Southwestern to slash Fayetteville drilling, not flow

Southwestern Energy Co., Houston, will invest $1.1 billion in the Fayetteville shale play in Arkansas in 2012, down from $1.3 billion in 2011.

The company spent $925 million to drill and complete 460-470 gross horizontal wells, including 425-435 operated wells in 2012. In 2011 it spudded 650 wells, 580 of them operated.

Operated gross production climbed to 1.947 bcfd at the end of 2011 from 1.635 bcfd at the beginning of the year. Net production was 436.8 bcf in 2011, up 25% from 2010, but the company said earlier that 475 to 480 bcf of its targeted 2012 gas production is to come from the Fayetteville.

The company’s yearend 2011 Fayetteville shale net reserves were 5.1 tcf, up 1.2 tcf on the year, from 2,735 proved developed producing, 59 proved developed nonproducing, and 1,582 proved undeveloped locations. The average gross proved reserves for the undeveloped wells included in the 2011 and 2010 yearend reserves were 2.4 bcf/well.

Initial production rates at the operated wells the company placed on production in 2011 averaged 3.33 MMcfd compared with 3.364 MMcfd in 2010, the slight decline due mainly to increased well density and locational differences in the mix of wells, Southwestern said.

Southwestern placed 560 total wells on production in 2011. It placed 51 operated wells on production with initial production rates that exceeded 5 MMcfd, including 6 wells that exceeded 6 MMcfd.

Southwestern held leases on 925,842 net acres in the Fayetteville shale area at the end of 2011, up from 915,884 net acres at the end of 2010.