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Tickers in this Article: HK, MHR, FST, ROSE
Petrohawk Energy (NYSE:HK) held an analyst meeting last week and disclosed additional details on its activities in the Eagle Ford Shale, with particular emphasis on the potential of its oil and liquids area in the play.

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Petrohawk Energy has three main areas in the Eagle Ford Shale under development. The company has 369,000 net acres under lease spread across the play, with approximately 61% located in the oil window or liquids heavy sections. Petrohawk Energy expects to exit 2010 producing from 70-90 million cubic feet equivalent per day from all its properties.

Red Hawk
The Red Hawk prospect is in the oil window of the Eagle Ford Shale, and is located in Zavala County. Petrohawk Energy has 87,000 net acres here, and the company's first well had an initial production rate of 350 barrels of oil per day. A second well is under completion at Red Hawk.

Wells in Red Hawk are at the shallowest part of the Eagle Ford Shale, with the one well completed there at a depth of approximately 6,000 feet, compared to 11,000 to 13,000 foot depths in Petrohawk Energy's other development areas.

The Hawkville field was the first area of the Eagle Ford Shale that Petrohawk Energy got involved with back in 2008. Wells here produce dry gas, along with condensate in some parts of the field. Two years after the first well was spud, the company has 228,000 net acres under lease and 27 operated wells on production.

Hawkville is located between the Edwards Reef trend and the Sligo Shelf margin, which are structural highs on a depositional basis. This caused a large accumulation of sediment for this section of the Eagle Ford Shale. Leases sizes here are very large, which makes it easier for the company to hold acreage by drilling a small number of wells.

Petrohawk Energy is moving toward drilling wells here with longer laterals, and completing the wells with different types of drilling fluids. The company estimates well costs here at $5 million to $6.5 million for 6,000 foot laterals.

Black Hawk
The third development area for Petrohawk Energy is the Black Hawk prospect, which is in the condensate window of the Eagle Ford Shale. Wells here produce natural gas with a high yield of condensate. Petrohawk Energy has completed three wells here to date, and is using an estimated ultimate recovery (EUR) per well of 2.2Bcf of natural gas, and 375,000 barrels of oil.

Petrohawk Energy estimates its 3P reserves for Hawkville, Black Hawk and Red Hawk at 9.7, 2.8 and 1.3 Tcfe, respectively. The company is at an early stage of development of these areas so the estimates are subject to revision.

Other operators in the Eagle Ford Shale include Magnum Hunter Resources (NYSE:MHR), which just entered into an area of mutual interest agreement with Hunt Oil Company to develop acreage there. Rosetta Resources (Nasdaq:ROSE) has a large project called Gates Ranch, and plans on drilling as many as 30 wells in 2010 at that project and elsewhere in the shale. Forest Oil (NYSE:FST) added to its acreage in the Eagle Ford Shale during the first quarter of 2010, and now has 102,000 net acres under lease.

The Bottom Line
Petrohawk Energy fleshed out its large acreage position in the Eagle Ford Shale, which is well distributed across the oil, condensate and dry gas areas of the play. This will power growth for the company over the next few years. (For more stock analysis, read Big Energy Dividends.)

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