Forest Oil (FST) held a conference call on November 2, 2010, to discuss earnings for the third quarter of 2010, and discussed the company’s activities in the Haynesville Shale in Texas and Louisiana.
“And then cost pressures that are today existing in East Texas and North Louisiana could be relieved somewhat in mid-2011 as activity comes down particularly in the Haynesville, which will allow us to move back in with that.”
“In the Haynesville/Bossier play, three additional wells were completed during the quarter. Additional rates from these wells were curtailed to 11 million to 13 million cubic feet per day.”
“Our first rate curtailed wells are still performing well and we have now exceeded the same cumulative production from the initial wells after approximately 90 days, very encouraging result.”
“With our Red River Parish acreage now being held by production and service costs, particularly fracturing costs remaining high in this play, we have shut down the operated drilling program for the remainder of 2010.”
“Fracturing costs are reflective of $7 to $8 gas price environment at this time, and with the current strip being well below that level, we would expect stimulation cost to decrease in this area as we are not the only company reducing rig counts in the play.”