Tickers in this Article: SWN, CHK, XTO, PQ, BWP
The Fayetteville Shale remained the second-most productive shale play in North America in 2009, but it slowed down a little as operators shifted capital to newer shale plays. This was not due to issues with the Fayetteville Shale, which still has excellent economics, but an attempt to build low-cost positions in other areas before demand made that impossible.

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The Clear Leader
Southwestern Energy (NYSE: SWN) was still the clear leader in 2009 and directed 70% of its $1.8 billion in capital expenditures to develop its acreage here. This investment helped double its natural gas production from the Fayetteville Shale during the year to 1.2 billion cubic feet per day in October 2009, up from 600 million cubic feet per day a year ago. The company also provided an objective lesson on how important infrastructure is in these fast-growing shale plays, as the company saw some of its production curtailed during 2009 due to problems with a pipeline that serves the Fayetteville Shale. (For related reading, check out Oil And Gas Industry Primer.)

Boardwalk Pipeline Partners (NYSE: BWP), which owns the Greenville and Fayetteville laterals of the Boardwalk pipeline, had to reduce capacity on this pipeline due to repair and maintenance issues. This curtailment even forced Southwestern Energy to reduce production guidance for 2009.

The Second-Largest Producer
Chesapeake Energy
(NYSE: CHK) was the second-largest producer in the Fayetteville Shale in 2009 and had 445,000 net acres under lease. Although the company has 4,100 drilling locations here, Chesapeake Energy only operated 14 rigs here in 2009, less than its rig count in either the company's Haynesville or Marcellus properties.

XTO Energy (NYSE: XTO) has a large base of non-operated wells in the Fayetteville Shale and ramped up its own development program in 2009. The company's plan was to drill up to 110 wells here.

Smaller Companies Made Tough Capital Choices
Smaller exploration and production companies had to make tough choices on where to put scarce capital in 2009. Petroquest Energy (NYSE: PQ) has been transitioning the last few years from a Gulf Coast company to a more balanced one with onshore properties. The company chose to drill four wells in the Woodford Shale toward the end of 2009 rather than on its 18,000 net acres in the Fayetteville Shale. The Fayetteville Shale suffered in 2009 as operators quickly moved to build and hold positions in newer and faster-growing North American shale plays. (For related reading, check out Investing In Oil And Gas UITs.)

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