Haynesville Shale

SM Energy Cuts Haynesville Shale Budget For 2012

SM Energy (SM) has decided to reduce the company’s operated drilling program in the Haynesville Shale due to low prices for natural gas.

SM Energy will now spend from $35 million to $40 million in capital in the Haynesville Shale in 2012, and cut four wells from its program during the year.  The company said that once its 2012 drilling is completed, it will have approximately 80% of its operated Haynesville shale acreage held by production.

EXCO Resources To Reduce Haynesville Shale Drilling In 2012

EXCO Resources (XCO) announced a 2012 capital budget totaling $710 million, with $585 million allocated to development and completion activities across the company’s portfolio.  The company’s budget reflects a decrease in spending in the Haynesville Shale relative to 2011.

EXCO Resources plans to spend $453 million to develop the Haynesville Shale in 2012, along with an additional $16 million in lease acquisitions and other operations.  The company will operate 13 rigs in 2012 in the Haynesville Shale.

EXCO Resources said that the reduction in cash flow was done in order to “manage our cash flow in the current natural gas price environment.” The company expects to complete all of its lease obligations during 2012 and convert all its acreage to held by production.  

2012 Highlights

• Operated well count - Drill and complete 98 gross or 30.2 net wells.
• Non operated well count – 22 gross or 0.6 net wells.
• Completion of 22 gross or 7.7 net wells drilled in 2011.
• Holly Area – in DeSoto and Caddo Parish, Louisiana - 8 rigs
• Shelby Trough – Nacogdoches, San Augustine and Shelby Counties, Texas - 5 rigs

In the Shelby Trough area, EXCO Resources will focus drilling in areas where previous wells produced in excess of 30 million cubic feet of natural gas per day during initial periods.

Petrohawk Energy Issues Haynesville Shale Update For 2010

Petrohawk Energy (HK) issued an operational update on its development activities on properties prospective for the Haynesville Shale in Texas and Louisiana.  The company has 225,000 net acres, with 170,000 operated by the company, and 55,000 non-operated.

Petrohawk Energy drilled 351 total wells into the Haynesville Shale in 2010, with 101 wells operated, and 250 wells non-operated.  The company is operating 16 rigs in the play and will drill 57 wells by the middle of 2011.  After that, the company will reduce its operated rig count to 7 rigs and drill 31 additional wells.

Petrohawk Energy has been engaged in a drilling frenzy in the Haynesville Shale the last few years in order to convert its term acreage to held by production, and the company estimates that 280 operated sections and 590 non-operated sections will held by production by the end of 2011.  Petrohawk Energy reported that it will have to drill another 145 wells in 2012 (25 operated and 120 non-operated) to complete the lease capturing process in the Haynesville Shale.