ARKANSAS GAS

Energy boom comes to Arkansas; Locals and corporations rush to stake claims in Fayetteville Shale
March 4, 207 (AP via Dallas Morning News)
- Thousands of feet below Arkansas hay fields and cow pastures, a newly tapped reservoir of natural gas is quietly giving up its bounty.
- After 300 million years trapped in hard, black shale, gas now flows into pipelines headed for market…

- In the flicker of five years, the Fayetteville Shale has gone from "just sort of a geologic oddity" to a significant industrial development…
- Investors, so far, are satisfied with early production and a university study says the newly tapped energy source could have a $5.5 billion impact on Arkansas by the end of 2008…
- …business at the county courthouse, where mineral rights transactions are recorded, had been so brisk that clerks had to bring in extra tables…
- Leases cover 4,000 square miles across north-central Arkansas, an area just smaller than the 5,000-square-mile Barnett Shale field in northern Texas, which produced 1.2 billion cubic feet of gas per day last year.

- A gas transmission company plans a pipeline across Arkansas that would carry 1.1 billion cubic feet daily…
Houston-based Southwestern Energy Co…and its Arkansas subsidiary, SEECO Inc., discovered that [the Fayetteville Shale] held commercial potential like the Barnett…[and]…was willing to place a bet – up to $700 million by the end of last year and another $900 million in 2007 – that new "frac treatment" technology used in the Barnett could also be used here…
- As SEECO drilled in the tighter Wedington sandstones of the Arkoma Basin, the company came across some unexpected findings. After analyzing data from 21 wells, Thaeler and his team couldn't explain the numbers…At a brainstorming session at SEECO's Fayetteville offices, the lights went on…the gas in the 30-50 foot thick sandstone could be coming from the surrounding Fayetteville Shale…[potentially] another Barnett…
- In the fall of 2004…[At] a well in Jerusalem, 72 miles northwest of Little Rock…The rock was fractured and the gas was released…
- Meanwhile, the much larger Chesapeake Energy Corp., based in Oklahoma City, plans to drill 50-75 wells in 2007…Schlumberger, a world leader in servicing oil and gas companies, is building a 31,000-square-foot facility…

- According to the Arkansas Oil and Gas Commission, mineral rights owners could receive as much as $3,750 a month in royalties in the first year of production on 160 acres. Also, a University of Arkansas study, partially funded by Southwestern Energy, predicts the shale play from 2005-2008 will mean an additional 9,683 jobs in Arkansas and $358 million in taxes for state and local governments. The $5.5 billion impact by the end of next year, forecast by the study, includes total labor income, property income, state and local taxes, and the purchase of goods and services…
- Production throughout the play will have to be good. And new costly transmission lines will have to be built in time…
- Southwestern says it may drill as many as 8,000 wells.
- Other companies in the shale play…Chesapeake Energy…Hallwood Energy…Maverick Oil & Gas…Shell Exploration & Production Co…
- By the end of 2006, about 180 wells were completed in the Fayetteville Shale…