With 2010 drawing to a close, Petrohawk Energy Corp. is working to put a bow on its Haynesville Shale leasehold so it can focus more attention on the natural gas liquids- (NGL) and condensate-rich Eagle Ford Shale in South Texas, company executives told financial analysts Tuesday.

“With core positions in both the Haynesville Shale and Eagle Ford Shale, we are weighing current capital expenditures against available liquidity and keeping our focus on strategies geared toward creating long-term value. We believe that our positions in these important plays would be impossible to replicate,” said Petrohawk CEO Floyd C. Wilson.

“We project that Petrohawk will be the first large operator in the Haynesville Shale to meet its leasehold capture goals, in mid-2011, and the first to have significant and meaningful flexibility to rebalance the program at that time. Despite weak gas prices, our lease-capture drilling activity in the Haynesville Shale is generating significant value by adding low-cost proved reserves and setting the stage for decades of low-risk development activity.”

Petrohawk’s average production of 685 MMcfe/d during the third quarter included 434 MMcfe/d from the Haynesville Shale and 67 MMcfe/d from the Eagle Ford Shale. An additional 95 MMcfe/d was produced from the Fayetteville Shale, and 89 MMcfe/d was produced from other areas, including 15 MMcfe/d from miscellaneous Midcontinent properties that were divested at the end of the quarter.

During the third quarter Petrohawk drilled 281 gross wells, of which 50 were operated, with a 100% success rate. Of these, 102 were in the Haynesville Shale, 21 in the Eagle Ford Shale, and 149 in the Fayetteville Shale (primarily nonoperated).

Petrohawk’s average realized natural gas price for the quarter was $5.19/Mcf, which included a realized gain from derivatives of 99 cents/Mcf. The average realized price for gas before derivative gains was $4.20/Mcf, a 34% increase compared to the third quarter of 2009 and 96% of the average New York Mercantile Exchange price for the quarter of $4.38/Mcf.

Petrohawk began the third quarter with 16 operated rigs running in the Haynesville and is currently running 12 operated rigs, a level it expects to maintain through the end of this year. Twenty-nine operated wells and 73 nonoperated wells were drilled during the third quarter. Drilling costs continue to trend down due to increased drilling efficiencies, the company said; however, completion costs are trending higher due to inflation in pressure pumping services.

In the Eagle Ford Shale Petrohawk operated three rigs in the Hawkville Field and five rigs in the Black Hawk during the third quarter, during which 19 operated wells and two nonoperated wells were drilled. The total number of Petrohawk-operated wells drilled in the Eagle Ford to date is 75, with 52 in the Hawkville Field, 21 in the Black Hawk and two in the Red Hawk.

The company’s $1.9 billion drilling and completion budget for 2011 emphasizes a shift in capital spending based on market conditions, opportunities to accelerate certain areas of the company’s Eagle Ford Shale position, and the desire to reduce capital allocated to pure natural gas drilling once the Haynesville Shale lease capture period is effectively completed in mid-year 2011, Petrohawk said.

“Currently our Eagle Ford Shale production is less than a sixth of the amount we produce in the Haynesville Shale. It is important that we take the necessary steps today to accelerate the condensate-rich opportunities in the Eagle Ford Shale,” Wilson said. “As we decelerate our activity in the Haynesville Shale in mid 2011, the Eagle Ford is poised to live up to its full potential within our portfolio.”

Capital allocated to the Eagle Ford in 2011 is approximately two and a half times the amount budgeted in 2010. Year-over-year production from the Eagle Ford is expected to increase nearly threefold from approximately 67 MMcfe/d to approximately 175 MMcfe/d, of which half is expected to be condensate and natural gas liquids, the company said. Capital allocated to the Haynesville Shale is expected to decrease by approximately 35% from 2010 levels, but it should still generate approximately 45% year-over-year growth, according to Petrohawk. The combined result of the 2011 capital program is expected to generate year-over-year production growth of approximately 30-40%.