Oil & gas companies drilling in the Haynesville Shale

Published: May. 30, 2008 at 12:43 AM CDT|Updated: Jun. 17, 2008 at 2:15 PM CDT
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The boundaries of the Haynesville Shale are not exactly known., but it's believed to stretch from Sabine Parish all the way up through DeSoto, parts of Red River, Caddo, Bossier and Webster Parishes.  Surveying and exploration continues, and companies aren't sharing their estimations for proprietary reasons.  But they are snatching up land and mineral leases.

Here is a list of oil & gas companies currently working and drilling in the Haynesville Shale :

*Goodrich Petroleum Corp. (NYSE: GDP) Goodrich announced May 29th the acquisition of additional interests in the Cotton Valley trend, which increases its net exposure in the Haynesville Shale to approximately 30,000 net acres. The Company also announced updated Haynesville drilling activity at Bethany-Longstreet and plans for the Longwood field. They also announced the signing of a definitive purchase and sale agreement with a private party to acquire approximately 3,250 net acres in the Haynesville Shale. The Company has plans to drill two new vertical wells and re-enter another to test the Haynesville Shale at Longwood by the end of the year.

*Chesapeake Energy Corp. (NYSE: CHK) is the third-largest U.S. natural gas producer in the U.S. The Oklahoma City-based company says its Haynesville Shale site in Louisiana "could potentially have a larger impact on the company" than any previous project. Chesapeake already has 300-thousand acres leased in the Haynesville Shale, with a handful of wells already drilled. The company plans to have a total of a half a million acres and 15 rigs up and running by the end of 2008.

Chesapeake and Goodrich Petroleum Corp. announced June 16th plans to enter into a joint venture to develop crude oil and natural gas prospects in northwest Louisiana.  Chesapeake will pay Goodrich about $178 million for working interests in deep strata of the Bethany-Longstreet field. Oklahoma City-based Chesapeake also will pay an undisclosed amount to a third party for rights to the deep strata of the Longstreet field.
The purchases, expected to be completed by July 15, will give Goodrich and Chesapeake each a 50 percent stake in the deep strata of the two fields, located in Caddo and DeSoto parishes.

Petrohawk Energy Corp. (NYSE: HK) has entered into agreements with several private parties to acquire additional leasehold interests in the Haynesville Shale area of North Louisiana. These agreements also include rights to other formations. These additions bring Petrohawk's acreage position in the Haynesville Shale play to over 70,000 net acres, including approximately 30,000 net acres in Elm Grove field, historically the Company's largest producing property with natural gas production from the Hosston and Cotton Valley formations.

Exco Resources Inc.  (NYSE: XCO) Oil and natural-gas producer Exco Resources Inc.'s board approved a $123 million increase in its 2008 capital budget, to $923 million. The increase includes $90 million for the more drilling in the company's Haynesville Shale position in Louisiana, $30 million for additional drilling in its Vernon Field in Louisiana, $2 million for additional Cotton Valley drilling in Texas and $1 million for information-technology initiatives, Exco said. (AP)

XTO Energy, Inc. (NYSE: XTO), announced late last year it would pour most of it's capital budget into emerging gas plays in East Texas and Louisiana, including the Haynesville shale. Their primary producing horizons in the Eastern region include the Pettit, Rodessa, Travis Peak (Hosston in La.), Cotton Valley Sand, Bossier (Gray Sand in La.), Cotton Valley Lime and the Haynesville, ranging in depth from 5,000 to 13,000 feet.

Cubic Energy, Inc. (OTCBB:QBIK) is based in Dallas and described as a "junior explorer" that recently reported positive results from three deep wells it drilled in the play.  The company announced May 12th plans to drill two new wells to the Haynesville Shale in the Company's northwest Louisiana acreage.  The company is evaluating and planning for some horizontal drilling in the Haynesville Shale for possibly later this summer.

GMX Resources Inc. (GMXR) The Company expects to add a sixth leased rig in early 2009 which will focus exclusively on horizontal development of the Haynesville/Bossier gas shale in the Company's operated acreage. In 2006, GMXR and its joint development partner Penn Virginia Oil and Gas, L.P ("PVOG") had drilled and completed 19 vertical test wells across its acreage completing the Haynesville/Bossier Shale in most of the wells.

