Lyxor Msci China Esg Lea... (BIT:HK)
Historical Stock Chart

From Jun 2019 to Jun 2024

Petrohawk Energy Corp. (HK) said Tuesday that first-quarter production rose 14% from the previous quarter and 58% from a year earlier, and reported encouraging shale-gas drilling results.

The Houston natural gas and oil company said first-quarter output averaged 412 million cubic feet of gas equivalent a day. Petrohawk stuck by its forecast for a 40% rise in production this year over last, adding it expects second-quarter output to average between 420 million and 430 million cubic feet of gas equivalent a day.

The company, which specializes in drilling for gas in tight, shale-rock formations such as the Haynesville Shale in Texas and Louisiana, the Fayetteville Shale in Arkansas and the Eagle Ford Shale in South Texas, also stuck by its $1 billion capital budget for the year. Last October, Petrohawk cut its 2009 capital budget by a third to $1 billion, joining several other big gas producers like Chesapeake Energy Corp. (CHK) in reining back spending as gas prices plunged and credit markets dried up.

Gas for May delivery traded on the New York Mercantile Exchange was recently down 3.4 cents, or 0.9%, at $3.506 a million British thermal units, close to a six-and-a-half-year low. Gas futures prices have dropped by nearly three-fourths since July, as industrial demand has crumbled amid the recession, just as a flood of new U.S. supplies - especially from shale formations - entered the market.

Petrohawk said in a press release that the average initial production rate for the wells it operates in the Haynesville Shale - excluding two wells with mechanical failures - is around 18 million cubic feet of gas equivalent a day.

The company also said measurements taken from wells drilled in part of the Eagle Ford Shale indicate "this particular area is one of the highest quality shale reservoirs discovered to date in the United States." The company raised its ultimate recovery assumption for wells in the play to a midpoint of 5.5 billion cubic feet of gas equivalent per well.

"The economics of this play challenge the Haynesville and just about any other shale play," Petrohawk Chief Executive Floyd Wilson said at a conference in New York Tuesday.

The positive drilling results in the Haynesville and Eagle Ford Shales "illustrate the tremendous upside to production and reserves that the company has captured in its acreage position," Macquarie Research analyst Jason Gammel wrote in a note to clients.

Though the company is always looking for opportunities, Wilson told Dow Jones Newswires on the sidelines of the conference that Petrohawk wasn't interested in entering costly bidding wars for assets, with no new acreage acquisitions on the immediate horizon.

After falling earlier in the session, shares of Petrohawk were recently up 19 cents, or 0.93%, at $20.55 apiece.

-By Mark Long, Dow Jones Newswires; (201) 938-4427; mark.long@dowjones.com

(Christine Buurma contributed to this report.)