Haynesville Shale

Forest Oil Restarts Haynesville Shale Development

Forest Oil (FST) has reentered the Haynesville Shale and added a rig to this area.  The decision was based on the effectiveness of the restricted rate program that the company used on seven Haynesville wells in 2010. Another factor that motivated the company to deploy a rig here was a reduction in drilling and completion costs over the last year.   

Forest Oil believes that these seven wells will have an estimated ultimate recovery (EUR) that exceeds the 6.5 Bcfe curve. The company has drilled and completed its first Haynesville Shale well here and reported an initial restricted production rate of 12 million cubic feet of natural gas equivalents per day.

Conference Call Comments

“We resumed the Haynesville Shale drilling program based on the success of the restricted rate program combined with decreasing completion costs. Our first well in 2011 was completed for a restricted rate of 12 million cubic feet per day with over 8,600 psi of flowing casing pressure. We increased the number of frac stages on this well to 16. The comparable well that we drilled last year has produced 2.8 Bcf and continues to produce approximately 8 million cubic feet per day over the first 240 days of production.”

“This indicates the EURs from the restricted rate well should be in the order of 8 Bcf or an increase of approximately 25% over our earlier EURs. These results yield economic wells with the rate of return greater than 20% even in today's gas price environment. Further cost reductions will be obtained through pad drilling in 2012, as we have purchased a rig walking system to use with our lantern rigs for this area.”

Source

Comstock Resources Comments On Haynesville Shale Operations

Comstock Resources (CRK) held a conference call on November 2, 2010, to discuss the company’s earnings report for the third quarter of 2010.  During the call, Comstock Resources made comments on its operations in the Haynesville Shale.

Comstock Resources, like many operators in the Haynesville Shale, had trouble securing enough hydraulic fracturing capacity to complete its program.  The company reported 26 uncompleted wells at the end of the third quarter of 2010.

“We continue to have strong results in our Haynesville Shale drilling program; we drilled 58 successful wells including 54 horizontal Haynesville and Bossier Shale wells in the first nine months of this year.”

“We got off track from the strong production growth we had in the first two quarters of this year, due to the unavailability of high-pressure pumping services that are needed in order for us to complete our Haynesville Shale wells.”

“We reported earlier that we have secured completion services, starting in the fourth quarter, which will allow us to timely complete the Haynesville Shale wells we are currently drilling and begin to address the backlog of 26 wells waiting on completion that we had at the end of the third quarter.”

“Despite the production setback, we are anticipating strong reserved growth this year driven by our Haynesville Shale drilling program… We think our Haynesville shale program could add 400 to 500 Billion cubic feet equivalent of proved reserves in 2010.”

“Our East Texas/North Louisiana region averaged a 134 million per day with…85 million per day coming from Haynesville Shale wells. The Haynesville wells made up 45% of our total rate.”

“We plan on releasing another rig this month from our Haynesville program and we are considering to releasing two more rigs as we determine what we want to spend on our 2011 CapEx program.”

Source

Forest Oil - Third Quarter Of 2010 - Haynesville Shale Comments

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.”

Source