Petrohawk Energy reported 1.062 Tcfe of proved reserves as of December 31, 2007, adding a record 326 Bcfe through drilling. After adjusting for 2007 property sales, proved reserves grew by 22% year over year. Organic finding and development costs, exclusive of acquisitions, were $2.38 per Mcfe. Including the cost of acreage purchased as part of the Company's expansion in the Fayetteville Shale, all-in finding and development costs were $3.51 per Mcfe.
The pre-tax present value of estimated future net revenues from these proved reserves discounted at 10% and computed in accordance with SEC guidelines totaled approximately $2.56 billion.
Petrohawk's estimated proved reserves at December 31, 2007 were prepared by the independent reserve engineering firm Netherland, Sewell & Associates, Inc., in accordance with SEC guidelines. Reserves were computed using unescalated year-end 2007 prices of $6.80 per MMbtu of natural gas and $92.50 per barrel of oil, with adjustments for quality and basis differentials.
Total proved reserves of 1.062 Tcfe consist of 955 Bcf of natural gas and natural gas liquids and 17.7 million barrels of oil. The estimated proved reserves are 90% natural gas and are 57% proved developed. On a regional basis, 69% of Petrohawk's estimated proved reserves are located in its core drilling area, primarily comprising tight-gas targets in North Louisiana and the Fayetteville Shale. Non-acquisition related oil and gas capital expenditures (unaudited) for the year totaled $775 million.
"2007 was a year of strong growth and improvements for Petrohawk, divesting our Gulf Coast division which comprised more than 20% of our proved reserves, and redeploying the proceeds in acquisitions of acreage and producing properties in each of our major fields," said Floyd C. Wilson, Chairman, President and Chief Executive Officer. "In our Fayetteville Shale position we opened up never-before-drilled expanses to future development and growth. In Elm Grove Field we completed what is believed to be one of the largest Cotton Valley wells on record, and at Terryville Field we have scheduled additional 3D seismic to follow up on our outstanding results and new zone discoveries there.
"We intend to unlock substantial value by executing a multi-year plan to develop our concentrated positions, much of it acreage we have only just begun to tap, in our lower-cost, lower-risk natural gas plays. Our plan offers the potential for double-digit reserve growth coupled with continued operating efficiencies for years to come."
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