Tuesday, April 21, 2009

Petrohawk: Update #1

Today, Petrohawk Energy announced its progress in the Haynesville Shale. Rather than summarizing it, I've excerpted large portions of the company's release below because there's lots of detail about drilling and completion techniques as well as pipeline agreements that might get lost in a summary. Unfortunately today's announcement did not reveal production numbers by well, but that should be available soon.

"Petrohawk utilized eight horizontal rigs on average in the Haynesville Shale during the first quarter, not including spudder rigs. A total of 15 operated and 16 non-operated wells were drilled. Of the operated wells, 11 were on production at the end of the quarter. Additionally, five operated wells drilled in late 2008 were put on production, bringing the total number of Haynesville Shale wells completed by the end of first quarter to 28. The average initial production rate for operated wells completed during the quarter ranged from 3.3 Mmcfe/d to 24.8 Mmcfe/d, averaging 17.1 Mmcfe/d. The average initial production rate for all operated Haynesville Shale completions to date, excluding two previously reported wells that were mechanically compromised, is approximately 18.0 Mmcfe/d.

"Spud to spud times are currently averaging 60 days, with total spud to first production times averaging 80 days. Drilling efficiencies are being gained by increasing the size of the intermediate casing used, from 7 to 7 5/8 inch. This has allowed for a larger hole size while drilling the lateral, which in turn has resulted in significantly higher rates of penetration. The Company has also undertaken more progressive angle-building in the curve, and thicker geosteering targets, which have also contributed to decreased drilling days. Drilling and completion costs are currently ranging between $9.0 million and $10.5 million per well, based on average lateral lengths of 4,300 feet with 12 to 14 fracture stimulation stages per well. The Company is targeting development well costs between $8.5 and $9.5 million per well.

"Petrohawk continues to employ the same basic completion procedures utilized in 2008, with some refinements. Lateral lengths are targeted at between 4,300 and 4,600 feet, with frac stages spaced approximately 325 feet apart. Each stage is comprised of four perforation clusters, two feet in length, and spaced approximately 80 to 85 feet apart. The Company utilizes a slickwater technique as well as either ceramic and resin-coated proppant, preceded by 100 mesh sand. The longest lateral length drilled to date has been approximately 4,700 feet with 14 stages of fracture stimulation. Even though these procedures have delivered outstanding well performance, Petrohawk continues to evaluate these procedures and plans to test variations on these methods to maximize well economics.

"Recently drilled wells have tested several new development areas away from Elm Grove Field. The Company will conduct its 2009 program on locations in excess of 40 miles apart in both north-south and east-west directions, including portions of Caddo, Bossier, Red River and DeSoto parishes. East Texas development will primarily be directed through a joint venture partnership with EOG Resources, which expects to increase the drilling activity in the joint venture area during the year.

"In addition to its existing infrastructure from operations in Elm Grove Field of northwest Louisiana, Petrohawk has completed construction on more than 50 miles of 16 inch gathering lines as well as approximately 330 Mmcf/d of treating capacity to service new production from the Haynesville Shale. The Company expects to construct an additional 112 miles of gathering pipeline and an additional 420 Mmcf/d of Company-owned treating capacity by the end of 2009.

"Additionally, Petrohawk has finalized an agreement with Regency Energy Partners to secure space on Regency's Haynesville Expansion Project to transport 400 Mmcf/d from the area. The Haynesville Expansion Project is expected to be completed by year-end 2009. Not including the incremental transportation space added by the Regency Energy Partners project, Petrohawk's total takeaway capacity builds to 850 Mmcfe/d during 2009, with additional takeaway capacity available on a non-contracted basis. Additionally, the Company has acquired firm transportation on other pipelines that it expects will provide sufficient take-away capacity for future Haynesville Shale production."

No comments: