El Paso (EP) has 20,000 net acres prospective for the Haynesville Shale in the Holly area in Desoto Parish, Louisiana. The company estimates that this acreage is economic at a natural gas price below $4.00 and disclosed the following details on wells here:
Holly Overview
Haynesville Shale wells in the Holly area are typically drilled to a depth from 11,000 to 12,500 feet with a horizontal lateral of 4,300 to 4,600 feet. The average well costs from $8.7 million to $9.3 million and has an estimated ultimate recovery ranging from 6 to 7 Bcfe.
Holly wells drilled by El Paso have an initial production rate from 15 to 25 million cubic feet of natural gas equivalents per day and average between 12 and 20 million cubic feet of natural gas equivalents during the first thirty days of production.
El Paso estimates that wells here have an internal rate of return from 20% to 30% at prices of $4.00 per MMBtu for natural gas and $80 per barrel for oil. Finding and development costs for Holly wells range between $1.55 and $1.95 per Mcfe.
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