Petrohawk Eagle Ford Shale History

Petrohawk Energy (HK),  is widely credited with drilling the first successful wells in the Eagle Ford shale play. Although other companies, such as Lewis Energy, had experimented with completions in the Eagle Ford shale, only Petrohawk came to South Texas with the right mix of experience and capital to make the wells pay. In October of 2008, Petrohawk Energy drilled their first Eagle Ford shale well, the STS-241-H, in the South Texas Syndicate field in central LaSalle County. The discovery well was followed by the Dora Martin 1-H and Donnell 1-H and Brown Trust 1-H.

The company came to South Texas looking for a shale formation analogous to the Haynesville shale (located in Texas, Oklahoma and Arkansas), where they had good success with completions involving multi-stage frac jobs on horizontal wells. What they found  was ultimately proclaimed “the largest domestic oil and gas discovery in over forty years.  In the beginning, Petrohawk’s focus was on natural gas in the Eagle Ford. Based on seismic surveys and well logs they began acquiring what appeared to be the best acreage prospective for natural gas. Ironically,  natural gas prices in North America became depressed, due in part to the success of companies like Petrohawk Energy, who were drilling horizontal wells in gas rich formations such as the Haynesville shale.  As natural gas prices fell, the value of oil and natural gas liquids continued to increase. Large volumes of oil and natural gas liquids were discovered in the middle and upper areas of the play, and the leasing game abruptly changed.

As more wells were drilled in the play it was determined that the central and upper part of the Eagle Ford was where the money was to be made.  In a strategic move that has been widely hailed as a “major coup” in the oil and gas industry, EOG Resources began to stealthily lease up all of the “wet” Eagle Ford shale acreage that they could get their hands on, much of it at prices under $500 per acre. EOG Resources soon overtook Petrohawk as the largest leaseholder in the Eagle Ford shale, (with currently over 600,000 net acres) and became the biggest liquids producer. In a game of “catch up”, Petrohawk Energy’s Eagle Ford shale strategy soon shifted to gaining more acreage in the oil and gas and condensate windows of the play. As the estimated ultimate recovery potential of wells in the oil and condensate bearing zones of the Eagle Ford was realized, lease rates soared to as high as $8000 an acre in some of the “sweet spots”. Currently Petrohawk Energy’s acreage in the Eagle Ford shale is around 332,300 net acres.

Map Of Petrohawk Energy’s Eagle Ford fields and shale thickness.

The Hawkville Field

Petrohawk Energy named the discovery field the “Hawkville Field” and this name was adopted by the Texas Railroad Commission. This field, located in LaSalle and McMullen counties, comprises the bulk of the company’s Eagle Ford shale holdings at 236,000 acres. Much of the acreage is in the “wet gas” window of the play, with shale thickness, shown in red, of up to 375 feet. 2010 year end proven reserves for the Hawkville field were 627 Bcfe.

From the company website:

“The wells have an average true vertical depth that ranges from 10,500 feet to 12,500 feet and they are drilled with horizontal laterals currently ranging from 5,000 feet to 7,000 feet. The wells are cased hole completed and are currently being fracture stimulated with an average of 18 stages. There are currently 27 wells which produce condensate with yields ranging from six barrels per million cubic feet (Bbls/Mmcf) to 199 Bbls/Mmcf and had an average initial producing rate of 311 barrels of oil per day (Bo/d). There are currently 23 wells which produce dry gas and had an average initial producing rate of 8.6 million cubic feet of natural gas per day (Mmcf/d). We had 16 operated wells and four non-operated wells that were pending completion and three wells that were drilling in this field at year-end.”

In the Hawkville Field, Petrohawk Energy is having good success with the HiWay fracturing method developed by Schlumberger. The HiWay technique is reported to produce higher initial production rates and long term flow rates.  The HiWay fracturing technique combines “fit – for – purpose fracture modeling”, specialized frac fluids and “high frequency proppant propulsion”.

Black Hawk and Black Hawk Extension

Petrohawk Energy has a leasehold of approximately 69,000 net acres located in Karnes and DeWitt Counties, Texas.

“The Black Hawk Eagle Ford Shale pay thickness is over 170 feet. The wells have an average true vertical depth that ranges from 12,000 feet to 13,500 feet and they are drilled with horizontal laterals currently averaging over 5,500 feet. The wells are cased hole completed and are currently being fracture stimulated with an average of 18 stages. There are currently 12 wells which produce condensate with yields ranging from 213 Bbls/Mmcf to 517 Bbls/Mmcf and had an average initial producing rate of 1,170 Bo/d. We had 15 wells that were pending completion and five wells that were drilling in this field at December 31, 2010. The gross production from this field is currently 22 Mmcf/d plus 8,200 Bo/d. As of December 31, 2010, proved reserves were approximately 109 Bcfe, of which approximately 34 percent were classified as proved developed and 72 Bcfe as proved undeveloped. The proved reserves include 27 proved developed wells and 41 proved undeveloped locations. During 2010, we drilled 29 wells with no dry holes and there are 85 wells budgeted for 2011.” 

Petrohawk acquired approximately 10,500 net acres from a private company in December 2010. This new acreage is to the west/southwest of Black Hawk field. Petrohawk Energy has a 96 percent working interest and 79 percent net revenue interest in the acreage. There is currently no production but the first well is planned for 2012.

Red Hawk Field

Petrohawk Energy’s Red Hawk field consists of 77,000 net acres in Zavala county. Eagle Ford shale thickness there is from 100 – 140′. Currently there are three wells with initial production averaging 375 barrels per day, with an inconsequential amount of natural gas. Five wells are planned for the Red Hawk field in 2011.

Acquired By BHP Billiton

The Australian mining firm BHP Billiton recently acquired Petrohawk Energy for a sum of approximately 12 billion dollars. At this price, Petrohawk Energy’s Eagle Ford shale acreage was valued at approximately $15,000 per acre. The company has come a long way from its humble beginnings as an independent energy company called Beta Oil and Gas that was started in Houston in 2003.  We can expect Petrohawk to continue to be one of the leading natural gas, oil and natural gas liquids producers in the play. Long term takeaway agreements have been reached for Eagle Ford gas and liquids, including a joint venture with Kinder Morgan Energy Partners. The Kinder Morgan – Petrohawk Energy Eagle Ford joint venture will include 280 miles of gas gathering lines and 112 miles of gas condensate gathering lines.

For more about Petrohawk Energy’s Eagle Ford shale operations and news, you can visit their Website

Article by Nolan Hart.