LAFAYETTE, La., Dec. 20, 2017 (GLOBE NEWSWIRE) — PetroQuest Energy, Inc. (NYSE:PQ) announced today its entry into an oil focused play in central Louisiana targeting the Austin Chalk formation through the execution of agreements to acquire interests in approximately 24,600 gross acres. The leasehold acquisition costs were funded by $8.75 million in proceeds from the sale of certain of the Company’s water disposal assets in East Texas, approximately $6 million of cash on hand and the issuance of 2 million shares of the Company’s common stock. The Company plans to drill its initial horizontal test well during the second quarter of 2018 utilizing data from existing vertical and unfracked horizontal wells in the area and from fracked horizontal wells that are expected to be drilled in the area.
Through geologic and reservoir studies and analysis of results comparing fracked and unfracked horizontal Austin Chalk wells in both Texas and now in central Louisiana, the Company believes that applying modern hydraulic fracturing methods to this formation provides the opportunity to achieve a substantial uplift in recoveries versus vintage unfracked horizontal wells. Based on a comparative analysis between 22 fracked and hundreds of unfracked Austin Chalk wells drilled in Karnes County, Texas, fracked horizontal wells achieved an approximate 500% increase in resource recoveries as compared to unfracked horizontal wells. The average per well recovery for these fracked wells was in excess of 600,000 barrels of oil equivalent.
This acreage position is expected to provide PetroQuest the opportunity to utilize its expertise gained from operating and/or participating in over 600 horizontal wells in multiple resource projects. Since selling its Woodford shale assets in 2015, the Company has shifted its focus to a horizontal Cotton Valley program in East Texas that is estimated to have over 800 horizontal locations. The emerging Austin Chalk play is expected to complement the Company’s growing East Texas operations, and could serve as the catalyst to achieve a balanced commodity mix over the ensuing years through a project that is expected to offer years of inventory.
“We are excited to have an early, first mover position in this emerging oil play right in our backyard at a very attractive cost,” said Charles T. Goodson, Chairman, Chief Executive Officer and President. “Based on recent well results in the area of our acreage, as well as in South Texas, the application of contemporary horizontal drilling and fracking is showing a material impact on resource recovery from the Austin Chalk formation, which has produced over 1.3 billion barrels of oil since 1902. Our acreage position is expected to provide us with a capital allocation option to grow our oil production, which should complement our gas-weighted Cotton Valley assets in terms of diversifying our future production mix and cash flow. These assets are ideally located with available takeaway options close to the gulf coast refineries and rapidly expanding options for NGLs and associated natural gas that fit with our strategy to focus on assets near these key markets.”
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Texas, Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest’s common stock trades on the New York Stock Exchange under the ticker PQ.