Haynesville Shale Formation - Company Stocks Involved
in Drilling and/or Acreage- Shreveport Shale
If you've been following the Haynesville Shale Story, you've probably noticed that the stocks of the companies involved exploded to the upside when Natural Gas
prices were soaring through the roof in 2008. Most companies that were very active in the Haynesville Shale saw their
stock prices double and triple in price. The recent decline in the stock market popped the bubble in energy prices.
This provides a great buying opportunity for the companies below. In a few years, you might see these stocks double or
triple again if natural gas prices move higher. I not only produce the Top 2009 Stock Gainer List every day I watch it closely. Below is a list of public companies that are drilling in the haynesville shale.
Chesapeake Energy - CHK - Chesapeake has been making deals and acquiring more acreage in the Haynesville Natural
Gas Field. This company is pretty much the top operator here with all the knowledge and experience.
2009 Update:Haynesville Shale (Northwest Louisiana, East Texas): Chesapeake is the
largest leasehold owner and most active driller of new wells in the Haynesville Shale play in Northwest Louisiana and East
Texas. Chesapeake now owns approximately 510,000 net acres of leasehold in the Haynesville Shale play. Chesapeake also has
approximately 175,000 net acres of leasehold it believes is prospective for the Bossier Shale, which is not yet included in
its unproved reserve estimates above. Chesapeake and its 20% joint venture partner, Plains Exploration & Production Company
(NYSE:PXP) (which owns approximately 110,000 additional net acres), have drilled and completed 137 Chesapeake-operated horizontal
wells in the Haynesville play and continue to experience outstanding drilling results. During the 2009 third quarter, Chesapeake’s
average daily net production of 229 mmcfe in the Haynesville increased approximately 67% over the 2009 second quarter and
approximately 573% over the 2008 third quarter. Chesapeake is currently producing a company record monthly average of approximately
330 mmcfe net per day (450 mmcfe gross operated) from the Haynesville and anticipates exceeding approximately 370 mmcfe net
per day (500 mmcfe gross operated) by year-end 2009, approximately 500 mmcfe net per day (670 mmcfe gross operated) by year-end
2010 and approximately 690 mmcfe net per day (930 mmcfe gross operated) by year-end 2011. To further develop its 510,000 net
acres of Haynesville leasehold, Chesapeake is currently drilling with 35 operated rigs and anticipates operating an average
of approximately 40 rigs in 2010 to drill approximately 190 net wells. During the first three quarters of 2009, approximately
$350 million of Chesapeake’s drilling costs in the Haynesville were paid for by its joint venture partner PXP. In August
2009, Chesapeake and PXP amended their joint venture agreement to accelerate the payment of PXP’s remaining joint venture
drilling carries as of September 30, 2009 in exchange for an approximate 12% reduction in the total amount of drilling carry
obligations due to Chesapeake. As a result, on September 29, 2009, Chesapeake received approximately $1.1 billion in cash
from PXP and, beginning in the 2009 fourth quarter, Chesapeake and PXP will each pay their proportionate working interest
costs on future drilling.
Two notable recent wells completed by Chesapeake in the Haynesville are as follows:
The Caspiana 13-15-12 H-1 in Caddo Parish, LA achieved a peak rate of 20.2 mmcf
per day; and
The Bradway 24-15-12 H-1 in Caddo Parish, LA achieved a peak rate of
18.6 mmcf per day. More.........
Goodrich Petroleum - GDP - Bethany-Longstreet Field, Caddo and DeSoto Parishes, Louisiana. In the Bethany Longstreet field,
the Company conducted drilling operations on five Haynesville Shale horizontal wells during the quarter. In addition, the
Company conducted completion operations on four and added a total of six wells to production during the quarter.
To date,
the Company has completed and added to production a total of eight Haynesville Horizontal wells in the Bethany Longstreet
field with an average initial production rate of 14,000 Mcf per day.
Within the existing joint venture with Chesapeake
Energy ("Chesapeake"), the Company is currently running two rigs and conducting completion operations on two wells.
