Summary
Devon announced that the Kardell Gas Unit 1H flowed 30.7 million cubic feet/day on a 24 hour test. The well was drilled to 18,350 feet including a 4,500 foot lateral. The company plans to accelerate drilling on their 47,000 acres principally located in San Augustine and Sabine counties in Texas and Sabine Parish, Louisiana. Devon has drilled 8 horizontal wells in the Carthage area. Devon has identified 950 risked drilling locations at Carthage and plans to go to a five rig program next year..
Analysis
The high production rate of the Kardell Gas Unit 1H is a good indicator that shale gas wells in this area will be good economic producers even in the current low price range of $4.50-$5.00/million btu. Sucess in San Augustine County means that the western field limits have not yet been established. Devon previously announced that they were drilling a shale gas test in Shelby County to the north. If this well is a success, the overall prospects for the area will be greatly improved. The quality of the Karbell well suggests that San Augustine is in the Haynesville core area and that will encourage further exploration to the west. Nacogdoches and Angelina Counties could prove to be productive. Drilling for shale gas in several of the plays has improved marginally in the past few weeks indicating a partial return to confidence in those core areas where high rates of production can be obtained. Everything considered it is excellent news for Devon and pretty good news for the shale gas drillers in general.
