Leaseholder

Southwestern Energy Co., the largest leaseholder in the Fayetteville Shale, reported record production of 45.1 Bcfe in 2Q2008, which was 74% higher than in the same period a year ago when the company produced 25.8 Bcfe. Natural gas production in the Arkansas play alone reached 29.6 Bcf, up from 10.7 Bcf in 2Q2007 and ahead of the 23.6 Bcf reported in the first three months of this year.

Building natural gas reserves in the Fayetteville Shale appears to be high on the wish lists for two Houston-based producers. Leading leaseholder Southwestern Energy Co. said it will spend $1 billion in the coming year to expand its growing gas production in the Arkansas play, and up-and-comer Petrohawk Energy Corp. has added to its stake in the region.

Pennaco Energy, the largest leaseholder and most active operatorin the Powder River Basin in Wyoming and southeastern Montana,reported that its gross gas production out of the basin has reached46.1 MMcf/d and is expected to increase rapidly now that newpipeline infrastructure is in place. This promising coal-bedmethane play, which took the national spotlight last year, isexpected to be one of the fastest growing areas in the RockyMountain region over the next decade.