Also
in the Bethany Longstreet field but outside of the existing joint venture with Chesapeake, the Company, as operator, has commenced
drilling the Plants 26 H-1 (36% WI), which is a horizontal well targeting the Haynesville Shale formation.
Greenwood-Waskom
Field, Caddo Parish, Louisiana. The Company, as operator, is also currently drilling the Trosper 2 H-1 (87.5% WI), its initial
Haynesville Shale horizontal well in the Greenwood-Waskom field. The Company currently plans to drill one additional well
in the field during the second half of 2009.
Beckville and Minden Fields, Panola and Rusk Counties, Texas
During the quarter, the Company conducted drilling operations on seven horizontal wells, four wells targeting the
Haynesville Shale and three wells targeting the Cotton Valley Taylor sand. In addition, the Company completed and added to
production three Haynesville Shale horizontal wells and one Cotton Valley Taylor sand well in the Beckville and Minden fields.
The
Company's most recent Haynesville Shale horizontal test, the Taylor Sealey 3H (100% WI), which was the Company's initial well
completed with both a desired lateral length and current flowback procedure, came online as previously reported at an initial
production rate of 9.3 MMcf per day and had a 30-day average of approximately 6.5 MMcf/day.
In addition, this quarter
the Company reached total depth on three other horizontal wells, one in the Haynesville Shale formation and two Cotton Valley
Taylor sand wells. These wells will be completed in the future at the Company's discretion. Goodrich
is also very active in the Cotton Valley Shale. More.........
PetroHawk Energy- HK - PetroHawk Energy HK is another big Haynesville Shale company. Haynesville Shale Leasing and Operational
Update: Petrohawk currently owns or has commitments to acquire over 300,000 net acres in what the Company believes are highly
prospective areas of the Haynesville Shale and Bossier Shale plays in Northwest Louisiana and East Texas. Approximately 50%
of the 300,000 net acre position is committed to the Company for longer than a three year lease term, extending the overall
timeframe for development of this substantial acreage position. Including acreage held by production, Petrohawk's cost in
the play currently averages approximately $5,000 per acre. Petrohawk's first well in the Haynesville
Shale, the Elm Grove Plantation (EGP) #63 (100% working interest), located in Bossier Parish, Louisiana, had an initial production
rate of 16.8 Mmcfe/d and has averaged 13.7 Mmcfe/d over the first 30 full days of production. Petrohawk's
second well in the Haynesville Shale, the Hutchinson 9-5 (91% working interest), is located in Caddo Parish, Louisiana.
The well was completed on July 29 and tested at a rate of 16.7 Mmcfe/d. Petrohawk Energy HK recently bought acreage
in the DeSoto Parish area. PetroHawk is also active in the Cotton Valley Formation. 2009 Update: During the quarter, the Company drilled a total of 13 operated and 19 non-operated
wells in the Haynesville Shale. The initial production rates for the 14 operated wells that were completed during the second
quarter wells ranged from 9.8 Mmcfe/d to 22.4 Mmcfe/d. These wells had an average initial production rate of 17.3 Mmcfe/d
and an average flowing casing pressure of 6,600 pounds per square inch (psi). All wells were tested on a 24/64" choke
with the exception of two that were tested on a 26/64" choke. The average initial production rate for 42 operated Haynesville
Shale completions to date, which excludes two wells that were mechanically compromised, is approximately 17.9 Mmcfe/d. Petrohawk
utilized 10 horizontal rigs and two pre-drill, or spudder, rigs on average in the Haynesville Shale during the second quarter
and exited the quarter with 12 horizontal rigs running.
At the end of the second quarter, 40 Company-operated wells were
on production with gross production of approximately 285 Mmcfe/d. After excluding two wells that encountered mechanical issues,
the Company had a total of 38 operated wells with at least 30 days of production. The average first 30-day production rate
of these 38 wells is 14.2 Mmcfe/d. More.........
