Southwestern Energy Boosts Fayetteville Shale Play Production

Southwestern Energy Co. of Houston increased its production in the Fayetteville Shale Play by 60 percent during its third quarter.

Steve Mueller; Southwestern Energy’s president and CEO, speaking in a telephone conference call last week on the company’s third quarter earnings report, said, “During the third quarter of 2009, we produced 73.2 Bcfe, up 38 percent from the third quarter of 2008. Our Fayetteville shale production was 58.8 Bcf, 60 percent greater than the 37.2 we produced in the third quarter of 2008. Our remaining third quarter production came from east Texas, where we produced 9.0 Bcf and 5.3 Bcf from our conventional Arkoma properties.”

Mueller said repairs and maintenance on the Texas Gas transmission pipeline, laterals for the Fayetteville and Greenville areas, caused the company to experience curtailments that impacted its ability to transport its production. Beginning on Oct. 8, the Fayetteville Lateral was placed back into service after being shut down since Sept. 1. The Greenville Lateral was also placed back in service in October after the shutdown.

With the completion of these repairs and the continued strong performance of its Fayetteville shale and East Texas wells, Mueller said the company is revising its previous gas and oil production guidance for 2009 from 278 to 288 Bcfe to the new range of 297 to 300 Bcfe. “At this higher production guidance, we expect to have production growth of approximately 53 percent over 2008 levels,” Mueller said.

In the first nine months of 2009, Southwestern Energy invested approximately $1.2 billion in exploration and production activities and participated in drilling 476 wells. Additionally, the company said it invested $167 million in its midstream segment almost entirely in the Fayetteville shale.

For the first nine months of the 2009, the company invested approximately $1 billion in the Fayetteville shale play, Mueller said, including both E&P and midstream activities. As of Oct. 24, gross production rate in the Fayetteville shale play was approximately 1.23 Bcf per day, double the 600 MMcf per day from a year ago. “We currently have 17 drilling rigs running the Fayetteville, 13 that are capable of drilling horizontal wells and 4 smaller rigs that are used to drill the vertical portion of the holes,” Mueller said.

During the third quarter, the company placed three wells in production with initial production rates over 6 MMcf per day. Between the end of the third quarter through Oct. 23, it placed two additional wells on production with initial rates over 6 MMcf a day, including our highest rate well to date, the Linda Linn 08-12 1-23H, located in Faulkner County with initial production rate of 6.7 MMcf per day.


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