Shale attracts number of companies to area

By Caroline Tyler

LITTLE ROCK — Selling, merging and partnering are not uncommon for companies in oil and gas production, said Larry Bengal, director of the Arkansas Oil and Gas Commission.

"It's the nature of the business," he said, but to drill, a company must request a permit and register its well. The following is a list of companies whose name is registered to a gas-producing well in the Fayetteville Shale play area and how many thousands per cubic feet (MCF) of gas it has sold from Jan. 1 to July 1 of this year (source: Arkansas Oil and Gas Commission).

Seeco Inc.

Total Wells: 569

MCF of Gas Sold: 67,553,853

New York Stock Exchange symbol: SWN

Seeco, Inc. is a subsidiary of Southwestern Energy Company headquartered in Houston.

According to its Web site, www.

swn.com, Southwestern was originally organized in 1929 as a local gas distribution company in Arkansas.

As of June 30, the company held approximately 857,000 net acres in the Fayetteville Shale play area, and as of July 1, it had 22 drilling rigs, 15 that drill horizontal wells and seven that are used for drilling the vertical sections.

Chesapeake Operating Inc.

Total Wells: 166

MCF of Gas Sold: 22,720,780

New York Stock Exchange symbol: CHK

According to its Web site www.

chk.com, Chesapeake Energy Corporation is the second-largest independent producer and third-largest overall producer of natural gas in the United States.

It was formed in 1989 with fewer than 10 employees and has grown to approximately 6,600 employees and an enterprise value of about $39.5 billion.

Forbes magazine named the corporation the Best Managed Oil and Gas Company in its Jan.

8, 2007, issue.

Petrohawk

Operating Company

Total Wells: 88

MCF of Gas Sold: 12,576,092

New York Stock Exchange Symbol: HK

Houston-based Petrohawk Energy Corporation has natural gas and oil properties in North Louisiana, Arkansas, East Texas, Oklahoma and the Permian Basin.

Vice President of Investor Relations Joan Dunlap said the company bought out KCS Energy, Inc.

in 2006. KCS owned 10,000 acres in the Fayetteville Shale area, and Petrohawk increased that number to 155,000 net acres.

In 2007, Petrohawk purchased Tulsa-based One TEC Operating and took control of its 30,000 to 40,000 acres.

Dunlap said Petrohawk is operating nine horizontal rigs and one spudder rig in the Fayetteville Shale, and it expects that number to increase to 10 rigs by the end of this year.

Last year, the company opened an office in Clinton that Dunlap calls "a beehive" and a focal point for businesses and services that Petrohawk uses in that area.

XTO Energy Inc.

Total Wells: 34

MCF of Gas Sold: 2,891,935

New York Stock Exchange symbol: XTO

XTO Energy began operations in the Arkoma Basin in 1999, according to its Web site, www.xtoenergy.com.

The company, based in Fort Worth, Texas, was named No. 24 of the 100 Fastest-Growing Companies in the September 2007 issue of Forbes magazine.

The company founder actively manages the company, and management owns more than six percent of its stock.

Hallwood Petroleum LLC

Total Wells: 11

MCF of Gas Sold: 1,342,770

American Stock Exchange symbol: HWG

Hallwood Energy, L.P. is involved in exploration and operation of oil and gas properties in central eastern Arkansas, south Louisiana and west Texas.

It is the energy affiliate of Dallas-based The Hallwood Group Incorporated.

According to its Web site, www.

hallwood.com, it holds leases of approximately 460,000 net acres in central eastern Arkansas, with the Fayetteville Shale being its primary objective formation.

Storm Cat Energy (USA) Operating Corporation

Total Wells: 6

MCF of Gas Sold: 165,827

American Stock Exchange symbol: SCU

Storm Cat Energy Corporation has producing properties in Wyoming and Arkansas and development acreage in Canada.

According to its Web site, www.stormcatenergy.com, the Denver-based company has about 18,500 net acres in the Fayetteville Shale play area.

Penn Virginia MC Energy, LLC

Total Wells: 4

MCF of Gas Sold: 170,681

NYSE: PVA

Penn Virginia MC Energy is an oil and gas branch of the Penn Virginia Corporation of Radnor, Penn.

It has operating areas in east Texas, the Appalachia area and the mid-continent region that includes Arkansas.

It is working with Seeco, Inc.

to operate its wells in the Fayetteville Shale play area.

Edge Petroleum Operating Company Inc.

Total Wells: 2

MCF of Gas Sold: 34,767

NASDAQ: EPEX

Edge Petroleum Corporation is a Houston-based company with about 4, 692 net acres in the Fayetteville and Moorefield Shale play areas.

The majority of its operations are focused onshore in the United States, primarily along the Gulf Coast and Permian Basin of Texas and New Mexico.

Lawco Exploration Inc.

Total Wells: 1

MCF of Gas Sold: 30,551

Lawco Exploration has operating and non-operating interests in multiple wells in the Fayetteville Shale, President Randy Lawson said.

Lawson founded the Bentonville company in 1985, and it has been working in the Arkoma Basin for 20 years.

Lawco, Inc. has more than 20,000 acres under lease in the Fayetteville Shale area, and Lawson said he is excited about the economic impact it is going to have on his state.

The company also has producing properties in Alabama, Kansas, Louisiana, Mississippi, Oklahoma and Texas.

Sedna Energy Inc.

Total Wells: 1

MCF of Gas Sold: 12,610

Fort Smith's Sedna Energy Inc. is a wholly owned subsidiary of Dernick Resources Inc. of Houston.

According to the private independent energy company's Web site, www.dernickres.com, Sedna owns an interest in more than 750 producing wells in the Arkoma Basin.

Yale Oil Association Inc.

Total Wells: 1

MCF of Gas Sold: 7,047

Greg Cox, the Yale Oil Association Inc.'s operations manager, said his company "just happened to have some acreage" in the Fayetteville Shale area when the bigger companies started moving in.

The Oklahoma City-based company traditionally does more conventional drilling, but it picked up some more acreage and partnered with Seeco, Inc. for its Fayetteville Shale operations.

Cox calls the company a "working interest owner," and he said the company is not actively buying more acreage.

Three Rivers, Pages 58 on 10/02/2008