Devon Energy DVN - Also in east Texas, Devon continued evaluating its Haynesville
Shale acreage in the greater Carthage area. The company has substantially de-risked 74,000 of its 110,000 net acres within
the Carthage area and has identified roughly 800 Haynesville drilling locations on this acreage. The company believes this
74,000 net acres has resource potential of more than three trillion cubic feet of natural gas equivalent. Devon is now drilling
a well in San Augustine County as the company also evaluates its acreage in the southern region of the Haynesville Shale.
More.........
XTO Energy- XTO - XTO Energy recently made an acquisition of Hunt Petroleum which will bring XTO energy into the Haynesville Shale formation
play. With this Hunt Petroleum buyout, XTO will gain acreage positions in East Texas, North & Central Louisiana
Haynesville Shale areas. The deal is supposed to close September 2008. Going into this deal, we have identified
hundreds of locations to expand recovery and access the multi-pay targets – including the Pettit, Rodessa, Travis Peak,
Cotton Valley and Bossier formations.” XTO Energy now has 100,000 Haynesville Shale Acres. XTO wants to pick up additional acreage and drill 3-4 horizontal wells
by the end of the year. XTO 2009 Update: We drilled first Haynesville shale well in
western Panola County, the New Horizon's number one that came in at 8.5 million a day, that is not an IP, that well averaged
over 8 million a day for the first 15 days. If we go from that to Stockman Fields in Shelby County, we drilled our first
Haynesville lime wells, before other companies
talked about this area it came in at 10 million a day. We have pretty extensive acreage position down there for development
as well. And then we brought in two James Lime horizontal wells at around 5 million a day in that same Shelby County area,
so we're pretty excited about that stuff More.........
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Forest Oil Company - FST - East Texas/North Louisiana Area – Haynesville/Bossier/Cotton Valley – Forest drilled and
completed its third and fourth Haynesville Shale wells in Louisiana in September and October of 2009. These two wells produced
into the sales line at an average initial 24-hour rate of 21 MMcfe/d and 15 MMcfe/d while still cleaning up fracture load.
Forest has an average 81% working interest in these wells. Forest intends to maintain a one to two rig drilling program in
Louisiana for the remainder of 2009. Forest Oil is also active in the Cotton Valley Formation. More.........
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Exco Resources - XCO - Exco Resources XCO is a new company getting into the Bossier/Haynesville
Shale play in a big way. During the second quarter 2009, our horizontal Haynesville Shale
development program yielded exceptional results with some of the highest production rates in the play. We also achieved significant
improvements in operational efficiencies. We completed 7 gross (4.1 net) operated horizontal Haynesville wells during
the second quarter 2009, and have 2 gross (0.9 net) currently in the completion phase and 6 gross (4.5 net) drilling. Our
average initial production rates in DeSoto Parish were 24 Mmcf per day for wells completed during the second quarter, with
a range of 21.2 – 26.4 Mmcf per day. We utilized four operated drilling rigs and one operated spudder rig in the quarter
and expect to add three additional drilling rigs during the third quarter 2009. We also participated in 3 gross (0.7 net)
non-operated wells in DeSoto Parish, Louisiana with initial production rates ranging from 14.4 to 24.5 Mmcf per day and 1
gross (0.3 net) well in Caddo Parish, Louisiana with an initial production rate of 10.2 Mmcf per day. At the end of the second
quarter, we had interests in 2 gross (0.1 net) non-operated horizontal Haynesville shale wells, 1 in the drilling phase and
1 in the completion phase.
We currently have 12 gross (8.4 net) operated
horizontal wells and 6 gross (1.2 net) non-operated horizontal wells flowing to sales. Production from our Haynesville wells
recently reached a combined gross rate of 174 Mmcf per day (72 Mmcf per day net). XCO is active in the Cotton Valley Field. More.........
