Wednesday, December 22, 2010

SM Energy Company (SM): Haynesville Shale Update

By Andrea:

SM Energy Company (SM) recently released an operational update on the Haynesville shale, located in East Texas:

Approximately $35 million is budgeted for Haynesville shale activity in 2011. SM Energy has budgeted five (5) gross operated horizontal wells for 2011, of which the majority of costs will be carried under the previously announced carry and earning agreement covering a portion of our acreage position in East Texas. The Company will also participate in approximately 20 gross (approximately 2 net) partner-operated horizontal wells next year.

SM Energy is currently exploring a number of options for its operated Haynesville shale acreage position in East Texas which would allow the Company to drill enough wells in 2011 and early 2012 to hold its existing acreage while minimizing the amount of capital deployed. Twelve (12) gross wells in 2011 in addition to the operated wells discussed above and eight (8) gross wells in 2012 would need to be drilled to hold the Company's acreage position. The Company has approximately 22,000 net acres in the Shelby Trough in East Texas that is prospective for both the Haynesville and Bossier shales as well as other productive zones up hole.

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