Wednesday, November 2, 2011

Forest Oil: Welcome Back!

Forest Oil reentered the Haynesville Shale program in August 2011 with a single rig drilling program.  The company made the decision to come back after months of pleasing results from its 2010 wells, which were produced on a restricted rate.  From the press release:
The seven wells drilled in 2010 have produced at an average rate of 8 MMcfe/d during their first 240 days of production and, at the end of the 240 days, had an average flowing pressure of approximately 4,300 psi. Forest now believes that the estimated ultimate recovery from these wells should exceed the 6.5 Bcfe type curve.
The company also noted that it expects cost reductions and efficiencies to further enhance Haynesville returns.

While one new rig is not big news in and of itself, it is a positive indicator that the Haynesville Play has a bright future.  The only knock on the play is that it produces only dry gas and the commodity price for gas is terrible without much on the near-term horizon to suggest otherwise.  A big knock, yes, but the Haynesville's fundamentals are strong.

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