Moving to Mississippi in the Tuscaloosa Marine Shale, well performance continues to improve driven by longer lateral length and enhanced completion designs, one that we’re calling TMS-90 which means we are pumping over 90,000 pounds of sand per cluster and four clusters per stage. Our next step is to utilize even larger completions, while we are calling it TMS-150 or 150,000 pounds of sand per cluster, to improve well performance further.
We are budgeting our wells at approximately $15 million in 2013, and we expect to be able to further reduce these costs as we move to larger scale operations. Goodrich Petroleum’s recent well across the 12H-1, which we have a 25% working interest in, was completed using the TMS-90 design. This well directly offsets our acreage and extends prospective, approximately 15 miles west from Encana’s Jackson 4 H-2 well.
Across the well, we delivered initial rate higher than 1,100 barrels of oil equivalent per day, which is encouraging in line with some of our best results. This asset has great potential for Encana, ideally situated to receive Louisiana light sweet crude pricing. We feel that we are very close to achieving commerciality on this play.
As with Tuscaloosa Marine Shale, our strategy is to improve commerciality to increase completion intensity practices, as well as continuing reducing costs as we learn operational capabilities.
I’m very excited also about TMS as I mentioned in my comments, but other players are being evaluated from the Eaglebine that I mentioned, the San Juan basin which I intend to give a full overview in the next quarterly results. In Michigan we are currently drilling and completing and bringing on four wells, where we will have a clear decision point for the future of that basin.
On the liquids growth front, that will be – seen good results to-date. We have the point that Jeff could have mentioned at some of this place and the same thing applies in Canada, we’ve managed to capture very large resources in place. I would like to use analogy, some of them the TMS may be you can use in oil sands equivalent type analogy. So a lot of resource has been captured. Now the challenge to the teams is to drive down the costs of the wells and through the productivity. So we have the resource, now we just have to execute in our part. Some of the plays success maybe measured in May or June when we look at those whole programs both in the United States and Canada, some may take two years but importantly we do have significant resource capture. Does that answer your question, George?
Matthew Portillo - Tudor, Pickering, Holt & Co.
Okay. And then just shifting gears quickly to the TMS, we’ve seen some I think encouraging initial results from an IP perspective. I’m just curious, it sounds like you are pretty bullish on the prospectivity, but the capital commitment here is fairly low. You are running one rig and so just trying to get a little more color on how you guys are thinking about the commerciality of the play at this point, what you need to see from a IP or EUR perspective and ultimately where you think you need to see well cost come down to before you can get more aggressive on acceleration?
Clayton H. Woitas - Interim President and Chief Executive Officer
Sure. We are seeing – one of the things that we’ve accomplished in the last year is a fairly thorough appraisal of our 300,000 acre plus during the 50,000 acre TMS position. So as Clayton said, we have defined the resource prospectivity across our land base and we feel that we are ideally situated in a play and kind of the northern central component which is shallower and thicker and having the higher oil deposit. So as more information comes forward, we’re feeling highly comfortable around the resource potential that we’ve captured in this play.
The focus over the next 5.5 wells I’ll call it is really to look at how can we increase completion intensity and therefore drive EURs. In 2012, we spend a great deal of time looking at improving our drilling performance. I think we have a line of sites drilling wells in 30 days down from 60 days. We're not doing that on a consistent basis yet, but we've made great progress relative to avoiding highly fractured zone, the fracture zone is good, because it potentially could have enhanced processing creditability, it’s also bad if you lose circulation when we're drilling. But we've been able to avoid that I guess drilling hazard here recently, but ideally we are really targeting 750,000 barrel a day EUR type wells or higher with the new completion technology and long-term cost in that $12 million to $13 million range.
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