Tickers in this Article: HK, XOM, MHR, SWN
Petrohawk Energy (NYSE:HK) plans to accelerate the development of the oil and liquids rich areas of the Eagle Ford Shale in 2011, as this gassy exploration and production company shifts away from the commodity the company was built on. The company will also devote enough capital in 2011 to hold its acreage in the Haynesville Shale.

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Capital Budget
Petrohawk Energy has allocated $1.9 billion in capital in 2011 to drill and complete wells on its acreage in the United States. The company will allocate $900 million each to the Haynesville and Eagle Ford Shale. This capital will be used to drill 332 gross wells in the Haynesville Shale and 145 gross wells in the Eagle Ford Shale. Petrohawk Energy estimates that this capital will be enough to grow production by 35% in 2011 compared to 2010.

This is a very different picture than 2010 when Petrohawk Energy put $1.3 billion into the Haynesville Shale and $350 million into the Eagle Ford Shale.

Eagle Ford Shale
Petrohawk Energy has 357,000 net acres in the Eagle Ford Shale, including 225,000 in the oil and condensate window of the play. The company's two main oil and liquids areas are the Black Hawk and Red Hawk projects.

Petrohawk Energy has 76,000 net acres at the Red Hawk project and has drilled three wells here through mid November 2010. The company is a little farther along in development at Black Hawk and drilled 31 wells on its 53,000 net acres here.

Another company active in developing the Eagle Ford Shale is Magnum Hunter Resources (NYSE:MHR), which spent $30 million in 2010 on acquiring acreage and drilling on its properties.

Haynesville Shale
Petrohawk Energy plans to decrease development of the Haynesville Shale in 2011. The company will start the year with 16 operated rigs and reduce that to only seven by the end of 2011. This reflects the end of the frantic effort by Petrohawk Energy and the rest of the exploration and production industry to hold its acreage under lease in the Haynesville Shale.

Despite this reduction in spending, Petrohawk Energy has allocated enough capital to convert most if its acreage in the Haynesville Shale from term to held by production.

Fayetteville Shale
Petrohawk Energy won't have to put any capital into the Fayetteville Shale in 2011, as the company recently announced the sale of its properties and midstream assets in this basin to Exxon Mobil (NYSE:XOM) for $650 million. Southwestern Energy (NYSE:SWN) is generally recognized as the leader in the Fayetteville Shale, and in 2011 will put $1.15 billion into this play.

The Bottom Line
Petrohawk Energy is shifting capital in 2011 from natural gas development in the Haynesville Shale to oil and liquids development in the Eagle Ford Shale. The company also has budgeted enough capital in 2011 to hold its acreage in the Haynesville Shale. (For related reading, take a look at What Determines Oil Prices?)

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