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Cabot Oil & Gas- COG - Cabot COG in June acquired additional Haynesville Shale assets - 25,000 acres
in East Texas. These properties were acquired by Cabot to realize significant growth in production and reserves
and also to capture additional opportunity to exploit the Bossier/Haynesville. "Cabot has drilled 77 wells in the Minden
area on its 12,700 acres with a 100% success rate since our initial discovery in 2006. The acquired acreage lies in immediate
proximity to our existing acreage, which enhances our ongoing development of the Pettet, Travis Peak and Cotton Valley formations. There is also significant incremental exposure to the emerging Bossier/Haynesville opportunities. Update - In east Texas, Cabot confirmed that the Company and its partners are
flow testing its first horizontal Haynesville shale well. The well is hooked up to sales flowing back at this point, at approximately
21.0 Mmcf per day with a flowing casing pressure of 7,800 psi, after 11 days in line. Dinges added, "We anticipate that
the well will improve further as it continues to clean up frac fluid." The well is operated by Common Resources, and
Cabot is a 42 percent working interest partner.
"Our recent success affords us the opportunity to increase
our production guidance for the fourth quarter making the previous high end of guidance the low point and establishing a new
high level for the range," commented Dinges. "Additionally, we have also raised our capital program to cover the
potential results from a more extensive leasing effort in Marcellus." The new investment program is $580 million, which
will only be spent depending on leasing success.
Berry Petroleum - BRY - We plan to run one rig during 2009 and will drill approximately five vertical wells in the Oakes field during
the year and plan to begin drilling horizontal wells in the Haynesville Shale Darco field in the third quarter of 2009.
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Encana- ECA - Encana ECA recently announced that they have established acreage positions in the Haynesville Shale. The Deep
Bossier continues to be a leading near-term driver of EnCana's future production growth in East Texas. We strengthened
our position in the Haynesville gas resource play by acquiring 25,000 net acres, increasing our land position to about
400,000 net acres, plus 63,000 net acres of mineral rights. We currently have six rigs running with a focus on cost reduction and completion optimization. We will target drilling
and completing the first well in the mid-Bossier shale in the fourth quarter The Haynesville Shale is a very exciting emerging
play with a potential to rival the quality and scope of the Barnett shale play. With the few number of wells that were drilled in the Haynesville
so far, we've seen, and some of our competitors or industry competitors, have seen initial production rates which are
in the order of twice that of the ... some of the best wells ever drilled in the Barnett
Shale play. More.........
2009 Update: EnCana continues to see improved operational performance and strong initial production
rates from its Haynesville shale gas play. To date, EnCana has drilled 25 gross horizontal wells in the play. EnCana has increased
fracture stimulations in each horizontal well from eight to as many as 14. This efficiency initiative has helped increase
initial production rates and reduce well costs by about 35 percent from prior wells to an estimated $9 million per well. The
strongest well performance continues to be in the northern portion of the company’s Red River Parish leases where EnCana
has a joint venture with Shell. EnCana exited the second quarter with gross production from North Louisiana of about 100 MMcf/d.
EnCana is currently operating 10 rigs in the Haynesville Shale, up from five at the start of 2009, and is participating in
another four rigs operated by Shell.
EOG Resources - EOG - EOG has a deep inventory of natural gas prospects and reported excellent drilling results in the United
States. With four rigs operating in the Haynesville, EOG reported notable initial production rates from five wells recently
completed in DeSoto Parish. The Johnson 6#1 and DN Bell #1 flowed at initial gross production rates of 14.3 and 14.4 MMcfd
of natural gas, respectively. EOG has 64 and 100 percent working interest in the wells, respectively. The Thompson 11#1 was
completed at a gross rate of 14.9 MMcfd. EOG has 70 percent working interest in the well. The Lafitte 34 #1 and Billingsley
35 #1 began sales at gross rates of 15.7 and 14.6 MMcfd, respectively. EOG has 65 and 63 percent working interest in the wells,
respectively.
