East Texas | Southwestern Energy

Southwestern Energy Company was a newcomer to East Texas in 2000 when it purchased nearly 11,000 acres in the Overton field. At that time, 16 wells were producing a modest 1.8 MMcf per day. By applying the principles of the company’s Formula for Success, employees used new drilling and completion techniques to yield outstanding results. Over the next eight years, the company drilled and completed over 400 wells producing more than 100 billion cubic feet of gas and developed more than 400 billion cubic feet of gas reserves. Southwestern’s opportunities in East Texas continue to expand in the Angelina River Trend area’s James Lime, Pettet, Travis Peak, Cotton Valley, and Haynesville/Bossier Shale formations.
On June 30, 2010, Southwestern closed the previously announced sale of certain oil and gas leases, wells and gathering equipment held by the company in East Texas. Total net proceeds from the sale were $355.8 million. The sale included only the producing rights to the Haynesville and Middle Bossier Shale intervals in approximately 20,063 net acres. The company has retained the drilling and producing rights covering all other depths in the acreage, including the company’s current James Lime and Pettet drilling programs.
Southwestern still has approximately 10,500 net acres with Haynesville and Middle Bossier Shale potential. The company drilled two wells on this acreage (Hawthorne prospect) in the second quarter, the Timberstar Blackstone A-1H well targeting the Haynesville Shale formation and the Harris B-1H well targeting the Middle Bossier Shale formation. The Blackstone well is currently being completed and the Harris well will be completed in the fourth quarter. A third well, the Crest C-1H, is currently drilling and will be completed in the fourth quarter.
Production from the company’s East Texas properties was 19.2 Bcfe during the first six months of 2010, compared to 15.6 Bcfe during the same period last year. Approximately 2.1 Bcfe of company’s 2010 production was related to its Haynesville and Middle Bossier properties which were sold in June. Southwestern participated in drilling 26 wells in East Texas during the first six months of 2010, 9 of which were James Lime horizontal wells, 13 of which were Haynesville horizontal wells and 4 of which were Pettet horizontal oil wells. Initial production rates from James Lime wells that were placed on production during the second quarter averaged 7.2 MMcfe per day and initial production rates from Pettet oil wells that were placed on production during the quarter averaged 505 barrels of oil per day, with 0.7 MMcf per day of associated gas.
As a result of the sale, Southwestern has revised its capital program in East Texas for calendar year 2010 to approximately $185 million, which includes participating in approximately 35 to 45 gross wells, down from $230 million, which had included 50 to 60 wells.

Last Updated on 08/11/2010