Southwestern Energy (SWN) held a conference call on February 26, 2010, to discuss fourth quarter of 2009 earnings. The company provided a detailed operational report on its properties in various shale plays including the Fayetteville Shale.
The company has aggressively increased proved reserves in the Fayetteville Shale over the last year, boosting proved reserves to 3.1 Tcf at the end of 2009. This was an increase of more than 100%.
Fayetteville Shale Reserves
“Our year-end proved reserves increased by 67% to a record 3.7 Tcf equivalent. Approximately 100% of our reserves were natural gas and 54% were classified in proved developed, down to 8% from 62% in 2008. We are also one of the few companies that have recorded net positive reserve revisions as the improving performance from our Fayetteville Shale wells more than offset negative price revisions due to low gas prices.”
“We invested approximately $1.3 billion in our Fayetteville Shale drilling program during 2009, adding 1.8 Tcf of new reserves at an F&D cost of $0.69 per Mcf. This includes net upward reserve revisions of approximately 238 Bcf, as our improved well performance more than offset negative revisions due to lower gas prices. The finding and development cost, excluding these revisions, was $0.80 per Mcf.”
“Total proved net gas reserves booked at the Fayetteville Shale play at year-end 2009 were 3.1 Tcf, more than double the reserves booked at the end of 2008.”
Fayetteville Shale PUD’s
“The average gross proved reserves for the undeveloped wells, including our year-end 2009 reserves, was approximately 2.2 Bcf per well, up from the 1.9 Bcf per well at the end of the year 2008. And based upon current drilling phase, we have approximately two years of drilling inventory booked as PUDs.”
Source: Seeking Alpha