16
Nov

HK November Presentation Notes

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HK speaks at the Merrill Lynch Energy Conference on Wedneday.

They put out a new presentation with a few interesting tidbits on Monday, November 16th.

HK November Presentation Notes

  • No new well results listed.
  • Presentation shows reserve potential of 31.6 Tcfe, (up from an estimate of 26.5 Tcfe in early September).

    • Haynesville is about half of that (15.7 Tcfe)
    • Eagle Ford (8.9 Tcfe)
    • Lower Bossier (4.1 Tcfe) where they have yet to drill a well but will in 1Q10
    • Year end 2008: Proved reserves of 1.4 Tcfe
    • Year end 2009 is likely to be at least 2.5 Tcfe
    • Meaning potential reserves are > 12 times 2009E proved reserves

 

  • Haynesville Shale:

    • Acreage still at 345,000 net acres
    • Gross production went:

      • From 450 MMcfepd gross as of November 4th.
      • To > 500 MMcfepd gross as of November 16th.
      • This is how you set out volume guidance and then beat it.
  • “Red Hawk” Oil Play Announced

    • Fairly shallow, Eagle Ford Oil Shale Play, thinking thickness of 80 to 120 feet
    • Northwest of their current Eagle Ford activity, 89,000 net acres in Zavala County, Tx (due north of tests in the E.F.S. by (APC) and (TXCOq)
    • First well spuds December 2009.
    • $4 mm spent so far to data so the land has come at a cheap, cheap $45 per acre.
  • Hedges:

    • 2010: 60% of expected volumes with an average price of $5.93.
  • Budget:

    • Same as on the 3Q call. No escalation should be viewed favorably.

Nutshell: Most analysts should like the idea of gassy Petrohawk getting a touch more oiled up.  The market has with (EOG) and everyone else over the last two quarters from (BEXP) to (NFX) who has made the push to get more liquids rich. This is certainly early stage but the market should give the stock some option value on it, especially in light of the post 3Q release sell off, and due to the fact that HK has been a first mover in two of the most recently announced gas shale plays.

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