September 11, 2008

Southwestern Energy’s Fayetteville Output Nears 500 MMcfd

By Anonymous

Southwestern Energy Co., Houston, said its gross operated production from the Fayetteville shale play area in northcentral Arkansas was 500 MMcfd of natural gas, including 12 MMcfd from 14 wells producing from conventional reservoirs. The company has 85 7,000 net acres in the play The production rate a year ago was 200 MMcfd.

The company projected that estimated ultimate recovery could be improved by 15-20% from horizontal wells on which it has employed closer perforation cluster spacing. It tested the technique on 3 8 wells in the first half of 2008 and plans to use it on all of its wells the rest of the year.

The company, running 22 rigs in the play, is drilling longer laterals generally and plans to test spacing of 80 acres or less later in 2008. It said its knowledge of how to drill and complete wells in the shale is "consistendy improving."

Southwestern placed 83 wells on production at an average 2.54 MMcfd in the quarter ended June 30, compared with 58 wells at 1.26 MMcfd in the quarter ended Mar. 31, 2007. Lateral length averaged 3,562 ft vs. 2,104 ft.

For the quarter ended Mar. 31, 2008, when 7 5 wells went on production, those 7 5 wells averaged 2.15 MMcfd after 3 0 days, and 7 2 of the wells averaged 1.93 MMcfd after 60 days.

The company had drilled and completed 619 operated wells, 554 of them horizontal, as of June 30. The wells produced 29.6 bcf of gas in the quarter ended June 30 at an average realized price of $8.17 / Mcf. The wells are in 33 pilot areas in eight counties in Arkansas.

Southwestern hired 69 employees in the quarter, most of them in the E&P segment.

Other public companies with substantial acreage or operations in the play include Chesapeake Energy Corp., XTO Energy Inc., Petrohawk Energy Inc., Carrizo Oil & Gas Inc., Pe tro Quest Energy Inc., Storm Cat Energy Corp., Talisman Energy Lnc.-Hallwood Energy LP, and Edge Petroleum Corp., which is to merge with Chaparral Energy Inc.

Copyright PennWell Corporation Aug 11, 2008

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