PetroQuest Energy Inc.’s first multi-well pad in the Cotton Valley formation, trending above the Haynesville Shale, reached a cumulative rate of 27,697 Mcf/d of natural gas, 1,678 b/d of natural gas liquids and 67 b/d of oil in its initial 24-hour gross rate, the producer said.
The three-well pad for PQ wells Nos. 23, 24 and 25 had average lateral lengths of 5,291 feet, with an estimated drill/complete cost of $860/lateral foot. PQ Nos. 23 and 25 were completed in the E-berry bench of the Cotton Valley while No. 24 represented the company's first horizontal test of the E bench.
"One of our stated goals for 2017 was to double daily production from approximately 50 MMcfe in December 2016 to approximately 100 MMcfe by the end of 2017," said CEO Charles T. Goodson. "With the operational success, continuous improvement and production growth we have had to date, we are making great progress toward this goal, which should ultimately benefit our relative leverage.”
PetroQuest holds around 28,000 net acres prospective to the Cotton Valley, which includes acreage where it holds either a 50% (45,600 gross acres) or a 100% (6,400 gross acres) working interest.
While drilling the horizontal section of PQ No. 24, PetroQuest said it experienced mechanical issues associated with the directional drilling tools, which resulted in about 50% of the well being drilled out of the productive section of the E bench. However, “considering the mechanical issues encountered, the company is encouraged by the early results and the initial rate achieved…”
The Lafayette, LA-based independent varied proppant concentrations for the wells to provide comparative data in evaluating the relationship between fracture (frack) size and resource recoveries.
“While it is early in the life of the wells, the company believes that larger fracks should enhance already strong returns,” management said. “PQ No. 25 utilized the largest volume of proppant per lateral foot of any of the company's Cotton Valley wells and also has the highest initial production rate.”
PetroQuest also is evaluating the results of the microseismic work performed in connection with completing the wells to quantify frack heights and proppant concentrations. Using updated information, management plans to optimize its completion design in the next generation of Cotton Valley wells.
PetroQuest has drilled and completed five gross wells in connection with its 2017 Cotton Valley drilling program and is on track to drill and complete four more this year, with three gross wells expected to be in progress at year’s end.
The company has reached total depth on a two-well pad, PQ Nos. 26 and 27, to test the E-berry bench in the northern area of the Cotton Valley joint venture acreage and expects to begin completion operations in about three weeks. The two wells pad have an average lateral length of 6,600 feet.
Drilling operations also have begun on PQ No. 28, planned as a 4,700-foot lateral to develop the E-4 bench.
“The E-4 bench has delivered three of the company's top five Cotton Valley wells in terms of reserve recovery per lateral foot,” management noted.
Because of better-than-expected production from its existing wells and performance from the latest three-well pad, PetroQuest has increased its second and third quarter production guidance. For the second quarter, output now is expected to be 68-69 MMcfe/d from 62-65 MMcfe/d. For the third quarter, output is forecast to be 85-90 MMcfe/d from 80-84 MMcfe/d.
PetroQuest has about 6 MMcfe/d net production shut-in because of ongoing repairs to a third party pipeline in the Gulf of Mexico. The revised third quarter guidance assumes production will be restored by Aug. 1.