Haynesville Shale

QEP Resources Reports Eleven Haynesville Shale Completions

QEP Resources (QEP) issued an operational update on the company’s acreage in the Haynesville Shale. The company reported the results of eleven wells completed in the Haynesville Shale from May 2010 through July 2010. The well names and peak production rates are as follows:

M. Sanders 9-15-9 H - 10.5 million cubic feet per day (MMCFD)

Conly SR 27H - 14.2 MMCFD

Conly SR 34H -5.1 MMCFD – restricted production due to mechanical problem.

Caplis 30-16-12 H - 10.9 MMCFD

Caplis 4H - 11.5 MMCFD

Nettles 13-15-10 H - 11.9 MMCFD

J. Caplis 5-15-12 H - 11.2 MMCFD

Bienville S&G 11 H - 11.3 MMCFD

Sustainable Forest 23 H - 12.4 MMCFD

Bienville S&G 35-15-9 H -10.5 MMCFD

Bienville S&G 26-15-9 H - 10.0 MMCFD

QEP Resources is operating seven rigs in the play and has production of 178 MMCFD from the Haynesville Shale as of 6/30/2010. The company has a total of 31 wells either being drilled or waiting on completion:

Operated - Eleven wells waiting on completion, and seven being drilled. Non-Operated - Eleven wells waiting on completion, and two being drilled.

Goodrich Petroleum Reports Haynesville Shale Completion

Goodrich Petroleum Corporation (GDP) reported the completion of a Haynesville Shale well. The Billy Harris No. 1H was completed with a 24 hour peak production rate of 12.2 million cubic feet per day of natural gas. The horizontal well was drilled with a 5,000-foot lateral and 20 fracturing stages.

Goodrich Petroleum Corporation has a 100% working interest in this Haynesville Shale well. The company has 85,000 acres under net lease that are prospective for the Haynesville Shale.

The Beckville Field is located in Panola and Rusk Counties in Texas. The company has 97 Bcfe of proved reserves here as of the end of 2008, all of which is located in the Cotton Valley formation. Goodrich Petroleum Corporation believes that it has 147 net well locations in the Haynesville Shale in the Beckville Field.

Chesapeake Energy - Haynesville Shale Decline Curve

Chesapeake Energy Corporation (CHK) reported its second quarter earnings and also issued an operations update on its exploration and development activity in the Haynesville Shale.

Chesapeake Energy Corporation has been developing the Haynesville Shale for several years, and has enough confidence in the results to date that it has published a updated decline curve based on the aggregate drilling results from 56 its operated horizontal wells drilled from the beginning of 2008.

Chesapeake Energy Corporation now believes that its first year decline rate is slightly higher than before at 85%, compared to 81% in the previous release. The company increased its initial production rate for each well during the first 24 hours from 10 mmcfe to 14.1 mmcfe. The Estimated Ultimate Recovery (EUR) for each well remains the same at 6.5 Bcfe.

Since the natural gas is produced quicker from the well, the rate of return that Chesapeake Energy Corporation realizes is higher, assuming that all other inputs are the same.

The company said that its can achieve a rate of return of 42%, excluding any benefit from its partnership deal in the Haynesville Shale with Plains Exploration & Production Company (PXP) The inputs the company uses are:

Flat NYMEX natural gas prices of $7.00 per mcf
Well cost of $7.5 million
EUR of 6.5 Bcfe
85% first year decline rate
Initial 24 production rate of 14.1 mmcfe ___________________________________________________________________

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