Southwestern Energy Co., Houston, plans to increase the outlay for its emerging low permeability Mississippian Fayetteville shale play in the Arkoma basin as part of a 24% increase in its 2005 capital budget to $352.7 million.
The program is heavily weighted towards lower risk development in Overton field, East Texas ($147.6 million), and conventional drilling in the Arkoma basin ($59.3 million).
The company earmarked $100 million for the unconventional Fayetteville shale play and will accelerate the program as it finds encouragement in the drilling results. The program includes 160-170 wells in 2005.
Of 16 Fayetteville wells drilled in five pilot areas in Franklin, Conway, Van Buren, and Faulkner counties, gas was being sold from six in mid-December 2004 at 110-250 MMcfd with the longest production history being 105 days. Four other wells that flowed 185-370 Mcfd, including one that flowed 1.3 MMcfd, await connection. Two others await completion.
The 2004 Fayetteville outlay is $28.2 million for 23 wells and acreage acquisition.
The company targets 2.5-3.0 bcf of gas production in the play in 2005 assuming positive operating results and full use of the allocated capital.
