Petrohawk Energy Corp. on Tuesday announced it has conducted successful tests using a new flow-channel fracturing technique called HiWAY, created by Houston-based Schlumberger Ltd. The producer said 10-12 test wells in the Hawkville Field area of the Eagle Ford Shale play yielded increased production, which will lead to expanded use of the technology.

The Houston-based independent is mainly active in the Haynesville Shale play in North Louisiana and Eagle Ford Shale in South Texas.

The company began performing HiWAY tests in October. The technique — which combines fit-for-purpose fracture modeling, fracturing fluids and high-frequency proppant pulsations — creates flow channels within the fracture network and is claimed to increase the overall stimulated reservoir volume and permeability.

At four of the test wells, HiWAY yielded a 37% increase in average production in areas with gas and natural gas liquids (NGL), and an average of about 32% in high-condensate yield areas. Petrohawk also reported, based on internal estimates, that estimated ultimate recovery figures from the limited trial would be 25-90% higher compared to offsetting wells completed with conventional fracturing techniques.

“This is a breakthrough development that should add tremendous value to what we do today and in the future,” CEO Floyd Wilson said.

Wilson said the company planned to use HiWAY throughout the Eagle Ford Shale but would not deploy the technology in other shale plays for now.

“There are limitations [to where the] Schlumberger material can be used,” Wilson said. “We’re going to use it throughout the Eagle Ford, including Black Hawk. I think other plays are sort of [to be determined].”

Petrohawk posted a net loss of $79.6 million (minus 26 cents/diluted share) for 4Q2010, compared with net income of $36.5 million (12 cents) for 4Q2010. The loss was attributed to future derivative contracts, discontinued operations resulting from the write-down of Fayetteville Shale midstream assets and various noncash charges and deferred income tax adjustments.

However, revenues were higher year/year. The company generated revenues of $402 million for 4Q2010 and $1.6 billion for all of 2010. By comparison, it generated $354.9 million in revenues during 4Q2009 and more than $1 billion for 2009. Cash flow from operations before changes in working capital was $211.3 million (70 cents/share) for 4Q2010 and $745.9 million ($2.47) for all of 2010.

“Petrohawk is positioned well for outstanding performance in 2011 and 2012,” said Wilson. “Our year-end results reflect a cleaner, more concentrated and higher-performing company than at any other time in our history. We generated strong cash flows in 2010, and looking ahead, we expect our premium assets will offer years of economic project inventory to fuel future growth.”

The company produced an average of 562 MMcfe/d during 2010, pro forma for approximately 113 MMcfe/d divested during the year. Total reported production for 4Q2010 was 70.1 Bcfe, which includes 65.1 Bcf of natural gas and 820,000 bbl of oil and natural gas liquids. Petrohawk posted a 136% increase in oil and natural gas liquid production over 4Q2009, when it produced 348,000 bbl.

Petrohawk charted 50% pro forma year-over-year reserves growth last year, ending 2010 with 3.4 Tcfe of estimated proved reserves, the company recently said (see NGI, Feb. 7). Shale plays led the charge, particularly with a 100% increase in production from the Haynesville and Bossier shales and a whopping 235% increase in the Eagle Ford in South Texas.

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