Haynesville Shale

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.

SM Energy Sets 2011 Haynesville Shale Capital Budget

SM Energy (SM) has established a drilling capital budget of $830 million to develop oil and gas properties in 2011, with $35 million, or 4% devoted to the company’s properties in the Haynesville Shale.  The company has 22,000 net acres in the Shelby Trough area of Texas.

SM Energy will use this capital for five gross operated horizontal wells in 2011, and another 20 gross horizontal wells operated by its partner in the Haynesville Shale. This will not be enough to hold its acreage in the play as twelve additional gross wells would have to be drilled in 2011 and eight gross wells in 2012 to convert the company’s Haynesville Shale acreage from term to held by production.

Petrohawk Energy Updates Haynesville Shale Operations

Petrohawk Energy (HK) issued an operational update on its activities in the Haynesville Shale. The company participated in 94 wells in the Haynesville Shale during the second quarter of 2010, of which 28 were operated. All the operated wells were completed under restricted production practices.

Petrohawk Energy reported that average daily production from the Haynesville Shale during the second quarter of 2010 was 386 million cubic feet equivalent per day.

Petrohawk Energy is currently drilling the company’s first well in the Haynesville Shale using a modified wellbore design that requires less pressure to conduct hydraulic fracturing operations on the well. The company estimates that if the design is successful, it would reduce well costs by $1 million. This is important because Petrohawk Energy reported a 30% increase in well completion costs since the beginning of 2010.

Petrohawk Energy reduced its rig count in the Haynesville Shale during the second quarter of 2010, and is operating 14 rigs on the play. The company is focused on converting its acreage here from term to held by production.