Fayetteville Shale Play Formation - Natural Gas Field - Arkansas Shale
Fayetteville Shale Shale Deposit Extends through
these Arkansas Counties: Franklin, Johnson, Pope, Yell, Conway, Van Buren, Faulkner,
and Cleburne, Crawford, Sebistian, Logan, Cleburne, White, Jackson, Woodruff, Prairie, Monroe, Lee, Phillips, St. Francis,
Lonoke.
What is the Fayetteville Shale Area Natural Gas Field?
The Arkansas Fayetteville Shale Natural Gas Field is located on
the Arkansas side of the Arkoma Basin. The Fayetteville Shale Play Deposit is about 60 - 575 feet thick and
the depth ranges from 1450 -6700 feet deep. This unconventional gas reservoir can be compared to the Haynesville Shale and the Barnett Shale. Ranging at about 4,000 square miles, the Fayetteville Shale Formation is being highly sought
out by many companies that are listed below as they go on a gigantic land grab of mineral rights. Landowners in the Fayetteville Shale are getting paid handsomely. Many of these companies believe, while
the Fayetteville Gas Shale is still young, that this Arkansas shale formation holds a promising amount of Natural
Gas. A University of Arkansas Study showed that this shale play could generate north of 17 billion dollars and
gain around 11,000 jobs going well into 2012. This would be great for the state of Arkansas!
All of this has been made possible due to the recent development of New Drilling Techniques and Technology known
in the gas and oil industry as Horizontal Drilling and Hydraulic Fracturing After a vertical well is drilled, the companies then drill horizontally. They then use millions of gallons of
water at high pressures down the well bore to fracture the shale rock deposits. This fracturing technique then
unlocks the natural gas from shale rock. Natural vertical fractures are important factors in the economic production
of gas from these rocks because the permeability of the natural fractures is almost always much higher than the unfractured
rock. Directional drilling has become a huge asset in all of these promising shale plays.
Lets talk
figures.....how much potential natural gas is in the Fayetteville Shale? Researchers estimate that the Fayetteville
Shale play could hold as much as 20 trillion cubic feet.
The chief executive of Chesapeake Energy Corp, who spoke
at an annual luncheon of the Arkansas Economic Development Foundation, says the Fayetteville Shale natural gas reserve in Arkansas will transform the state's economy.
Who
discovered Fayetteville Shale? Southwestern Energy's Arkansas subsidiary, SEECO Inc discovered one day
that the new frac techniques used at the Barnett Shale could be used at the Fayetteville Shale. Infact, in 2006 Southwest
and SEECO placed a 700 million dollar bet that this was the case. Another 900 million went in for 2007.
Basically
in short, back in 2002, while everyone was focused on the huge Barnett Shale....these two companies quietly did studies and
research on their own state shale, The Arkoma Basin. They drilled many wells and were shocked at what they found...they
immediatly thought the gas must be coming from the deeper Fayetteville Shale. Going into 2003, these two companies
tip toed their way into acquiring surface rights and mineral rights below the Arkmoa Basin which covered the Fayetteville
Shale. By the end of 2003, Southwestern Energy had spent about $11 million and acquired the rights to about 3,300 acres.
In 2004, Southwest officially used horizontal drilling and struck gold while not letting any of there recent strategic moves
out to the public. They then went on a leasing binge and eventually alerted the public.
As long as Natural
Gas Prices stay above $7, these shale plays are gold mines. Here are a list of companies drilling at Fayetteville as
we speak. Make sure to check out the other shale plays around the USA.
If anyone would like to add to my research, email me at tweid04@gmail.com
Fayetteville Shale Companies
- Fayetteville Shale Stocks Companies Drilling at Fayetteville Shale Gas Field
- Southwestern Energy SWN - SWN Southwestern held approximately 875,000 net acres in the
Fayetteville Shale play.
Through March 31, 2009, Southwestern had drilled and
completed a total of 938 operated wells in the Fayetteville Shale play, of which 856 are horizontal wells. Of the 856 horizontal
wells, 798 wells have been fracture stimulated using slickwater or crosslinked gel fluids. At March 31, 2009, the company’s
gross production rate from the Fayetteville Shale play was approximately 850 MMcf per day, up from approximately 400 MMcf
per day a year ago. The graph below provides gross production data from the company’s operated wells in the Fayetteville
Shale play area.
During the first quarter of 2009, the company’s horizontal wells
had an average completed well cost of $3.1 million per well, average horizontal lateral length of 3,874 feet and average time
to drill to total depth of 12 days from re-entry to re-entry. This compares to an average completed well cost of $3.1 million
per well, average horizontal lateral length of 3,850 feet and average time to drill to total depth of 13 days from re-entry
to re-entry in the fourth quarter of 2008. The company currently has 19 drilling rigs running in its Fayetteville Shale play
area, 15 that are capable of drilling horizontal wells and 4 smaller rigs that are used to drill the vertical portion of the
wells. The company plans to exit the year with 11 rigs capable of drilling horizontal wells and 4 smaller rigs, and currently
expects its gross well count in the play during 2009 to be 600 wells (75% operated), which is approximately the same number
of wells drilled during 2008.
