Barnett Shale

Quicksilver Resources - Barnett Shale Comments

Quicksilver Resources Inc. (KWK) held an earnings conference call on November 3, 2009, and discussed its operations in the Barnett Shale. The company has a large inventory of uncompleted wells in the Barnett Shale that it plans on whittling down during 2010.

“On the operational side our Barnett program is really going well. Over the last several years we have put the infrastructure in place both in the field and with personnel to maximize the recovery and margins from our larger acreage position. You are now seeing the results on both the volume growth and cost sides. Having large contagious acreage blocks has enabled us to optimize well spacing, lateral links, and streamline the surface facility.”

“The importance of natural gas liquids in our Southern Fairway is becoming clearer to the investment community. Our economics are compelling and those higher equivalent prices I mentioned earlier will allow our operating team to begin to work down our uncompleted well inventory in the Barnett South area. We have locked in certain service costs for lease.”

“We are going to have still five rigs running in the Fort Worth Basin. Those five rigs will do roughly a 100 wells next year, which is similar to what we drilled in 2009, however, we expect to complete every well that we drill in 2010.”

Source: Seeking Alpha

EOG Resources - Barnett Shale Update - Part II

EOG Resources Inc. (EOG) held its third quarter earnings conference call on November 9, 2009 and discussed the Barnett Shale. EOG Resources is planning a large capital program here in 2010, and will drill 225 wells in the Barnett Shale Combo play in 2010.

Vertical vs. Horizontal Wells

“Where the Barnett is between 700 and 1500 foot thick we use vertical wells on 20 acre or even more dense spacing. …where the Barnett is less than 700 feet thick, we’ll be using horizontal wells.”

Barnett Shale Capital Plans

“We plan to run a 12 drilling rigs in the Combo, seven horizontal and five vertical compared to only two rigs in the gas portion of the Barnett. We expect to drill 225 Combo wells in 2010 compared to 100 this year.”

Vertical vs. Horizontal Acreage

“Somewhere between 10 to 15% of that acreage would be vertical territory that is of the 90,000 core acres and reminder horizontal.”

Source: Seeking Alpha

EOG Resources - Barnett Shale Update - Part I

EOG Resources Inc. (EOG) held its third quarter earnings conference call on November 9, 2009 and discussed the Barnett Shale. EOG Resources provided a total company organic production growth target of 13% for 2010, including liquids growth of 50%. The company refers to this as the Barnett Shale combo play, since it is primarily oil, and to distinguish it from the Barnett Shale to the south, which is mostly natural gas.

Barnett Shale Combo Acquisitions

“We acquired 7800 net acres and 350 barrels of equivalent oil per day of net production for $63 million. Following the acquisition reported last quarter this provides us near total dominance in the 90,000 acre Combo Core area of Eastern Montague and Western Cooke Counties.”

Acreage

“This portion of the Barnett contains an average of 70 million barrels of oil and 175 Bcf gas in place per 640 acres, it’s one of the richest oil deposits we’ve ever encountered. We’re developing this Combo asset with both vertical and horizontal wells.”

Barnett Shale Combo Returns

“We expect the average vertical well to produce 220 Mboe net after royalty for a $2.2 million cost yielding a 70% after tax reinvestment rate of return at current NYMEX strip prices.”

Source: Seeking Alpha

Devon Energy - Barnett Shale Update

Devon Energy (DVN) reported third quarter earnings and discussed the Barnett Shale during its conference call held on November 4, 2009. Devon Energy saw its production fall in the Barnett Shale due to its reduced activity in this area.

Barnett Shale Production

“Net production in the Barnett averaged 1.1 Bcf equivalents per day for the quarter, 7% below the second quarter of this year. This decrease is consistent with our reduced activity in the field and the decision to both reduce incremental compression and push completions back to late in the year.”

Barnett Shale Completions

“At September 30, we had 159 Barnett wells awaiting completion. In addition, we plan to drill 48 wells in the fourth quarter. By picking up completion activity late in the fourth quarter, we now expect to work that inventory down to approximately 150 wells awaiting completion by year end.”

2010 Barnett Shale Plans

“We are ramping activity up going into 2010 on most of our major gas plays. We expect to have 16 operated rigs running in the Barnett as we enter 2010.”

Source: Seeking Alpha

Quicksilver Resources - Barnett Shale Update

Quicksilver Resources Inc. (KWK) issued an operations update on its Barnett Shale activities. The company continues to develop its projects at Alliance and Lake Arlington in the Fort Worth Basin of the Barnett Shale.

Alliance Project

Quicksilver Resources is currently producing 71 million cubic feet (MMcf) per day of natural gas at its Alliance project, with 129 wells producing. The company said that over the last 45 days, 24 new wells have been brought on line, and 24 wells have resumed production.

Lake Arlington

Quicksilver Resources is currently producing 34 million cubic feet (MMcf) per day of natural gas at its Lake Arlington project. Thirty-nine wells are currently producing, and Quicksilver has deferred completion on 39 other wells that have been cased and drilled.

