We’ve heard grumblings for months about the Smackover Brown Dense and are now beginning to oil & gas companies discuss the play. Last week Southwestern Energy announced a 460,000 acre position in Southern Arkansas and Northern Louisiana. Leases to date average an 18% royalty, with a 4 year primary term, with options to extend for 4 years. The company has invested a total of $325 per acre to date. That includes both bonuses and other costs associated with leasing.
“Included in the approximately 835,000 net acres are 460,000 net acres where the company will begin testing a new unconventional horizontal oil play. Late in the third quarter, the company plans to spud its first test well targeting the Lower Smackover Brown Dense formation, an unconventional oil reservoir found in southern Arkansas and northern Louisiana. The formation, which ranges in vertical depths from 8,000 to 11,000 feet, appears to be laterally extensive over a large area ranging in thickness from 300 to 550 feet. The company’s investment in undeveloped acreage in the play area to date is approximately $150 million and its leases currently have an 82% average net revenue interest and an average primary lease term of 4 years with 4-year extensions.”
Read the full press release at SWN.com