Southwestern Energy announces Fayetteville shale play in Arkoma basin

By Alan Petzet
Exploration Editor
HOUSTON, Aug. 18 -- Southwestern Energy Co., Houston, said it has accumulated a large acreage position in and east of the Arkoma basin fairway in Arkansas to pursue dry gas in Mississippian Fayetteville shale.

Southwestern has completed four vertical wells in various thicknesses in the shale, found at 1,500-6,500 ft, and obtained flows of 150-500 Mcfd after 10-20 days of tests. The shale is believed to be 50-325 ft thick.

The company is not comfortable with early estimates of gas in place, recoverable volumes, or appropriate well spacing. It is not sure how the formation will respond to fluids. It said it will probably try horizontal drilling this year but could not estimate horizontal well costs or appropriate horizontal lengths.

Fayetteville is the geological equivalent of the Caney shale found in the Oklahoma Arkoma basin and the Barnett shale in the Fort Worth basin of North Texas. Fayetteville gas content is 60-220 scf/ton compared with 100-200 scf/ton for the Barnett, Southwestern said.

The Fayetteville gas is close to 1,000 Btu/Mcf and contains no troublesome impurities or liquids. The shale has not been thought of as a traditional producing zone in the Arkoma.

Southwestern has hiked its acreage position to 455,000 undeveloped acres as of early August from 343,000 acres at yearend 2003. Beyond that, the company controls 120,000 net developed acres that are held by conventional production in the traditional Arkoma fairway. Average primary term of the undeveloped acreage exceeds nine years.

The company has been studying the Fayetteville and the shallow Wedington sandstone member of Fayetteville since 2001 in an attempt to learn why gas recoveries varied so widely from the Wedington, which has only been commercial in a localized area along the northern rim of the fairway. It concluded that some gas attributed to the Wedington actually came from the surrounding Fayetteville shale (see map, OGJ, June 5, 1989, p. 66).

Fayetteville core samples obtained in 2002 "indicated encouraging data relative to total organic content, thermal maturity, and total gas content which Southwestern believes compare favorably to other productive shale gas plays, including the Barnett shale," the company said.

These analyses and extensive geologic mapping led to the leasing effort that began in early 2003.

Southwestern recently completed four vertical wells to the Fayetteville in Franklin, Conway, and Van Buren counties, Arkansas. All four confirmed the predicted lateral extent of the formation and responded to nitrogen fracs. Gas sales will start shortly.

The company has acquired $18.5 million in leasehold. Its 2004 capital outlay in the play is $20 million, including $8.5 million for 20 total wells. One or two could be horizontal wells.

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