The exploration and production industry continued to test selected emerging shale oil and natural gas formations in the onshore United States during the third quarter of 2012, as operators look for the next big thing to generate future growth.

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Lower Smackover Brown Dense
Southwestern Energy (NYSE:SWN) has several emerging plays in the company's New Ventures portfolio, including the Lower Smackover Brown Dense formation in Arkansas and Louisiana. The company has built up a leasehold of 506,000 net acres exposed to this formation at an average cost of only $419 per acre. The Lower Smackover Brown Dense formation is approximately 300 to 550 feet thick and is present at depths from 8,000 to 11,000 feet.

To date, the company has drilled six wells into the Lower Smackover Brown Dense formation and plans to put two of these wells onto sales in November 2012. Southwestern will also re-enter two other wells and complete these horizontally in early 2013.

SEE: A Guide To Investing In Oil Markets

Tuscaloosa Marine Shale
Goodrich Petroleum (NYSE:GDP) has been testing the potential of the Tuscaloosa Marine Shale and spent $10.9 million, or 19% of its capital budget in this play during the third quarter of 2012. The company has 132,000 net acres prospective for this play across Louisiana and Mississippi.

Goodrich has finished hydraulic fracturing operations on its first operated well here and plans to flow back the well after correcting a casing issue and installing tubing. The company is involved in approximately half-dozen other wells that are being drilled, completed or permitted into the Tuscaloosa Marine Shale.

The Tuscaloosa Marine Shale is present on Goodrich Petroleum's acreage at depths of between 11,000 and 13,000 feet and is approximately 100 to 200 feet thick. The formation produces crude oil with an American Petroleum Institute gravity rating from 38 to 44 degrees, indicating high quality light crude oil.

SEE: Oil And Gas Industry Primer

Geneseo Shale
Ultra Petroleum (NYSE:UPL) and Range Resources (NYSE:RRC) both have significant operations in the Appalachian Basin, where both operators are focused mostly on the Marcellus Shale. The leasehold is also prospective for the Geneseo and other Upper Devonian shale plays and the two companies have been selectively evaluating these plays.

Ultra Petroleum put two Geneseo Shale wells onto production during the third quarter of 2012, and has a total of four wells producing from this formation. The company estimates that it has approximately 1,000 net drilling locations into the Geneseo Shale with potential net resources of 3 trillion cubic feet.

Range Resources is also evaluating various Upper Devonian shale formations on its leasehold and reported a recent well with a peak 24-hour production rate of 552 barrels of natural gas liquids and 4.7 million cubic feet of natural gas per day. The company is not planning any additional Upper Devonian wells in 2012 and is currently working on its 2013 program.

The Bottom Line
The exploration and production industry is always on the search for new sources of oil and natural gas to replace depleting reserves and made progress on this quest during the third quarter of 2012.

At the time of writing, Eric Fox did not own any shares in any company mentioned in this article.