By OGJ editors
HOUSTON, Aug. 3 – The western Oklahoma Colony and Texas Panhandle Granite Wash oil and gas-condensate plays are delivering exceptional rates of return even in the current low commodity price environment, said Chesapeake Energy Corp.
The Colony play, in Custer and Washita counties, Okla., and the Texas Panhandle play in Hemphill and Wheeler counties, Tex., are Chesapeake’s highest rate of return play due to high oil and natural gas liquids content. Pretax rates of return are 135-140% based on $7/Mcf gas and $70/bbl oil from a 4.75-5.7 bcfe horizontal well drilled and completed for $5.5-6.25 million.
Chesapeake holds 60,000 net acres in Colony and 40,000 net acres in Texas Panhandle. It is the largest leaseholder, most active driller, and largest producer in Colony.
In Colony, Chesapeake averages 90 MMcfe/d net or 165 MMcfe/d gross operated and plans to raise that to 105 MMcfe.d net or 190 MMcfe/d gross operated by the end of 2009 and 140 MMcfe/d net or 250 MMcfe/d gross operated by the end of 2010.
The company plans to average four rigs in the second half of 2009 to drill 10 net wells and seven rigs in 2010 for 40 net wells. Three recent completions in Washita County averaged initial 30-day rates of 17.1 MMcfe/d including 1,300 b/d of oil, 16 MMcfe/d including 900 b/d of oil, and 15.4 MMcfe/d including 1,100 b/d of oil.
In the Texas Panhandle play, Chesapeake produces 70 MMcfe/d net or 95 MMcfe/d gross operated and plans to reach 75 MMcfe/d or 100 MMcfe/d gross operated by the end of 2009 and 80 MMcfe/d net or 110 MMcfe/d gross operated by the end of 2010.
The company will average two rigs in the second half of 2009 and in 2010 to drill 10 and 20 net wells, respectively.