Report From a Strategic Planning Group

A friend of a friend of a friend sent this report from a major producer to me. The following is an excerpt that refers to Haynesville that I thought I would share.

As per UBS Analysts - PetroHawk reiterated its intent to operate 12 rigs in the Haynesville in 2009 and sufficiently retain its leases. Well costs have crept to $8.5- $9.5m/well from $8m due to greater frac stages and longer laterals (up to 4,500' from 4,000'), but cost savings could arise from fewer wells per section and the use of spudder rigs to pre-drill. The play is said to exceed IRRs of any shale play in North America and HK (PetroHawk) will benefit from being 70% hedged on estimated 2009 production at $8 floors. 25-30% production growth still seen for 2009 With 60% of their $1 billion 2009 capex plan (vs. our $660m 2009 cash flow forecast) targeting the Haynesville, HK confirms it will generate solid returns in most commodity environments and bring on production growth through 75 wells in the Haynesville in 2009, 8 of which are currently producing 86 MMcfed gross while the average IP rate has been 19.4 MMcfe/d with 80% first year decline rates. Exploration still happening in the EagleFord shale HK has 1 rig dedicated to the Eagle Ford shale in 2009 where they claim to have 3.7 Tcfe of resource potential on their 150,000 net acres. Developmental well costs have come down from $5-$7m to $5-$6m in the area, which could be further helped by service pricing degradation.

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Permalink Reply by sesport on January 20, 2009 at 15:32
Thanks, John. One thing catches my eye and piques my curiousity ... the use of spudder rigs to pre-drill. Would this be the vertical part that is later sidetracked? If so, what size pipe/casing is required to later go back and sidetrack? (Sorry if my terminology isn't quite right, but there has been debate whether some verticals here are being used to HBP until lateral can be drilled.) Appreciate any answers to this. :0)
Permalink Reply by Les Bamburg on January 20, 2009 at 16:11
Sesport, Petrohawk has been using "spudder" rigs for the vertical sections of many (if not most) of their horizontal HS wells. This is not really a "sidetrack" but rather using two different drilling rigs for the vertical and horizontal sections. This is being done because a lower horsepower standard rig is capable of drilling the ~ 11,000' vertical section. A larger horsepower "top-drive" rig is required to drill the horizontal lateral section. Casing sizes would be the same as a well drilled by a single drilling rig.
Permalink Reply by sesport on January 20, 2009 at 16:24
Thanks again, Les. I looked at a lot of information about this (re-working, sidetracking, etc.) and saw that using a predrilled vertical (even saw info about using old verticals in Wyoming, I think) is possible. Just couldn't find more info as it applies to ng, most of it was for deep water and for oil. Then again, I may have this all turned around, too. Seems to me Schlumberger has been working at this, but keeps the findings close to the vest. You're help is greatly appreciated.
Permalink Reply by Les Bamburg on January 20, 2009 at 17:12
Sesport, for an example of two rigs check the following well:

Trinidad #122 Rig, Petrohawk, Sample 5 #1 Well, Serial #238488, S5-T14N-R11W
Permalink Reply by sesport on January 20, 2009 at 17:56
Les - will do that. Here's one of the pieces of Schlumberger info I looked at. I just reviewed it and remember it applies to oil. You may have already seen this.

http://www.slb.com/media/services/resources/oilfieldreview/ors96/au...
Permalink Reply by Snake Stewart on January 20, 2009 at 16:28
Hey S.S.P.,
I know we have talked about casing size before but I cant remember for sure who answered that question. Check Dions replies, I believe it was him but I cant remember for sure. I want to say 7.5" at base of vertical to allow for mudmotor on the lateral.
Permalink Reply by sesport on January 20, 2009 at 16:32
Thanks, Mr. Stewart. That's what originally sent me on that fising trip, looking for info about the 7.5" at base and mudmotor info.
Permalink Reply by Les Bamburg on January 20, 2009 at 17:14
SS, typically 7" casing for the vertical is sufficient to handle the top-drive unit.
Permalink Reply by Bobi Carr ("parker") on January 20, 2009 at 17:21
Les,

Do they sometimes use 9"?

I thought I recalled reading 9 somewhere. (maybe a well report on SONRIS).
Permalink Reply by Cathaus on January 21, 2009 at 15:39
Way I hear, bigger IS better.
Permalink Reply by Dorcheated A1 on January 21, 2009 at 15:43
It's not the size of the pencil, it's how you write with it.
Permalink Reply by sesport on January 21, 2009 at 15:50
Sir, is this your golf pencil?

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