Penn Virginia PVA - Penn Virginia PVA has had success drilling the Haynesville Shale in East Texas
- During the second quarter of 2009, we drilled two (2.0
net) operated Lower Bossier (Haynesville) Shale horizontal wells, both of which were successful. Production in the second
quarter averaged 40.9 MMcfe per day, seven percent higher than the 38.1 MMcfe per day produced in the second quarter of 2008
and flat as compared to the 40.9 MMcfe per day produced in the first quarter of 2009. The year-over-year increase in quarterly
production was entirely attributable to initial contributions from the Lower Bossier Shale play. Lower Bossier Shale production
averaged 16.8 MMcfe per day during the second quarter of 2009, a 57 percent increase over the 10.7 MMcfe per day produced
in the first quarter of 2009. There was minimal production from this play in the second quarter of 2008 when results from
our initial Lower Bossier Shale well were reported.
As previously announced, during the second quarter, we successfully
completed the Steele #2-H well (100 percent working interest) which tested at an initial production rate of approximately
11.4 million cubic feet of natural gas per day with a flowing casing pressure of approximately 4,600 pounds per square inch
(psi). The well had an approximate 4,000-foot lateral and was stimulated with approximately 2.5 million pounds of sand and
bauxite over ten stages. In its first 30 days on production, this well averaged 8.0 MMcfe per day. This well has the highest
initial production rate of any Lower Bossier Shale well we have drilled to date in East Texas.
During the second quarter,
we successfully completed the J.M. Furrh #2-H well (100 percent working interest) which tested at an initial production rate
of approximately 9.6 million cubic feet of natural gas per day with a flowing casing pressure of approximately 2,800 psi.
The well had an approximate 4,500-foot lateral and was stimulated with approximately 3.0 million pounds of sand and bauxite
over ten stages. In its first 30 days on production, this well averaged 6.5 MMcfe per day.
Over the past five quarters,
we have tested the Lower Bossier Shale potential across much of our acreage with 16 wells, including one well which was completed
and produced at non-commercial rates as previously disclosed. We have been very encouraged by the results of this horizontal
test program, including recent enhancements in drilling and completion methods, and have concluded that the majority of our
acreage warrants an active development program going forward. The 15 successful horizontal wells in the program had an average
initial production rate of 5.4 MMcfe per day (30-day average rate of 3.6 MMcfe). The typical completion for the first 14 wells
was a fracture stimulation with between 1.0 and 1.5 million pounds of proppant over as many as eight stages.
The final
two wells drilled and completed, and discussed above, had two additional frac stages and significantly more proppant pumped
compared to the previous wells. In addition, we believe the placement of the lateral within the Lower Bossier Shale interval
along with the direction of the lateral has also improved the completion results. Going forward, we expect the typical drilling
and completion cost to be between $8.0 and $8.5 million as the result of higher completion costs. We believe higher initial
production rates, similar to the last two wells, will justify these higher costs.
GMX Resources- GMXR - GMX Resources will start to drill the Haynesville Shale this
month. GMX has 43,032 net operated acres including 38,455 acres of Haynesville/Bossier shale giving them the most Haynesville
shale acres per share as compared to all other public companies. GMX has major drilling locations in Texas: Harrison,
Marion, Cass Counties - In Louisiana: Caddo Parish.
The Company is currently rigging up with its second FlexRig(TM) 3 (Helmerich & Payne # 420)
to drill H/B Hz wells in its East Texas acreage. It is expected that proceeds from the previously announced offerings will
provide enough liquidity to include its third contracted rig and possibly its fourth contracted rig in its 2010 active drilling
program. With the activation of the second H/B Hz rig, the Company is increasing its anticipated 2009 capital expenditure
guidance from $157 million to $175 million. Anticipated 2010 capital expenditure guidance ranges from $180 million for a three
H/B Hz rig drilling program to $220 million if the fourth contracted rig begins H/B Hz drilling in late March 2010 as scheduled.
More.........
Anadarko Petroleum APC - Anadarko has more than 80,000 net acres in the prospective
fairway of the Haynesville Shale, the majority held by production underneath our
producing fields in the Carthage area in Texas and Elm Grove in Louisiana. Anadarko operated one rig
in the haynesville shale and spud its 2nd horizontal well during the quarter.
