Houston-based Goodrich Petroleum Corp., which drills for natural gas almost exclusively in the promising Cotton Valley Trend of East Texas and Northwest Louisiana, on Monday clinched its second exploration deal in the region in less than two weeks.
The latest agreement expands Goodrich's gross Cotton Valley acreage position by 11%, to 160,000 gross (103,000 net) acres. If Goodrich pursues vertical wells in the play, the acreage position could "add up to 400 additional vertical well locations on 40-acre spacing," said President Robert C. Turnham Jr. As of July 1, Goodrich had drilled 115 wells in its Cotton Valley holdings, with 100% success.
Under the terms of the definitive farm-out agreement with an undisclosed party, Goodrich may explore for natural gas and oil, at no upfront costs, in the Alabama Bend field of Bienville Parish, LA. The agreement covers 16,000 acres in 33 sections (21,000 gross acres). The Alabama Bend field is located eight miles southeast of Goodrich's Elm Grove field and 15 miles east of its Bethany-Longstreet field in northwest Louisiana. The Cotton Valley is the primary objective, but there is additional potential in the Hosston and Bossier trends, Goodrich said.
Goodrich will hold a 75% net revenue interest on its drilling program, and it will own a 100% interest in each initial well drilled in all 33 sections. It also will have the right to participate for up to 50% on subsequent wells drilled in each section. To maintain its drilling rights, Goodrich has to drill one well every 90 days from the completion date of the previous well.
No immediate drilling plans were unveiled for the Alabama Bend field. Turnham said Goodrich would remain focused on developing its existing acreage, "but will continue to add to our drilling inventory when opportunities arise."
Last week, Goodrich purchased the remaining 14.5% working interest in 22 wells and 500 net (3,300 gross) acres in its Dirgin-Beckville field in the Cotton Valley for $6.12 million. The seller was not disclosed. The purchase, which is expected to close by the end of the year, has an effective date of Nov. 1. Goodrich owns the remaining 85.5% working interest. Goodrich's current internal estimate of reserves net to the interest in the Dirgin-Beckville play, based on 40-acre spacing for vertical wells only, is 5.7 Bcfe of proved (61% undeveloped) and another 5.0 Bcfe of probable reserves. Net production volumes are estimated at 750 Mcfe/d.
Goodrich had been drilling vertical wells exclusively in the Cotton Valley, but it recently scored two horizontal drilling permits, and it expects to drill its first by the end of the year. Horizontal wells cost more, but they also produce more gas. The decision to pursue horizontal drilling in the trend follows success to date in the play by well-funded independents that include Devon Energy Corp. and XTO Energy Inc.
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