Haynesville Shale

Southwestern Energy - Haynesville Shale Update

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 Haynesville Shale.

Haynesville Shale Reserves And EUR’s

“I believe the EUR is just over 5 Bcf on our wells.”

“It was a total of 30 Bcf for the Haynesville and that included seven proved locations and 10 PUDs for a total of 17 locations.”

Haynesville Shale Joint Ventures

“If you think about joint ventures in general, it’s just another way to provide some kind of capital. And at this point, as we said, we can manage what we need to do by just moving rigs around or moving rigs up or down. So I don’t think right now thinking about joint ventures anywhere, whether at Haynesville or anything else.”

“The kind of average thickness for the Haynesville is just over 100 feet. And if the Bossier works, its average thickness is very similar to that.”

Haynesville Shale Restricted Choke

“Well, we’ve only got seven wells worth of information. So I can tell you we haven’t been able to do much work with whether it’s better to put it on production on a one rig versus another rig as we go through. So that’s something on our list to learn, but with only one year of production and seven wells, we just don’t have enough information to really give you much thought there.”

Source: Seeking Alpha

Southwestern Energy Ramps Up Haynesville Shale Development

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 Haynesville Shale.

Southwestern Energy is at an early stage of its development program here, and is currently completing its sixth Haynesville Shale well.

“We also kicked off our drilling program targeting the Haynesville and Middle Bossier shales in Shelby and San Augustine counties in 2009 with very good results.”

“After our first horizontal well production tested at 7.2 million cubic feet per day in the first quarter of 2009, we have drilled four additional wells in the Haynesville Shale, which production tested 13.4, 16.7, and 21.0 million a day, and 18.1 million per day respectively. Additionally, we completed our first well in the Middle Bossier formation, which production tested at 11.3 million cubic feet per day.”

“We are currently completing our sixth Haynesville well, the Red River 620 1-H, and drilling two additional Haynesville wells in the area, the Red River 619 Number 2 1-H and the Owens Number 1, both of which will be completed sometime in the second quarter. In total, we have approximately 42,300 net acres we believe are prospective for the Haynesville and Middle Bossier shales, and our average gross working interest is approximately 61%.”

Source: Seeking Alpha

GMX Resources Thrown Out By The Market

The market has brutally sold off many exploration and production stocks with leverage to natural gas, including ones with exposure to the Haynesville Shale. This is due to the weakness in natural gas prices and the concern with large supply additions over the next year as the rig count ramps up in 2010.

GMX Resources (GMXR) has been one of the worst hit stocks in the natural gas led sell off. The company has other issues as well, but at $8.00 per share, it is now selling below its price at the bear market low in March 2009. 

Haynesville/Bossier Shale - GMX Resources Summary

GMX Resources has 42,400 net acres in East Texas that is prospective for the Haynesville Shale. This acreage is located in Harrison, Marion and Panola County.  GMX Resources plans to drill 22 gross Haynesville Shale wells in 2010.

Proved Reserves – 26 BCFE using SEC pricing

Proved Reserves – 114 BCFE using 12/31/2009 pricing

Estimated Ultimate Recovery – 6.5 BCFE

Drilling Locations – 279