Wednesday, September 16, 2009

Penn Virginia: Update

Penn Virginia's most recent investor presentation had a couple of interesting tid bits. As the map below shows, PVA's Haynesville acreage is all in east Texas. While the Louisiana wells seem to be generating lots of excitement because of high initial production rates, PVA believes in the end that the Texas and Louisiana wells will have the same estimated ultimate recovery (EUR), in the 5-6 Bcf range. The explosive Louisiana IPs notwithstanding, PVA believes the decline curves on the Texas side are more gentle and all will even out over time.

The company also gave some update on well economics. PVA has found better results drilling eight frac stages, which has increased well costs from $8.0 million to $8.5 million. Here is a link to the whole presentation.

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