Anadarko Petroleum ( APC ) 2010 Update - Anadarko continued activity in its Haynesville Shale play with one operated and one non-operated rig. The Anadarko
operated Letourneau 3-23 HH was completed with an initial production rate of 8 MMcf/d with 5,000 psi of flowing pressure.
Questar STR - Questar E&P has approximately 43,000 net acres of Haynesville Shale lease rights in northwest Louisiana ( the
heart of the core sweet spot ). The depth of the top of the Haynesville Shale ranges from approximately 10,500 feet to 12,500
feet across Questar E&P's leasehold and is below the Hosston and Cotton Valley formations that Questar E&P has been
developing in northwest Louisiana for over a decade. In 2009, Questar has drilled 19 new well completions. The company
has many wells over 20 MMcf's. The company has a history of making successful acquisitions and continues to pursue
acquisitions of producing properties (assets or corporate entities) to expand its presence in its core areas or create a new
core area. Questar is also involved in the Cotton Valley Field.
SandRidge Energy SD - Sandridge is active in the East Texas side of the Haynesville Shale -
East Texas/North Louisiana – Haynesville Shale Play:
The company controls approximately 36,000 acres
in the developing Haynesville shale play of East Texas and North Louisiana. About 22,500 acres of that
total are in Rusk and Harrison Counties, Texas. The company drilled two vertical test wells within the
Oakhill field area in Rusk County to evaluate the potential for Haynesville shale production. The initial
well had a total of 260 feet of Haynesville shale thickness and tested at a rate of 1.5 MMcfe per day.
The second well encountered 288 feet of shale thickness and is awaiting completion.
Plains Exploration PXP - The Haynesville Shale continues to deliver outstanding drilling results with 49 horizontal wells drilled and
completed. Production is currently 21 million cubic feet equivalent (MMCFE) per day net to PXP (160 MMCFE per day gross) with
approximately 9 MMCFE per day net to PXP (70 MMCFE per day gross) currently curtailed from the play.
Continental Resources CLR- Continental CLR is a new operator in the Haynesville Shale. They currently have 17,000 acres in Louisiana but are
not saying what parish they are in. They will be drilling their first well in the fourth quarter.
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Nabors Industries NBR - Nabors NBR supplies drilling rigs to Haynesville Shale companies/operators. We have 32 rigs
now working in the Haynesville Shale, compared to 20 at the beginning of the year, and we expect to have 40 or 50, probably closer
to 50 by the end of the year. Also, we have kind of a unique advantage, if an operator needs a rig, and he really wants a
built for purpose specialty design new build, and he needs a good rig right away, we can give him a rig to bridge the gap
between his requirements right now and when he will get the new build which could be 9, 10, 11, 12, 13 months from now.
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Encore Aquisition - EAC - Encore elected to exercise its preferential right to purchase the interest of its partners in its Greenwood
Waskom/Stateline prospect for total consideration of $54 million subject to customary closing adjustments. The Company closed
the acquisition July 15, 2008 and will immediately take over operations on five units currently producing from the Cotton
Valley formation. Encore will also acquire the Haynesville rights in each of these units. Encore's average working interest
and net revenue interest will be approximately 92 percent and 72 percent, respectively. This acquisition will add approximately
3,200 net acres to Encore's existing 12,800 net acres in the heart of the Haynesville play, giving Encore a total of 16,000
net acres. Encore also owns approximately 6,600 net acres in the rapidly expanding extensional area of the play for a total
of 22,600 net acres in the Haynesville play. Encore is currently permitting locations and expects to add a rig to begin developing
its acreage in the Haynesville play in late 2008.
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St. Mary Land & Exploration - SM - St. Mary SM is active in the Cotton Valley field as well as the Haynesville Shale under the Cotton Valley. The Company’s first vertical Haynesville well, the USA BL #1 (SM 100% WI), was drilled
and completed in northern San Augustine County, Texas. The well had a maximum seven day sales average of 1.9 MMCFED.
