Thursday, November 3, 2011

Swift Discusses The Austin Chalk On Earnings Call

Swift Energy's Earnings Conference Call: Austin Chalk highlights:
"In Central Louisiana and East Texas, we’re utilizing new technology to transform a mature asset base to a growth area. Our large partnership area with Anadarko in the Burr Ferry area of Vernon Parish provides ample running room for a multi-year drilling program targeting the Austin Chalk. We’re also reevaluating the Austin Chalk and our Masters Creek field to further assess further development opportunities there. The non-operated well, the GASRS 16-1 was completed in the Austin Chalk and had an initial production rate of 207 barrels of oil per day and 1.3 million cubic feet of gas per day. This production rate is significantly lower than the first two wells drilled in the area. This well was an appraisal well and was drilled near the southern extend of the company’s joint operating area where it did encounter fewer natural fractures while drilling than what we see in the wells drilled further to the north. This well will be an extremely important well for us in further understanding the geology in the area and will assist us in designing the most effective development plan for this Burr Ferry area.  The Swift Energy operated GASRS 20-1concluded drilling operations during the third quarter and has been completed. A mechanical problem occurred during the initial cleanup of the well that required a work over rig to resolve. A work over rig is currently on this well and work is under way to remedy the issue. This well bore remained in zone for the entirety of the 4254 foot lateral and encountered high natural fracture density in the formation along the strong tubing pressure. GASRS 20-1 well was drilled further north than the non-operated GASRS 16-1, and we believe it will be a highly productive well once we have resolved the mechanical issue."

Q&A
"Marcus Talbert – Canaccord Genuity
Okay, great, thanks. I guess looking at the most recent Austin Chalk wells, is there anything that you can point to I guess outside of the fewer natural fractures that you encountered on the 16-1 well that led to the result that we got?
Bob Banks
We have got a couple of working theories about what caused the lower fracturation in that well bore down to the south. One would be, we are getting much further away from the Sligo shelf margin where you have more tectonic activity. The other theory would be that it’s flattened out a little bit down there. The depths aren’t the same, it’s a little flatter area and there is less faulting in that area. So that could have also contributed to the less fracturation. So, those are the things the guys are working on now to try to understand down in that southern extend, what's controlling the fracturation down there.
Marcus Talbert – Canaccord Genuity
Okay, great, thanks. And I guess just looking at that southern extend on the map that you have here. Was the 16-1 offset to the 18-1 well or was that further south and east even further south of the (inaudible).
Bob Banks
Yeah, further south, further south. Yeah, it’s kind of right down at the end of the line down there.
Marcus Talbert – Canaccord Genuity
So it’s the very most southern well that you drilled to-date there in the Burr Ferry?
Bob Banks
Yeah, that’s right.
Marcus Talbert – Canaccord Genuity
Oh, yeah, that’s correct."

Source: Seeking Alpha

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