For Mitchell Energy & Development Corp., the news, it seems,just gets better and better. The Houston-based independent, whichless than a year ago had seriously considered selling its assets,reported last week that it has raised its year-end estimates ofproved natural gas reserves by 45% to 1,467 Bcf, and proved naturalgas liquids by 18% to 210 MM barrels.

Basing its success on aggressive field exploitation programs,total estimated proved reserves now stand at all time recordlevels. Most of the reserve additions resulted mostly from”better-than-expected” results in the company’s largest field, theNewark East Barnett shale in North Texas.

Step-out drilling, using light sand fracture completiontechnology, extended the limits of the original “core” Barnettdevelopment area, said the company, and the success, which iscompleted with improved reserve recovery from recompletion andrefracturing programs, pushed up the company’s assessment forBarnett’s ultimate potential.

The independent oil and gas company has used hydraulicfracturing to improve production in tight sand and aging wells foralmost 20 years. Now the company has turned to light sandfracturing, or “waterfracs,” which uses large volumes of water andabout 100,000 pounds of sand. It reduces total well costs by about20%, expanding the field limits and reducing development costs.

“We now have some 650 proved undeveloped locations in theBarnett,” said CEO George P. Mitchell. “Drilling 140 of theseannually will enable us to increase total company gas production bymore than 15% this year and next.”

Equally important, he said, is that the company has identifiedanother 1,400 “probable” or “possible” Barnett locations on thepresent well spacing. Mitchell called the undrilled reserve base”extraordinarily large” and said it would give the company a”low-risk volume growth profile for years to come.”

But that’s not all. Mitchell said there is the potential to addanother 2,000 locations by infill drilling the existing wellspacing at the Newark East field, located about 40 miles north ofFort Worth. Three pilot programs are under way to test the closerspacing viability, and he said the early results were encouraging.However, decisions on possible infill development won’t be madebefore 2001.

Another program, which would expand the Bridgeport gasprocessing plant by 50%, remains on target for completion by earlyDecember. That additional capacity will be used to processBarnett’s growing production. The Bridgeport inlet capacity will beincreased by 100 MMcf/d, adding 8,000 bbl/d to the plant’s naturalgas liquids extraction capabilities.

Carolyn Davis, Houston

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