St. Mary believes this is a positive development for its Haynesville program. Studies performed by the Company and others
in the industry suggest that the potential IP of a horizontal well in the play can be estimated from a vertical well test
by multiplying by a factor of six to eight. Recent horizontal wells reported by offset operators have also provided encouraging
data points in the area. This well was cored and logged and the Company believes the rock quality is similar to some of the
better areas of the play in Louisiana. The second vertical well in the Haynesville program, the Blackstone PB #1 (SM
100% WI), is currently drilling in southern Shelby County, Texas. St. Mary has been shooting 3D seismic over its East Texas
acreage and expects to have the data by the middle of the first quarter of 2010.
Cubic Energy QBIK- Cubic QBC recently announced some key developments in their Haynesville Shale natural gas formation. The Estes
7 No. 1 is Cubic’s fourth Haynesville Shale well in its northwest Louisiana acreage, the Company will be able to drill
horizontally in the Haynesville Shale at a later date, after being vertically completed in the Haynesville Shale. The
Estes 7 No. 1 is Cubic’s first Haynesville Shale well to be drilled in the Company’s southern acreage position
of Bethany Longstreet.
Immediately following the drilling of the Estes 7 No. 1, the
Company will rig down and move to the Red Oak Timber 5 No. 1 also located in Cubic’s southern acreage of Bethany Longstreet.
Update - QBC spuds 5th well - The Red Oak Timber 5 No. 1 spud on Friday, August 1, 2008 and will be vertically drilled to approximately
11,950 feet using a casing program with 7 5/8” for the intermediate string. This will allow the Company
to drill horizontally in the Haynesville Shale at a later date, after being vertically completed in the Haynesville Shale.
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Mainland Resources MNLU- MNLU announced a joint venture with PetroHawk Energy HK regarding Mainlands 2,695 acres in East Holy Field, Desoto Parish.
PetroHawk will pay 100% of the cost to drill the first well in the Cotton Valley Formation and 80% of the second well.
For all of the other wells, PetroHawk will pay 60% of the cost and Mainland will pay 40%.
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Noble Energy NBL- One final item of note onshore in the US concerns our Shelby County, Texas acreage, where we brought in a partner on our
Hainesville potential. Petrohawk has joined in
our approximately 15,000 acre position and will operate the first four wells before we resume operatorship. This joint venture,
with Noble retaining 60% working interest, represents an excellent opportunity to partner with one of the leading developers
of the Hainesville Shale, and we look forward
to working together to better understand this emerging resource. Our first well spud late May and we should have results in
the third quarter. We are also participating in a 25% Hainesville
well in the Caspiana Field in Louisiana with another operator.
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Marathon Oil MRO- MRO is new to the Haynesville Shale - Marathon has 25,000 acres in the Haynesville Shale in Louisiana and
Texas and will start drilling in 2009.
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Southwestern Energy SWN - East Texas - In the second quarter of 2008, Southwestern signed a 50/50 joint
venture agreement with a private company targeting the Haynesville/Bossier Shale intervals in Shelby and San Augustine Counties,
Texas. The first horizontal well, the Red River 877 #1 located in Shelby County, reached total depth in the fourth quarter
of 2008, was production tested at 7.2 MMcf per day in the first quarter of 2009. The second horizontal well, the Red River
164 #1 located in San Augustine County, was production tested at 13.4 MMcf per day in the second quarter of 2009. The company
completed a third well, the Red River 619 #1 located in San Augustine County, which was production tested in the third quarter
of 2009 at 16.7 MMcf per day. A fourth well, the Burrows Gas Unit #1-H, is currently being tested. A fifth well, the Red River
257 #1 is waiting on completion. The company is currently drilling a sixth well, the Red River 257 #2 located in San Augustine
County. Southwestern plans to participate in at least one additional well during 2009. In total, Southwestern has approximately
32,800 net acres it believes is prospective for the Haynesville/Bossier Shale.
