LAFAYETTE, La., Dec. 6, 2010 /PRNewswire/ -- PetroQuest Energy, Inc. (NYSE: PQ) announced today that it has completed operations on its first two test wells in the Niobrara formation. The wells were designed to test differing geologic concepts relative to natural fracturing. The initial test well (Peterson #1- WI-25%) was selected to evaluate a location with less expected natural fracturing. The 4,962 foot lateral well was completed in November, but did not produce oil in commercial quantities.
The second well (Nevis #2, NRI-20%) was drilled approximately 15 miles from the Peterson #1 and tested a location where more natural fracturing was expected. The well was drilled with a 5,298 foot lateral section (20 frac stages) and was completed at an initial 24 hour gross daily rate of 831 barrels of oil and 205 Mcf of gas after cleaning up. Through the first two weeks of production, the well has averaged approximately 570 barrels of oil per day and is currently flowing at 407 barrels of oil per day. The Company estimates that the average gross cost per well for the initial two test wells was approximately $4.5 million.
Based on the results of the Nevis #2, the Company plans to proceed with a development plan in 2011 on its Niobrara acreage. The Company has a 25% non-operated working interest in approximately 20,000 gross acres (5,000 net acres) located in Southern Wyoming. Based on initial plans, the Company expects to participate in 12-15 gross wells during 2011. The Company expects to spud its third well (Hester #3, WI-25%) in January 2011.
The Company has reached total depth on its forty-third Woodford operated horizontal well (4,592 foot lateral). The Company expects to complete its forty-second (5,068 foot lateral) and forty-third Woodford operated wells before year-end. In addition, the Company has taken delivery of its second Woodford rig and recently spud its forty-fourth Woodford operated well. To date, the Company has drilled 43 gross operated horizontal wells and participated in 38 non-operated horizontal wells in the Woodford. The Company's total horizontal well count represents approximately 9% of all horizontal wells drilled in the trend.
In East Texas, the Company is currently completing its first non-operated horizontal Cotton Valley well (2,592 foot lateral) (WI-30%). The Company's second non-operated horizontal Cotton Valley well has been delayed due to the lack of availability of pumping services. The Company expects to spud the well during the first quarter of 2011. In addition, the Company has reached total depth on its non-operated vertical Travis Peak/Cotton Valley combination well (WI-26%) and expects to commence completion activities during the first quarter of 2011.
The Company initiated the following commodity hedging transaction during November 2010:
$4.00 - $4.87
After executing the above transaction, the Company has 3.6 Bcf of gas volumes hedged for 2011.
"We are excited to announce our initial Niobrara well results and are looking forward to developing and growing our position in this oil rich asset," said Charles T. Goodson, Chairman, Chief Executive Officer and President. "With 12-15 Niobrara wells planned for next year, our goal is to significantly impact our 2011 liquids production, while continuing to deliver our top-tier results in the Woodford trend."
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Arkoma Basin, East Texas, Wyoming, South Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest's common stock trades on the New York Stock Exchange under the ticker PQ.
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices and significantly depressed natural gas prices since the middle of 2008, the uncertain economic conditions in the United States and globally, the declines in the values of our properties that have resulted in and may in the future result in additional ceiling test write-downs, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, hurricanes and other natural disasters, including the impact of the oil spill in the Gulf of Mexico on our present and future operations, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements.
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SOURCE PetroQuest Energy, Inc.