Mitchell Reserves 38% Higher in Six Months

Mitchell Energy & Development Corp. has added 580 Bcfe to its gas and oil reserves, and now is almost 2.1 Tcfe or 38% higher in reserves than at the beginning of this year. The largest single increase, 210 Bcfe, resulted from a successful step-out drilling in its largest development area, the North Texas Barnett Shale.

In the Barnett Shale alone, The Woodlands, TX-based company's gas production has averaged 203 MMcf/d in the first five months of 2001, a 70% increase over last year.

"The Newark East Barnett Shale is one of the five largest gas fields discovered in the continental U.S. during the past 20 years and is currently the fourth largest producing field in the state of Texas," said CEO George P. Mitchell. "We hold almost one-half of all the acreage in the area now being drilled and thus have maximum opportunity and incentive to continue to increase both overall reserves and production rate."

In the past few years, Mitchell and several other producers have drilled several wells outside the confirmed proven area, and as a result, the proven limits have expanded by more than 50%. The region now covers 120,000 net acres where Mitchell expects to drill 1,180 future wells with 55-acre development spacing. The program will be done over four years at its current rate. Since 1990, Mitchell has drilled 700 wells in the Barnett.

Mitchell's reserves now stand at 1.6 Tcfe, and it also has under lease another 110,000 contiguous acres where probable and possible reserves are estimated at 650 Bcfe.

The announcement comes a few weeks following rumors that Mitchell may be for sale. Initially, it put itself up for sale in late 1999, but successful drilling led to it removing itself from the auction block just a few months later (see NGI, April 10, 2000). However, last month, CEO Mitchell, 81, the founder of the company, indicated that several buyers had expressed interest (see NGI, May 14). He would not confirm or deny then that the company was actively soliciting offers.

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