Southwestern Energy (SWN) held a conference call on February 26, 2010, to discuss fourth quarter of 2009 earnings. The company provided extensive operational details on its properties in various shale plays including the Marcellus Shale.
Southwestern Energy is at an early stage of its development of the Marcellus Shale and spent most of 2009 acquiring acreage in different areas in Pennsylvania.
“At December 31, 2009, we had approximately 149,000 net acres in Pennsylvania prospective for the Marcellus Shale. Our undeveloped acreage position as of December 31, 2009 and average remaining lease term of five years and average royalty interest of 13% and was obtained at an average cost of $594 per acre.”
“During 2009 we invested $40 million in Pennsylvania, almost all of which were acquisition of acreage, including approximately 22,800 net acres in Lycoming County that was purchased for $8.7 million or $382 per acre. We are currently drilling our first horizontal well since 2008 in Pennsylvania. The Heckman Camp Number 1 well is located in Bradford County and first gas production is expected in the area in the second quarter of 2010.”
“The rigs that we’re running will drill between 20 and 24 wells this year. It is going to be all in Bradford County. It’s right on top of -- when I say right on top of, within a mile or two of the Stagecoach pipeline.”
“We will participate probably in another 20 wells. Most of those would probably be -- a little bit maybe in Bradford, but most will be in Susquehanna, and we will have minority interest in those wells, and whatever the operator there is, we will have to take away."
“We will say the one area that will have the less drilling over the next couple of years will be in Lycoming County. That’s more 2012 and beyond where we see much drilling there.”
Source: Seeking Alpha