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Linn Energy Holds 2Q2010 Conference Call, Excited About TX and OK Granite Wash


On the heels of their 60.2 Mmcfe/d announcement, Linn Energy held their 2Q2010 Earnings Call.  One theme prevailed regarding the Granite Wash – excitement about the upside.  The Black 50-1H well (the one that tested 60.2 MMcfepd) was only their second horizontal test and they believe is a record for the area.  I haven’t heard of any well lately in the Eagle Ford, Woodford, or Haynesville reaching this level.

Below is an image from the supplemental presentation they gave.  It lays out their current operations.  The Cooprider 1-34H is the first test of horizontal Oklahoma Granite Wash for Linn.  It is in the Mayfield, Colony Granite Wash area.  They are hopeful for success in Mayfield as there have not been many vertical penetrations in the area and therefore formation pressure may be high.  If their Oklahoma acreage is successful, they said it could double their Granite Wash horizontal locations.

When asked what they did different with the Black well to get it up to a record 60.2 MMcfepd, they mentioned a lack of vertical penetrations in the area thus keeping the pressure high just as in the OK acreage.  They said their first two TX horizontal Granite Wash wells cost about $8MM, were fraced using 12 stages and were drilled in 36-38 days.  The breakout of NGLs in their TX wells is about 45% ethane, 25% propane, 5%-10% butane and isobutane, and the rest pentanes plus.

Below is a map of their current producing TX panhandle wells in the area.  These are all vertical with three qualifying as directional according to Drillinginfo.  They are colored by Field Name.

Linn is working on obtaining gathering and takeaway capacity but sees processing as a potential infrastructure and midstream bottleneck.  Midstream companies such as Enbridge and Eagle Rock are currently building new cryogenic plants in the area to provide more efficient gas processing options.

Check the DNA Granite Wash Unconventional Update for all things Granite Wash.

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Justin Birmingham

Justin Birmingham is a Research Analyst at Drillinginfo. He creates proprietary research studies, works with statistical models and manages datasets for the DI Analytics team. Justin earned his Bachelor of Science from Texas State University – San Marcos.