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.
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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Replies to This Discussion
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Permalink Reply by intrepid on -
I've seen some very interesting things mentioning Eagle Ford. It may overshadow HS with the companies?
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.
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Permalink Reply by Les Bamburg on -
Intrepid, the Eagle Ford Shale has a much lower overall potential than the Haynesville Shale for the total play. In addition, the net natural gas price for the Eagle Ford Shale will be lower due to its location in South Texas.
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Permalink Reply by Bobi Carr ("parker") on
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Whew!
No offense to Eagle Ford but I hope it is a while before our status as the new "it" shale is taken.
Never works for me.
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