- Chesapeake Energy CHK - CHK is drilling In the Fayetteville Shale (Arkansas): The Fayetteville Shale is currently the second
most productive shale play in the U.S. and one of the nation’s 10 largest fields of any type. In the Fayetteville, Chesapeake
is the second-largest leasehold owner in the Core area of the play. During the 2009 first quarter, Chesapeake’s average
daily net production of 202 mmcfe in the Fayetteville increased approximately 66% over the 2008 first quarter and approximately
16% over the 2008 fourth quarter. Chesapeake is currently producing approximately 200 mmcfe net per day (270 mmcfe gross operated)
from the play and anticipates reaching approximately 280 mmcfe net per day (420 mmcfe gross operated) by year-end 2009. Drilling
results by Chesapeake and other prominent operators in the Fayetteville Shale continue to improve. Chesapeake’s most
recent 30 operated wells appear to be 30% more productive than its targeted reserve estimate of 2.2 bcfe per well because
of drilling longer laterals, better geo-steering and enhanced completion techniques. Chesapeake anticipates operating an average
of approximately 20 rigs in 2009 and 16 rigs in 2010 to drill approximately 165 net wells in 2009 and 140 net wells in 2010
to further develop its 440,000 net acres of Core Fayetteville leasehold. During 2009, nearly all of Chesapeake’s drilling
costs, or approximately $550 million, will be paid for by its joint venture partner BP America (NYSE:BP). The company’s
estimated pre-tax rate of return from a targeted 2.2 bcfe Fayetteville Shale well drilled for $3.0 million (excluding the
benefit of drilling carries) is approximately 16% assuming current NYMEX natural gas and oil strip prices.
-
XTO Energy XTO - XTO Energy has made some great Fayetteville Shale findings. Fayetteville shale where we have now 380,000 net acres from our acquisitions and leasing efforts. In 2009 Fayetteville, we currently have 7 rigs running in the
Fayetteville play. Our first four wells that
we completed on the Southwestern acquisition have averaged 2.8 million a day, a couple at 3.5 to 4. So we're excited and
surprised I think with what we found on the Southwestern acquisition.
- PetroQuest Energy PQ - PetroQest PQ announces update for Fayetteville Shale.
Drilling continues in the Fayetteville Shale where the Company has six non-operated rigs working and approximately 18,000
net acres in the trend. 2009 Update: We participated in 33 successful non-operated horizontal Fayetteville shale wells during the fourth quarter and our average daily production was 6.7 million cubic feet
per day, which is up 35% compared to the third quarter of 2008. We are currently producing approximately 9 million cubic feet
per day at Fayetteville gas. Drilling is
starting to slow down as the price of natural gas falls.
- Petrohawk Energy HK- Petrohawk HK has been drilling the Fayetteville Shale for
Natural Gas - Petrohawk averaged two operated horizontal rigs in the Fayetteville Shale during the quarter. A
total of 14 operated wells and 95 non-operated wells were drilled during the quarter. As a consequence of the delay of the
completion of a new third-party pipeline system, the Company had an inventory of 27 operated wells that had not been fractured
stimulated by late in the quarter. Once the pipeline was put into service, Petrohawk initiated a frac program to take advantage
of new market dynamics; the Company has so far realized an approximate 60% reduction in fracture stimulation costs. Petrohawk
expects to have this inventory of wells completed and on production within the next several months.
Petrohawk continued
to experience lower gas price realizations during the first quarter due to pipeline construction delays in the region but
expect this situation to be normalized during second half of 2009. Petrohawk has assembled a position of approximately
157,000 net acres in the Fayetteville Shale, which we believe holds significant potential for production and reserve growth.
The Fayetteville Shale is an unconventional gas reservoir located in the Arkoma Basin in Arkansas, at a depth of approximately
1,500 to 6,500 feet and ranging in thickness from 100 to 500 feet. The formation is a Mississippian-age shale that has similar
geologic characteristics to the Barnett Shale in the Ft. Worth Basin of North Texas. Drilling in the play began in 2004 and
has accelerated rapidly during the past two years, with approximately 350 wells drilled during 2008
-
Storm Cat Energy SCU- SCU has announces positive developments at Fayetteville Shale
Natural Gas Field - The first three of the Company's 2008 Fayetteville development
program wells are now on production and tied into sales, two of which have undergone State of Arkansas Form 13 testing. Each
well continues to produce significant volumes of fracturing fluid. Notwithstanding, the Owen 1-18H tested at a rate of 1,240
thousand cubic feet per day (Mcf/d) and the Ballard 1-18H tested at a rate of 1,341 Mcf/d. The Company is very encouraged
by these test rates and anticipates that production from these wells will increase as cleanup progresses. The third well,
the Roberts 1-13H, is tied into sales and is about to undergo a Form 13 rate test.
.
Capital City Energy CETG- CETG supposedly has 30,000 acres in the Fayetteville Shale located in Van Buren and Cleburne Counties in Arkansas
but when I checked their website to confirm...I found nothing.
.
Deltic Timber DEL - Deltic Timber DEL doesn't drill in the Fayetteville Shale, they collect royalty payments for the land that
they have in the Fayetteville Shale play!!
With regard to the Fayetteville Shale Play, through June 30, 2008, we've received royalty payments
totaling some $564,000 from the production in units where some 21 wells have been drilled. As I've communicated in the
past, our ownership percentage in these units varies greatly. For the second quarter of 2008, royalty payments received averaged
just over $100,000 per month.
