Fayetteville Shale | Southwestern Energy

Southwestern Energy Company discovered the economic viability of the Fayetteville Shale and was the first company to drill and successfully produce its natural gas. At December 31, 2012, Southwestern held leases for approximately 913,502 net acres in the Fayetteville Shale play area.
For the first three months of 2013, Southwestern placed a total of 102 operated horizontal wells on production in the Fayetteville Shale. At March 31, 2013, the company’s gross operated production rate was approximately 1,933 MMcf per day.
During the first quarter of 2013, the company’s horizontal wells had an average completed well cost of $2.1 million per well, average horizontal lateral length of 4,942 feet and average time to drill to total depth of 5.4 days from re-entry to re-entry. This compares to an average completed well cost of $2.3 million per well, average horizontal lateral length of 4,784 feet and average time to drill to total depth of 5.7 days from re-entry to re-entry in the fourth quarter of 2012. In the first quarter of 2013, the company had 53 operated wells placed on production which had average times to drill to total depth of 5 days or less from re-entry to re-entry. In total, the company has had a total of 296 wells drilled to total depth of 5 days or less from re-entry to re-entry.
The company’s wells placed on production during the first quarter of 2013 averaged initial production rates of 3,301 Mcf per day. In April of 2013, the company placed 40 wells on production at an average initial production rate of approximately 3,519 Mcf per day, 28 of which have peaked at an average rate of 3,710 Mcf per day with 12 wells still cleaning up.
During 2013 the company’s gross operated production in the Fayetteville is expected to grow approximately 4%, however, the company’s net revenue interest is expected to change from approximately 64% in 2012 to 61% in 2013. As a result, total net production from the Fayetteville Shale in 2013 is expected to be 475 to 480 Bcf, compared to 486 Bcf in 2012. The change in net revenue interest in 2013 reflects the move to increased drilling on the eastern side of the field however, longer term, the company’s average net revenue interest is expected to be approximately 64%.
In 2013 the company plans to invest approximately $900 million in the Fayetteville Shale, $830 million of which will be directed toward the drilling of approximately 385 to 390 gross wells in 2013, all of which will be operated. Southwestern expects that the average time to drill its operated horizontal wells to total depth from re-entry to re-entry will continue to decrease in 2013 to approximately 6.5 days from approximately 6.8 days projected for 2012. The company’s average 2013 completed well cost is estimated to be $2.7 million per well with a 5,100 average horizontal lateral, compared to an estimated $2.8 million well cost with an average horizontal lateral length of 4,600 feet in 2012.
Last Updated on 05/06/2013