re: Haynesville Shale

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The "tight sand" Cotton Valley wells in this area like the ones at Elm Grove generally produce at an initial rate of 1000 MCFGD to 1500 MCFGD (good ones) and then decline slowly for a long period of time (20 years or more). Some are better, and some are worse, but using Elm Grove as an example the individual wells cost 2-3 million to drill and complete. Good wells recover about 1-2 BCFG each on 20-40 acre spacing, also varying according to fields. From the limited data we have on the Haynesville, it is thought that they will cost 5-7 million to drill and will produce 10000 MCFGD or more. It is so early we don't have a good idea of decline rates or that information, but HK is already assuming 5 plus BCFG per well on 60 acre spacing. My guess is this will increase over time due to better technology and "trial and error" completion techniques. These wells also might produce for better than 30-50 years. Again, it is so early in the play we just don't know yet. But the way Chesapeake and others are moving ahead indicates that their own information that is not public indicates that this play is very, very substantial.

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