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.

Comstock Resources Cuts Operated Haynesville Shale Development

Comstock Resources (CRK) announced that the company would end all operated development of its Haynesville Shale properties by March 2012.  The company took the action due to low natural gas prices.

Even with the drilling reduction, Comstock Resources plans to spend $106.8 million in 2012 on its Haynesville Shale properties.  This includes $45.4 million to drill 17 gross or 5.1 net wells and $61.4 million to complete 20 gross or 13.3 net wells during the year.

Comstock Resources revised 2012 capital plan calls for spending approximately $458.0 million for drilling and completion activities, with 77% of the budget spent on oil related projects.

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.