Range Resources Comments On Barnett Shale

Range Resources Corp. (RRC) made the following comments on the Barnett Shale during its third quarter earnings conference call held on October 22, 2009.

Rig Count

“We’ve decreased our rig count from about six rigs at the beginning of the year to one currently, we’ve driven production up from 110 million at the beginning of the year to about 130 million per day today.”

Rate of Return

“The rates of return on our Barnett wells are still very good. Even at $5 gas, they’re still 32%.” Acreage “We have many locations to drill in the Barnett, but fortunately, we don’t have any significant drilling commitments. The bulk of our acreage in the quarter, where our remaining locations exist, is largely held by production.”

Source: Seeking Alpha

___________________________________________________________________

Do you use technical analysis to find the proper entry point before you buy a stock? Then Click Here for a free Trend Analysis.

Devon Energy Discusses The Barnett Shale

Devon Energy (DVN) made the following comments regarding its operations in the Barnett Shale during its second quarter of 2009 conference call held on August 5, 2009:

Operations

“We are currently running eight Devon operated rigs. During the second quarter, we brought 98 operated Barnett wells online with an average IP rate of 2 million cubic feet per day. We are continuing to improve drilling efficiency in the Barnett and recently set a record by drilling and completing a well in nine days from spud to rig release.”

Production

“We believe that we can still comfortably drill to 229 Barnett wells planned for 2009. Our net production in Barnett averaged 1.2 Bcf equivalent per day in the second quarter, a 12% increase over the second quarter of 2008 and essentially flat with the first quarter of 2009.”

 “We did however see Barnett production begin to fall in July as a result of our lower activity levels. Given the reduction in drilling and lower levels of compression in the Barnett, we expect to exit 2009 producing about 1 billion cubic feet of natural gas equivalent per day here.”

Source: Seeking Alpha ___________________________________________________________________

Do you use technical analysis to find the proper entry point before you buy a stock? Then Click Here for a free Trend Analysis.

Texas Independence Pipeline Completed

Energy Transfer Partners LP (ETP) just recently announced the completion of the Texas Independence Pipeline, a 160 mile pipeline that serves the Barnett Shale in Texas. The pipeline originates in Maypearl, Texas and runs to Henderson, Texas. The pipeline adds capacity of 1.1 billion cubic feet (BCF) per day in the Barnett Shale, and Energy Transfer Partners LP said that with compression the capacity could be expanded to 1.75 BCF per day.

Quicksilver Resources - Barnett Shale

Quicksilver Resources (KWK) reported earnings for the second quarter of 2009, and updated its operations in the Barnett Shale of the Fort Worth Basin. The company has 175,000 net acres under lease and drilled 29 (22.9 net) wells during the quarter. The company also connected 27 (25.2 net) wells to sales.

Although many exploration and production companies are shifting away from the Barnett Shale to other shale plays in North America, Quicksilver Resources defended the Barnett Shale during its second quarter conference call.

“The Barnett continues to be the focus of our development activity. Despite speculation of its demise, the Fort Worth Basin is alive and well and providing increasing opportunities for Quicksilver. The Fort Worth Basin-Barnett is a proven area of low risk, low cost development with readily available infrastructure and access to services,” said Glenn Darden, the CEO of Quicksilver Resources.

Many operators are drilling but not completing wells as they anticipate higher natural gas prices later on in 2009 or 2010, and Quicksilver Resources is no exception.

“We project our inventory of drilled and cased but uncompleted wells in the Barnett to increase to approximately 150 wells by year end.” Costs are also falling, and the management of Quicksilver Resources indicated that year over year, the cost to drill is down 25%. ___________________________________________________________________

Do you use technical analysis to find the proper entry point before you buy a stock? Then Click Here for a free Trend Analysis.

Carrizo Oil and Gas - Barnett Shale

Carrizo Oil and Gas (CRZO) updated its operations in the Barnett Shale when it released its second quarter of 2009 earnings. Carrizo Oil and Gas produced 80 million cubic feet per day of natural gas from its Barnett Shale properties, and has three rigs working in that area.

The company said that it has 39 wells in the Barnett Shale that are drilled and not completed. These wells represent 87 million cubic feet equivalent per day of initial production. The industry has hundreds of wells in this type of status, as operators wait for natural gas prices to recover.

Chip Johnson, the CEO of Carrizo Oil and Gas said “I mean, at some price if we can sell all the gas at $6 NYMEX, which is what the strip is now, I think for 2010, we’d probably produce it.”

Lease prices have also dropped markedly in the Barnett Shale as drilling shifts to other shale plays. “The prices have dropped as low as 3 to 5,000 per acre in areas where they were 20,000 per acre last year… some holdouts in the core that still think they can get 15,000 per acre, but in general it’s dropped off below 10,000.” ___________________________________________________________________

Do you use technical analysis to find the proper entry point before you buy a stock? Then Click Here for a free Trend Analysis.