Southwestern participated in drilling 33 wells in East Texas during the first nine months
of 2009, 28 of which were James Lime horizontal wells. The company currently has 37 operated James Lime horizontal wells on
production which had average gross initial production rates of 9.5 MMcf per day. Southwestern’s current net production
from the James Lime is approximately 48 MMcf per day. Production from the company’s East Texas properties was 24.6 Bcfe
for the first nine months of 2009, compared to 24.1 Bcfe for the first nine months of 2008.
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Comstock Resources CRK - During the first nine months of 2009, Comstock drilled 38 wells (28.2 net), all of which were successful. Thirty-one
of the 38 wells drilled were horizontal wells. The Company's drilling program this year is primarily focused on developing
its Haynesville shale properties in East Texas and North Louisiana. Through the end of the third quarter, the Company has
drilled 28 horizontal wells (20.8 net) in the Haynesville or Bossier shale in 2009, 25 of which are currently producing. The
remaining three are in the process of being completed. As of September 30, 2009, Comstock was drilling six horizontal wells
and was also participating in the drilling of a non-operated horizontal well. All of these wells are targeting the Haynesville
shale.
Since the Company's last operational update, Comstock has completed three additional successful operated
Haynesville shale horizontal wells in DeSoto Parish in North Louisiana in addition to the seven reported on in the October
5, 2009 update. Two wells are in its Toledo Bend North field and the other is in the Logansport field.
In Toledo
Bend North, the BSMC 8 #1H was drilled to a vertical depth of 11,577 feet with a 4,541 foot horizontal lateral. The well was
completed with 12 frac stages and was tested at an initial production rate of 8.9 MMcfe per day. Comstock has an 88% working
interest in this well. The BSMC 9 #1H was drilled to a vertical depth of 11,610 feet with a 4,401 foot horizontal lateral.
The well was completed with 12 frac stages and was tested with an initial production rate of 10.4 MMcfe per day. Comstock
has a 77% working interest in this well. In the Logansport field, the Brown HZ #1 well was drilled to a vertical depth of
11,491 feet with a 4,254 foot horizontal lateral. The well was completed with 12 frac stages and was tested at an initial
production rate of 15.7 MMcfe per day. Comstock has a 76% working interest in this well. These ten third quarter operated
Haynesville shale wells were tested at an average initial production rate of 14.5 MMcfe per day per well.
Crosstex Energy XTXI - Crosstex XTXI has been drilling in Haynesville Shale. Prime locations in the Haynesville Shale included Harrison
County, Texas for XTXI
El Paso EP - El Paso continues to drill in the Haynesville Shale - ( From Seeking Alpha ) - We have an update for our Cotton Valley horizontal and Haynesville programs in the Arklatex.
El Paso Haynesville Shale Production -We started out below 10 million a day per well. And our most recent
well, the Blake 10H produced over 20 million a day, after 10 stages of fracs in the lateral. We’ll probably keep two
to four rigs running in the Arklatex that are capable of drilling these kind of wells, and we can drill somewhere in the neighborhood
of 15 to as many as 25 Haynesville wells this
year in 2009.
Unit Corp UNT - In the Haynesville trend in East Texas
we've now drilled five vertical wells in Shelby County. And we have two of the five wells hooked up to gas lines. Their early
production from these vertical wells on the first two wells has been somewhat disappointing, but certainly not conclusive
at this point. Both wells are currently flowing about 100 Mcfe a day and are experiencing some water loading problem.
We'll start drilling our first horizontal
Haynesville well later this month and we'll plan
to keep one or two Unit bridge drilling in the Haynesville
in the Shelby County area during the third quarter of this year.
In addition to the Shelby County activity, in addition
to our activity, another operator has just announced plans to drill the horizontal Haynesville well that's just adjacent to our acreage block and this should also give us additional information
and to evaluate our block.
The current plan for 2009 is to drill a total of approximately nine vertical wells and one
horizontal well in Shelby County at an approximate cost of $25 million.
In addition to the Shelby County, Haynesville, we also plan on drilling three vertical Haynesville wells in Harrison County, at an approximate cost of $6.5 million. .
