Arkansas Fayetteville shale gas flow rising

By OGJ editors
HOUSTON, Oct. 24 -- Gross production from Southwestern Energy Co.'s wells in the eastern Arkoma basin Fayetteville shale play has grown to 70 MMcfd and looks to attain 100 MMcfd by the end of 2006, the company said.

The Houston operator is obtaining better frac results and adding capital spending, rigs, and completion crews in the play, which it extended 6 miles northeast in the third quarter and 20 miles to the east into White County in the second quarter.

The company expects to have effectively tested a substantial portion of its Fayetteville shale acreage by the end of 2006, and it is drilling and completing its first wells in the deeper Moorefield and Chattanooga shales. Southwestern holds 887,000 net acres, including 125,000 net acres held by conventional production.

Its 2006 operations have involved eight counties centered on Cleburne, Conway, Faulkner, Van Buren, and White counties.

Southwestern's Fayetteville production totaled 3.8 bcf in the third quarter, up from 1.8 bcf in the second quarter.

Fayetteville operations
Southwestern boosted capital outlays 11% to $925 million, with the increase of almost $95 million totally attributable to the Fayetteville shale play.

The company attributed the increase to the frac changes, higher service costs, more wells operated by others, and the previously reported purchases of customized land rigs.

The yearend rig count is expected to be 19, up from 14 at present and 10 on July 31.

Through Oct. 19 Southwestern had drilled and completed 128 Fayetteville wells, of which 76 are designated horizontal (71 producing), in 25 pilot areas. It was drilling or completing 97 other wells, including 46 drilled through the vertical section with two smaller rigs.

The company had 27 wells awaiting completion and planned to add three completion crews to the two already working by Mar. 31.

Moving away from nitrogen foam frac jobs since earlier this year, the company had performed 49 slickwater or crosslinked gel frac jobs through Oct. 19 on horizontal wells then on production. The 49 wells averaged initial flow rates of 1.7 MMcfd.

Forty-two wells that had been on production 30 days averaged 1.5 MMcfd, and 23 wells averaged 1.4 MMcfd after 90 days. The recently completed slickwater frac wells cost $2.2 million/well to drill, frac, and complete.

The company's average horizontal well goes to 3,700 ft true vertical depth, and the lateral takes 10-15 days to drill and averages 2,350 ft.
Hefley 1-12-H, the 20-mile east extension well in White County, went on line in late August at 1.6 MMcfd. Six miles to its northwest, Johnson 1-16-H cut 486 ft of gross Fayetteville pay and is returning frac fluid. The 6-mile northeast extension, Nicholson 1-16-H in the Hammerhead pilot area, cut 562 ft of gross Fayetteville pay.

Two deeper shales
Southwestern is completing its first horizontal well in the Moorefield shale, in which it holds 130,000 net undeveloped acres that could be prospective.

The Arkansas Oil & Gas Commission approved statewide field rules in the third quarter designating Fayetteville, Moorefield, and Chattanooga shales as unconventional sources of supply. Each drilling unit consists of 640 acres, and as many as 16 wells are permitted per unit for each formation.

Southwestern expects drainage from its horizontal wells to be less than 80 acres/well based on existing microseismic data and reservoir simulation modeling.

Carter 2-35-H, the company's first horizontal Moorefield well, found 221 ft of gross Fayetteville shale pay and an estimated 85 ft of gross Moorefield shale pay based on the offsetting vertical well.

The company in February 2006 said it had tested gas from two vertical Moorefield and Chattanooga wells. It is evaluating possible future Chattanooga horizontal development.

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