The results of wells drilled to the Bossier Shale during the second quarter of 2010 indicate that this formation will most likely be a prolific source of future natural gas production in the United States.
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The problem, of course, is that the last thing that the natural gas market needs is another prolific source of future natural gas production. What the market needs is a prolific source of future natural gas demand.
The Bossier Shale is present across areas of East Texas and Louisiana and lies above the better known Haynesville Shale. Some operators refer to the Bossier Shale as the Upper Haynesville.
Devon Energy (NYSE:DVN) reported the results of the company's first Bossier Shale well during the second quarter of 2010. The well was in San Augustine County, Texas, and had an initial production rate of eight million cubic feet per day. Devon Energy has approximately 157,000 net acres prospective for the Bossier and Haynesville Shale across Texas and Louisiana.
EOG Resources (NYSE:EOG) also reported a successful Bossier Shale completion during the second quarter of 2010. The Red River 5#3H was drilled and completed in DeSoto Parish, Louisiana, and had initial production of 15.2 million cubic feet per day of natural gas.
During the quarterly earnings conference call, EOG Resources indicated that the company's other Bossier Shale wells were performing as expected, and "appear to be as good as our Haynesville wells."
EXCO Resources (NYSE:XCO) is active in the Bossier Shale and reported two well completions in DeSoto Parish, Louisiana, during the second quarter of 2010. The wells had initial production rates of 11 and 13 million cubic feet per day. Despite the decent initial production rates, EXCO Resources said that due to low returns, the company would not drill any other Bossier Shale wells in that area in 2010.
Wells to Come
Goodrich Petroleum (NYSE:GDP) reported that the SW Henderson 1H and R Dean 1H wells in Texas each encountered approximately 200 feet of Bossier Shale pay. The company said that it would drill the R Dean 2H well shortly, which will be its first Bossier Shale completion.
Petrohawk Energy (NYSE:HK) reported that the company drilled the Whitney 19#1H to the Lower Bossier Shale during the second quarter of 2010. Petrohawk Energy plans to start fracturing the well in August 2010. The well is in Sabine Parish, Louisiana, and is the company's first horizontal Bossier Shale well.
The most recent well to the Bossier Shale was reported after the end of the second quarter of 2010. Crimson Exploration (Nasdaq:CXPO) reported that the Grizzly #1 well was producing at a rate of 11.5 million cubic feet per day of natural gas. The company is restricting production on this well, as it believes that this will lead to a greater estimated ultimate recovery (EUR) in the long term.
The Bottom Line
The Bossier Shale got some attention from the exploration and production industry during the second quarter of 2010, but do we really need more natural gas supply given current fundamentals? (For related reading, take a look at What Determines Oil Prices?)
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