for the company's wells with lateral lengths greater than 4,000 feet and the "light blue
curve" indicates results for the company's wells with lateral lengths greater than 5,000 feet. The normalized production
curves are intended to provide a qualitative indication of the company's Fayetteville Shale wells' performance and should
not be used to estimate an individual well's estimated ultimate recovery. The 2, 3 and 4 Bcf typecurves are shown solely for
reference purposes and are not intended to be projections of the performance of the company's wells.
Fayetteville Shale Map - Natural Gas - Arkansas
Click to Enlarge
- PetroQuest Energy PQ - PetroQest PQ announces update for Fayetteville Shale.
10 Bcfe of proved reserves at 12/31/09 - 348 Bcfe of probable and possible reserves at 12/31/09 - 18,000 net acres
- Paticipated in 65 horizontal wells in 2009 - Typical horizontal well - Reserves – 1.4 to 3.5 Bcfe - Completed
well cost - $1.8MM to $3.4MM - Maximum Rate – 1.2 to 3.9 Mmcf/day
- 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.
Exxon Mobil XOM - Exxon Mobil has aquired XTO Energy (XTO) Fayetteville Shale
assets in the aquisition. Exxon Mobil now has 550,000 acres in the Fayetteville Shale. Turning
now to our North American unconventional portfolio, on slide 11, we have approximately 70 rigs working across the United States
unconventional plays. These rigs are selectively deployed to the highest-priority locations from our large drilling inventory
of over 20,000 wells. For example, in the Fayetteville,
strong drilling results have doubled gross operated production between the beginning and end of 2010. During
the quarter, we acquired Petrohawk Energy's Fayetteville
shale assets, which include 150,000 net acres and 95 million cubic feet per day of net production. This represents an attractive
addition to XTO's existing position in the Fayetteville
play, which now comprises approximately 550,000 net acres.