Houston-based Southwestern Energy Production Co. is drilling a four-state portfolio after forming its own drilling company and building a new fleet of rigs.
Southwestern is an integrated energy company primarily focused on exploration and production of natural gas in the US. It’s engaged in natural gas and crude oil exploration and production in the Arkoma basin, East Texas, Permian basin, and the onshore Gulf Coast. The company also has natural gas distribution activities in northern Arkansas and midstream activities.
DeSoto Drilling
In 2005, Southwestern Energy formed DeSoto Drilling Inc., located primarily in Conway, Ark., to conduct some of its drilling operations in the area. By late 2006, the new company took possession of 15 new, purpose-built land rigs, said Alan Stubblefield, senior vice-president at Southwestern, who oversees DeSoto Drilling. The fleet drills exclusively for Southwestern, Stubblefield told OGJ (Fig. 1).
DeSoto Drilling operates two NOV IDEAL 1500 rigs working in East Texas and 13 rigs working in the Fayetteville shale:
- Ten, Cowan MD-500 super singles.
- One NOV Rapid Rig (automated single).
- Two Atlas Copco RD 20 truck-mounted rigs.
East Texas
In 2007, Southwestern had reserves of 353 bcf equivalent (24% of total proved reserves) and production of 29.9 bcfe (26% of total production).
The company currently focuses its drilling on the James lime reservoir in the Angelina River trend area. As of Mar. 31, 2008, it was operating four producing wells that had gross initial production rates of 5.0 to 14.4 MMcfd.
Southwestern’s net production from the James lime is about 12 MMcfd as of Mar. 31, including production from five outside-operated wells.
The company plans a multiyear development drilling program in East Texas that it categorizes as “low-risk.” In 2008, it plans to invest about $152 million in East Texas, where it expects to drill about 55 wells, including 21 net wells in the Angelina River trend area.
Pennsylvania
In 2008, Southwestern expects to invest $26 million in various exploration and new ventures projects, including drilling as many as three vertical wells targeting the Marcellus shale in Pennsylvania.
The Marcellus shale lies in western Pennsylvania and West Virginia. Other operators in the play include Rex Energy, Denver-based Energy Corp. of America, and XTO (OGJ Online, Apr. 29, 2008, May 2, 2008).
Arkoma basin
Southwestern Energy has a large land position in the Arkoma basin with 491,791 net acres. Its conventional operations in the Arkoma basin provide low-risk drilling opportunities and a stable production and reserve base. The company’s strategy is to continue development drilling and workover programs to expand its production and reserve base.
In 2007, Southwestern had reserves of 304 bcf of gas (21% of total proved reserves) and produced 23.8 bcf of gas (21% of total production).
Southwestern plans to invest about $132 million to drill 100-110 wells in 2008, including 40 wells in the Ranger anticline area and 45 wells at the Midway area in Arkansas.
Fayetteville shale
Southwestern Energy is the most active operator in the Arkansas Fayetteville shale and it plans to invest about $1.2 billion in the play in Arkansas in 2008 (OGJ, Jan. 21, 2008, p. 35).
As of May 8, Southwestern held about 850,000 net acres in the Fayetteville shale area, including 125,400 net acres held by conventional production in the traditional Fairway portion of the Arkoma basin.
Through Mar. 31, Southwestern has drilled and completed 533 operated wells in the play, of which 470 are horizontal. Of those horizontal wells, 426 wells were stimulated with hydraulic fracturing with slickwater and some crosslinked gel stimulation treatments.
Southwestern said that microseismic data from multistage hydraulic fracs in the Fayetteville shale can “help demonstrate the productivity along the length of a horizontal lateral as long as the data show a consistent pattern that the stimulations treated the entire lateral length” (OGJ, Apr. 14, 2008, p. 19).
Fayetteville wells
Southwestern has drilled and completed 142 wells with lateral lengths of more than 3,000 ft through Mar. 31, 2008.
During this first quarter, Southwestern’s typical horizontal well had an average completed well cost of $2.9 million/well, an average horizontal lateral length of 3,285 ft, and average time to drill to total depth of 15 days from reentry to reentry.1
As the company continues to drill wells with longer laterals in some of its pilot areas, the number of drilling days and well costs may increase, Southwestern says.
Southwestern forecasts that the average gross ultimate recovery from wells with horizontal laterals greater than 3,000 ft will range from 2.0 to 2.5 bcf/well with an average completed well cost of about $3.0 million/well.
Fayetteville drilling
Among the DeSoto fleet, 13 of 15 rigs are engaged in the Fayetteville shale project (Fig. 2). In a recent, four-part series on unconventional gas, Southwestern’s customized fleet was noted as one of several examples of operators pursuing efficiencies in unconventional gas development in the US (OGJ, Oct. 1, 2007, p. 46).
The Arkansas fleet includes two truck-mounted, highly mobile Atlas Copco RD20 rigs (Fig. 3). Roger West, rig manager for Rig 31 with about 20 years’ experience in the oil patch, said, “Our operation is typical of what DeSoto is doing in Arkansas. We use the Atlas Copco RD20 to start the hole, and we’ll bring in a larger rig to drill deeper and horizontally.”
West said he can run the RD20 with a three-man crew; the work isn’t physically demanding because all the systems are hydraulic“the hoists and winches do the work for you.” The RD20 can pull 120,000 lb.
With an experienced crew, West has the RD20 drilling within 2 hr of arrival at a new location. They drill for 3½ days and then spend 4-6 hr to cap the well and tear down the rig. Then they move on to one of more than 100 site pads in the area waiting for a DeSoto rig.
“Drilling can get tough” in the sands, he said, especially when they hit a “ratty” formation.
Fayetteville production
In 2007, Southwestern’s Fayetteville reserves were 716 bcf of natural gas (49% of total proved reserves) and produced 53.5 bcf of gas (47% of total production) the same year.
As of mid-April 2008, the company’s gross operated production rate from the Fayetteville shale play was about 400 MMcfd, including about 11 MMcfd from 12 wells producing from conventional reservoirs. This is a fourfold increase from gross production of about 100 MMcfd at yearend 2006.
Under an assumption that half the acreage is developed at 80-acre spacing and produces 1.4 bcf/well, the play has a potential for 11 tcf of gross ultimate gas recovery, according to Southwestern (OGJ, Nov. 19, 2007, p. 47).
Reference
- www.swn.com/operations/fayetteville.shale.asp; May 5, 2008.
