Fayetteville Shale

Southwestern Energy Sets 2012 Fayetteville Shale Budget

Southwestern Energy (SWN) plans to spend $1.25 billion in capital in 2012 in the Fayetteville Shale, down from $1.32 billion in 20111.

Southwestern Energy estimates that the company will participate in approximately 580 to 590 gross wells in the Fayetteville Shale play in 2012, including 490 to 500 gross operated wells.  In 2011, the company participated in 632 gross wells in this play.

On a net wells basis, Southwestern Energy will drill between 440 and 450 net wells, down from approximately 479 net wells in 2011.

Southwestern Energy estimates that the company’s natural gas production from the Fayetteville Shale will range from 475 Bcf to 480 Bcf in 2012.  In 2011, production is expected to range from 433 Bcf to 435 Bcf from this play.

Southwestern Energy - Fayetteville Shale - Third Quarter of 2011 Update

Southwestern Energy (SWN) made significant progress on its development program in the Fayetteville Shale during the third quarter of 2011 and disclosed an update on recent operations here.

• 132 operated wells put onto production.
• Gross production of 1.9 Bcf per day as of 10/23/2011.
• Operating 19 rigs (12 horizontal and 7 vertical).
• Average drilling and completion cost of $2.8 million per well.
• Average lateral length of 4,847 feet.
• Average time to drill to total depth of 7.8 days.
• Average initial production rates of 3.4 million cubic feet per day.

Southwestern Energy reported that twenty five Fayetteville Shale wells were drilled in less than five days.

Chesapeake Energy Sells Fayetteville Shale Properties

Chesapeake Energy (CHK) announced the sale of its leasehold and other properties in the Fayetteville Shale in Arkansas to BHP Billiton Petroleum (BHP) for $4.75 billion.

Chesapeake Energy reported current net production of approximately 415 million cubic feet of natural gas equivalent per day from its Fayetteville Shale properties.  The deal also included 420 miles of pipeline.

Chesapeake Energy had proved reserves of 2.5 Tcf at 9/30/2010, indicating a value of $1.93 per mcf of proved reserves.  However, the pipeline assets are included in the sale price, so if you back out approximately $300 million in value for these assets, the proved reserves are valued at $1.82 per mcf.