June 17, 2008 GMXR announced the execution of two definitive agreements with a private company to purchase 9,865 gross / 7231 net operated developed and undeveloped acres mostly in Harrison County, East Texas and Caddo Parish North Louisiana, which includes an average of 85% working interest in 11 units, producing 1,900 mcfepd. This acquisition increases the Company's net operated acreage to 74%. The mineral leases contain multiple producing layers and 90% of the acreage includes deep rights in the 'Haynesville'/Bossier Shale bringing the total approximate net 'Haynesville'/Bossier Shale acreage to 27,500. "These acquisitions represent a significant growth opportunity for GMXR, especially as we prepare our accelerated drilling plans for the 'Haynesville'/Bossier Shale," stated Ken Kenworthy, Jr., CEO and President. "The acreage represents excellent bolt-on operated opportunities adjoining our core development," he continued. The Company expects to begin horizontal drilling with multiple rigs in the 'Haynesville'/Bossier Shale within the next six months. Closing of the transaction will occur in the next few weeks.

EnCana Corp (NYSE: ECA) Announced restructuring plan May 11th, 2008 to create two senior energy companies focused on unconventional resources: An integrated oil company (IntegratedOilCo) (IOCo), and a pure-play natural gas company, GasCo. Both companies will be headquartered out of Calgary, Alberta, Canada.  The company reports some promising exploration results in a number of North American shale plays, such as Horn River in British Columbia and the Haynesville shale in Louisiana.

June 16, 2008: Encana announces the Company has established a leading land and resource position in two of North America's most exciting new natural gas resource plays, the Horn River Shale in northeast British Columbia and the Haynesville Shale in Louisiana and Texas. EnCana has drilled a series of exploration wells that has shown strong potential to deliver commercial volumes of natural gas.

"Recent exploration wells drilled by EnCana, its partners and industry, indicate these two resource plays hold the potential to eventually become amongst the largest in North America. Each of these plays has been compared in size and scope to the prolific Barnett Shale in north central Texas, which currently produces more than 3 billion cubic feet per day and continues to grow. EnCana has assembled large land positions in each of these emerging plays - 220,000 net acres in the heart of the Horn River Shale play and 325,000 net acres in the Haynesville Shale play fairway. These are very meaningful positions, each with the potential to ultimately achieve production levels approaching 1 billion cubic feet per day net to EnCana, which is comparable in size to the potential we have announced in our more-established plays at Montney in northeast B.C. and Deep Bossier in East Texas," said Randy Eresman, EnCana's President & Chief Executive Officer.

In the emerging Haynesville Shale, EnCana Oil & Gas (USA) Inc. acquired its first leases in 2005, drilled its first three vertical wells in 2006, and has been continually acquiring land. In 2007 EnCana Oil & Gas signed a 50/50 joint exploration agreement with Shell Exploration & Production, a division of Royal Dutch Shell. To date the companies have drilled three vertical and two horizontal wells and are currently operating two rigs in the area. EnCana plans to operate five rigs by year-end and it is in an industry-leading position in the play.

"EnCana is a leader in finding and developing natural gas resource plays, evidenced by the fact that we have captured large positions in substantially all of the major unconventional gas plays in North America. The potential of the Haynesville Shale play was established in February with the completion of our first horizontal well. The gas well flowed at an initial production rate of more than 8 MMcf/d, which would rank it amongst the most productive Barnett Shale wells. The Haynesville Shale is on the verge of transforming from an emerging play to one of significant commercial development, rivaling the quality and scope of the Barnett Shale play," said Jeff Wojahn, Executive Vice-President and President, USA Division.

Cabot Oil & Gas Cabot Oil & Gas Corporation (NYSE: COG) Cabot is expanding its Haynesville/Bossier Shale exploitation effort on its acreage positions in East Texas. The company has drilled 15 Haynesville tests in this area over the last 12 months with better than expected results. Cabot plans to drill eight additional Haynesville penetrations this year, with one of those being a horizontal test to evaluate the economic merits of horizontal vs. vertical.

Penn Virginia Corp., Radnor, Pa., expects its first horizontal well to exclusively target the Haynesville (Lower Bossier) shale to deliver 10-15 MMcfd in July after more pipeline capacity is added. Producing to sales at 5 MMcfd, the Fogle 5-H well in Harrison County has already flowed at rates as high as 8 MMcfd with 5,000 psi flowing casing pressure.

Penn Virginia, with 100% interest in Fogle 5-H, has drilled and completed 17 vertical wells on its 53,000-acre East Texas leasehold and tested four different reservoirs below the Jurassic Cotton Valley including the Upper Bossier shale and Lower Bossier shale. It expects to drill at least five more horizontal Bossier shale wells this year.