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- News Bits -

 *- Devon Energy Announces Successful Haynesville Well in San
Augustine County
Devon Energy Corporation announced the results of a successful Haynesville Shale well in San Augustine County, Texas.
The  Kardell Gas Unit 1H achieved an average continuous 24-hour flow rate of approximately 30.7 million cubic feet of natural
gas equivalent per day through a 37/64-inch choke. Flowing pressure was 6,824 pounds per square inch. The Kardell well was
drilled  to a total measured depth of 18,350 feet, including a horizontal lateral section of approximately 4,500 feet. Devon operates
the well with a 48 percent working interest. Crimson Exploration Inc. owns the remaining 52 percent working interest. Following the
outstanding success of this first well in San Augustine County, Devon plans to accelerate drilling activity in the area. Devon's southern
Haynesville Shale acreage comprises 47,000 net acres principally located in the Texas counties of San Augustine and Sabine and in
Sabine Parish, Louisiana. Devon holds a 100 percent interest in its primary term leases in the southern area. (Source: Devon Energy)

*- Denbury Resources Agrees to Purchase Conroe Field and Sell Remaining Barnett Shale Assets
Denbury Resources Inc. announced that it has entered into an agreement with Wapiti Energy, LLC (“Wapiti”) a Houston based privately-owned company to purchase a 95% working interest in the Conroe Field, a significant potential tertiary flood north of Houston, Texas, for approximately $430.7 million consisting of $256.4 million in cash and 11,620,000 shares of Denbury common stock. The number of shares of Denbury common stock to be issued in the acquisition is fixed and equate to a value of $174.3 million assuming a stock price of $15 per share. The transaction is expected to close on or before December 18, 2009. The Company plans to fund the cash portion of the purchase initially with bank debt, but expects to cover approximately $210 million of the cash portion of this purchase with the sale of its remaining Barnett Shale assets. (Source: Denbury Resources)

*- Forest Oil Announces Agreement to Sell Remaining Permian Basin Assets
Forest Oil Corporation announced that it has entered into a definitive agreement to sell to SandRidge Exploration and Production, LLC, a wholly owned subsidiary of SandRidge Energy, Inc. (NYSE:SD), the remainder of its Permian Basin properties in West Texas and New Mexico for approximately $800 million. The transaction is expected to close on or before December 31, 2009, with an effective date of November 1, 2009, and is subject to customary closing conditions and post-closing purchase price adjustments. The divested properties are currently producing 46 MMcfe/d and had estimated proved reserves of 321 Bcfe (67% proved developed) as of December 31, 2008. (Source: Forest Oil Corp.)

*- El Paso Reports Initial Results from First Eagleford Well
El Paso announced that its first Eagle Ford shale well in La Salle County, Texas (Briscoe-Nunley GU - Well # 1H) was recently drilled with a 4,000 foot horizontal lateral and completed with a 16-stage frac. The well is still cleaning up with volumes steadily increasing. The current flow rate is approximately 6.1 MMcfe/d with a flowing tubing pressure of 5,200 psi. The company has almost doubled its lease position to 112,000 net acres. El Paso will maintain a one-rig program as it progresses in this new play. (This article is a portion of a release from El Paso Energy). The Briscoe-Nunley GU #1H is located in Section 42, BS&F Survey, Abstract 1798, being 11.7 miles northeast of Encinal, Texas). (Source: El Paso E&P)

*- Eagle Ford Shale Discovery in Webb County
St. Mary Land & Exploration Co. out of Houston, Texas has filed a new field discovery application for its Briscoe AR Lease, Well No. 1H (API No. 42-479-40603), proposed Apache Ranch (Eagle Ford) Field, located in Section 1042, LI&A Assoc./J. Cruz Survey, Abstract 2976, 41.3 miles northwest of Laredo, Texas. The well encounters the top of the Wildcat ‘Eagle Ford’ Reservoir at 7,878’ TVD (7,894’ MD) and the base of the reservoir at 8,172’ TVD (8,188’ MD). The discovery well was completed on 9-30-2009 and had an initial 24 hr. rate (on 10-7-09) of 8,092 mcf of gas per day, 28 barrels of condensate per day and 937 barrels of water per day through a 1” choke with 1,070 pounds of flowing tubing pressure. The well produces from a horizontal lateral from 8,515’ to 12,642.5’ measured depth. The Eagle Ford was fracture stimulated with 3,466,700 pounds of proppant and 278,460 barrels of water in 14 stages. (Source: Texas Drilling Observer)

