Friday, April 24, 2009

Forest Oil: Update

Forest Oil has approximately 140,000 gross acres in the Hanyesville Shale area, but it's not entirely clear that all of these leases have deep rights. Let's assume that most do. In its acreage, Forest is targeting the Haynesville Shale as well as other shallower formations like the Cotton Valley and Taylor Sands, along with deeper formations like the Haynesville Lime, which is below the shale.

The company has completed 14 Haynesville tests and has completed its first horizontal well, the Mosley 14-1H (14 Mmcfe/day initial production). Forest has one additional horizontal well completing and another two drilling. It's 2009 drilling program includes between 10 and 12 Haynesville wells. The company believes that it can drill wells for approximately $7.3 million, which is somewhat lower than the estimates of competitors.

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