In January 2016, BTU Analytics took a look at Southwestern Energy’s latest efforts in the Moorefield Shale, which lies underneath the Fayetteville Shale in Central Arkansas. The finding at the time was the Moorefield wells were putting up initial production (IP) rates that were comparable, and in some cases, superior to Fayetteville shale well IP rates in the same area.
Since that time, Southwestern Energy (NYSE: SWN) has increasingly been promoting the potential of the Moorefield shale in earnings calls and investor relations material. In the Q1 2017 SWN earning conference call held at the end of April 2017, the Moorefield shale was a hot topic, with seven out of the 13 analysts asking questions about the Moorefield. “Moorefield Shale” was mentioned 19 times during the call. In addition, in the May 2017 SWN investor presentation, two slides were dedicated to the Moorefield as shown below in a slide highlighting Moorefield well performance.
While we are still in the early rounds of Moorefield activity, some results appear promising. As is typical in early stages of a prospective play, the industry has to glean information from the producers active in the new play while waiting for additional state level production data to be reported through various public agencies. This is exactly the case for the Moorefield, as SWN reports in their May 2017 presentation that since mid-2015, 13 Moorefield wells have been turned to sales, and a recent 7-well pad is showing further promise (as mentioned in the slide above). The type curve SWN shows indicates a 6,000 Mcf/d IP rate. When we look at average monthly IP rates in Arkansas where the Moorefield is designated as the target horizon, there are only 14 wells with data with an average IP rate of 4,000 Mcf/d. The majority of the Moorefield wells are located in White County, with 2 wells reported in Cleburne County, Arkansas. In 2015, we can see 9 wells of which 5 came in above the county average IP rates for all other horizons (including the Fayetteville shale) in White and Cleburne Counties; however, 4 wells came in below the county average IP rates, in the range of 2,000-3,000 Mcf/d. The most impressive Moorefield well in 2015 in White County came in at an IP rate of over 8,000 Mcf/d.
So while some promising results have been seen out of the Moorefield, the market will need to wait for further information about this play. Unfortunately, due to the commodity price correction that started in Q3 2014 and as shown below, activity in the Fayetteville shale has fallen off. SWN has indicated they will further delineate the Moorefield, however this may take some time.
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