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Haynesville Deals Keep Coming

Three of North America's natural gas producers -- EnCana Corp., Goodrich Petroleum Corp. and El Paso Corp. -- last week disclosed three separate transactions that will build their companies' portfolios in the emerging Haynesville Shale.

EnCana Corp., which has been developing a huge leasehold across East Texas and Louisiana, agreed to pay $457 million in cash to closely held Indigo Minerals LLC for 89,000 acres in the region. The transaction includes 242 wells in the Haynesville play, as well as the Deep Bossier in East Texas. Production volumes were not disclosed. Earlier this month Jeff Wojahn, president of EnCana's USA division, said EnCana had a "couple of wells over 5 MMcf/d" that now are being tested in the Haynesville play (see NGI, June 23a).

Houston-based Indigo, which was formed in October 2006, is backed by New York-based buyout firm Yorktown Partners and family-owned Roy O. Martin Lumber and Martin Timber companies of Alexandria, LA. Indigo also receives funding form Bank of America Corp. Indigo said it would still own 22,000 leasehold acres in Louisiana and East Texas once the EnCana transaction closes, which is expected by the end of July.

Goodrich agreed to pay $3.325 million to an undisclosed company to acquire a 50% nonoperated interest in 5,800 gross acres (2,900 net) in the Central Pine Island field, which is adjacent to its Longwood field holdings in Caddo Parish, LA. With the completion of the private transaction and a joint venture with Chesapeake Energy Corp. announced earlier this month (see NGI, June 23b), Goodrich would have a leasehold of about 22,000 net acres in northern Louisiana. Goodrich participated in an initial well on the latest acquired acreage and said it expected to reach a total depth through the Haynesville Shale on the Hall 5 No. 1 well by the end of the month.

Initial well results from the Longwood prospect are expected within 60 days, and "in East Texas, we are extremely encouraged by the results of our initial vertical Haynesville Shale wells at Minden and Beckville," said Goodrich COO Robert Turnham. "The two initial Haynesville Shale wells in East Texas are located a little more than six miles from each other and provide meaningful data points as to the prospectivity of the play over our acreage block in Panola and Rusk counties. Our current plans include the drilling of several additional vertical tests to be followed by our initial horizontal development on our East Texas block by the end of the year."

Also making its presence known in the Haynesville Shale is El Paso, which last week disclosed that it has raised its exploration leasehold there to 42,000 net acres from 27,000. Details were not disclosed.

However, El Paso has held acreage in the region since 1999, and last year it increased its portfolio size in the area with the $879 million purchase of Peoples Energy Production Co. (see NGI, Aug. 20, 2007).

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