*- New Field Proposed for Spraberry Interval, Dawson County
Big Star oil & Gas LLC out of Midland, Texas has filed a new field discovery application for its Hughes 30 Lease, Well No. 2 (API No. 42-115-33287), proposed Powe (Spraberry) Field, located in Section 30, Block 2 T6N, TT RR Co/JA Hancock Survey, Abstract 1405, 7 miles northeast of Lamesa, Texas. The well encounters the top of the Wildcat ‘Spraberry’ Reservoir at 6,985’ and the base of the reservoir at 8,024’. The discovery well had an initial rate of 22 barrels of oil per day and 107 barrels of water per day with a producing gas-oil ratio of 841 cubic feet per barrel. The gravity of the oil is 39 degrees API. The well produces through perforations from 7,262’-7,268’ and 7,272’-7,278’.(Source: Texas Drilling Observer)

*- Pioneer Natural Resources Drills Successful Eagle Ford Shale Well in Live Oak County
Pioneer Natural Resources Company announced a significant discovery in the Eagle Ford Shale in South Texas. The Sinor #5 well, which is located in Live Oak County, Texas, flowed at an initial rate of approximately 11.3 million cubic feet of natural gas equivalent per day (approximately 8.3 million cubic feet of natural gas per day and 500 barrels of condensate per day) on a 22/64 inch choke with 4,550 pounds per square inch wellhead flowing pressure. The liquids-rich gas contains 1,200 British thermal units per cubic foot. The well was drilled to a true vertical depth of approximately 13,000 feet and completed in a 2,600-foot lateral section with a nine-stage fracture stimulation (frac). The well is currently producing to sales. (Source: Pioneer Natural Resources)

*- Gas Discovery in Pettit Formation, Cherokee County
Buffco Production Inc. out of Kilgore, Texas has filed a new field discovery application for its Curtis Gresham Lease, Well No. 1 (API No. 42-073-31450), proposed Bufkin (Pettit) Field, located in Section 242, J. Orchard Survey, Abstract 660, 4.7 miles northeast of Rusk, Texas. The well encounters the top of the Wildcat ‘Pettit’ Reservoir at 9,205’ and the base of the reservoir at 9,280’. The discovery well was completed on 9-1-2009 and had an initial 24 hr. rate (on 9-17-09) of: 1,526 mcf of dry gas per day (no condensate) through an 18/64” choke with 965 psi flowing tubing pressure. The shut-in wellhead pressure was 3,715 psi. The shut-in bottom hole pressure was 4,435 psi. The calculated absolute open flow rate was 1,657 mcf/day. The gravity of the gas is 0.613. The well produces through perforations from 9,220’ to 9,226’ and 9,256’ to 9,258’. Those intervals were stimulated with 1,000 gallons of NEFE. The well was drilled to a total depth of 11,566 feet. (Source: Texas Drilling Observer)

*- Kinder Morgan Requests Consolidation of Katz Fields in Preparation of Tertiary Recovery Operations
Kinder Morgan Production Co. proposed consolidation of the Katz, Katz (Day) and Katz (5100) Fields located in Haskell, King, Knox and Stonewall Counties, to be known as the Katz (Strawn) Field, and for special field rules for the proposed consolidated field, at a Railroad Commission hearing held on Tuesday, October 13th. Kinder Morgan became operator of the East River Unit, C.B. Long Unit and Southwest River Unit in May 2006 with the sole purpose of conducting a CO2 flood of the entire Strawn interval. The CO2 flood will entail combining the Southwest River Unit, C.B. Long Unit and East River Unit plus four new leases obtained by Kinder Morgan into a new “super unit”. The unitized interval for this new “super unit” will be the same as the correlative interval proposed by Kinder Morgan for the consolidated Katz (Strawn) Field. Kinder Morgan is currently in the process of issuing ratifications for this super unit. Kinder Morgan has allocated over $180 million towards the CO2 flood project in the Katz Field. (Source: Texas Drilling Observer)

Texas Drilling Observer
(512) 372-9772
P.O. Box 11648
Capitol Station
Austin, TX 78711-1648