IPAAAustin, Texas
October 28, 2004HALLWOOD PETROLEUM, LLC
IPAAAustin, Texas
October 28, 2004HALLWOOD PETROLEUM, LLC
•Barnett Shale gas is an unconventional resource
•Johnson County has long been known to have Barnett Shale
•This Barnett Shale was known to contain gas
•Missing Viola and Forestburg frac barriers
•Six wells targeted the Barnett Shale
•Yielding two marginal producers and a few shut in wells
•Barnett Shale gas is an unconventional resource
•Johnson County has long been known to have Barnett Shale
•This Barnett Shale was known to contain gas
•Missing Viola and Forestburg frac barriers
•Six wells targeted the Barnett Shale
•Yielding two marginal producers and a few shut in wells
JOHNSON COUNTY, TEXAS Unconventional Barnett Shale
JOHNSON COUNTY, TEXAS Unconventional Barnett Shale
•Produce gas without Ellenburger water
•Cut costs
•Improve on results
•Cut costs
•Improve on results
•Repeat these steps one as often as possible. . . . .
•Produce gas without Ellenburger water
•Cut costs
•Improve on results
•Cut costs
•Improve on results
•Repeat these steps one as often as possible. . . . .
OBJECTIVESIn the Johnson County Barnett
OBJECTIVESIn the Johnson County Barnett
•Acquired approximately 25,000 net acres
•Drilled four exploratory wells
•Designed completions that avoided conventional wisdom
•Avoided Ellenburger water in three out of four wells
•Established commercial gas production
•Built our own infrastructure
•Acquired approximately 25,000 net acres
•Drilled four exploratory wells
•Designed completions that avoided conventional wisdom
•Avoided Ellenburger water in three out of four wells
•Established commercial gas production
•Built our own infrastructure
HALLWOOD’S APROACH THROUGH 2002
HALLWOOD’S APROACH THROUGH 2002
•First gas sales February 2003
•Continued drilling vertical wells to evaluate shale
•Evaluated various frac techniques
•Each design built upon the last, both good and bad
•Micro polymer, foamed gel, slick water
•Varying rates, sand concentrations, sand sizes
•Varied perforating strategies
•First gas sales February 2003
•Continued drilling vertical wells to evaluate shale
•Evaluated various frac techniques
•Each design built upon the last, both good and bad
•Micro polymer, foamed gel, slick water
•Varying rates, sand concentrations, sand sizes
•Varied perforating strategies
TIMELINE THROUGH 2003TIMELINE THROUGH 2003
SUBSEA DEPTH
WEST EAST
-6200
-6100
-6000
-5900
-5800
-5700
-5600
-5500
-5400
-5300G
odle
y 1
Bet
hany
1
Smit
h 1
Cod
y-
Mar
y A
nn
Chi
ldre
ss 1
Cod
y
Fla
vel 1
Lig
htfo
ot 1
Coo
per
1
Miz
e A
1
Miz
e A
2
Bro
wn
1
Par
nell
1
Han
na 1
Ken
non
1
Cit
y of
Wor
thin
gton
Man
n
THICKNESS
0
100
200
300
400
500
600
700
God
ley 1
Sm
ith
1
Mary
Cod
y
Lig
htf
oot
Miz
e A
1
Brow
n 1
Han
na 1
Cit
y o
f
Man
n
30/60/90 DAY PRODUCTION
VERTICAL WELLS
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
S M
an
n #
1
E B
row
n #
1
Co
dy H
un
ter
#1
C o
C #
1
Ch
ild
ress #
1
Co
op
er
#1
Miz
e A
#1
Falv
el
#1
Go
dle
y #
1
Wil
liam
s #
1
Co
dy H
un
ter
#3
Wil
liam
s #
2
Mcf
30 days 60 days 90 days
From first to most recent drilling
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
0
20
40
60
80
100
120
140
160
180
200
Gallons Pumped Pounds of Sand Avg Rate
FRAC STATISTICS HORIZONTAL WELLS
HORIZONTAL COMPLETIONSHORIZONTAL COMPLETIONS
DAYS ON MMCF
CEDF 1 30 42,231
Childress 1 30 19,294
McAnier 1 30 101,467
Buffalo Ridge 2H 30 85,270
Falvel 2H 30 103,699
Lakeview 1H 30 124,876
Godley 2H 30 157,451
Williams 3H 30 196,491
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
CE
DF
#1
Ch
ild
ress
#2
McA
nie
r#1
Bu
ffal
o#2
H
Fal
vel
#2H
Lak
eviw
1H
Go
dle
y2H
Wil
liam
s3H
Mcf
30 days 60 days 90 days
30/60/90 DAY PRODUCTION
HORIZONTAL WELLS
HORIZONTAL COMPLETIONSHORIZONTAL COMPLETIONS
DAYS ON MMCF
CEDF #1 335 221,981
Childress #1 293 464,131
McAnier #1 261 654,334
Buffalo Ridge 132 357,787
Falvel #2H 122 420,467
Lakeview 1H 102 464,981
Godley 2H 57 269,395
Williams 3H 30 196,491
TOTAL ACREAGETOTAL ACREAGE
Cleburne
Godley
Rio Vista
Lakeview 1
Harrison 1
•No markets•No markets
Unconventional resources may occur where there is no
infrastructure.
Unconventional resources may occur where there is no
infrastructure.
HALLWOOD ENERGY CORPORATION
HALLWOOD ENERGY CORPORATION
Compressor Station Construction
Cleburne Facility Facility is Operating at 70 MMCFD Designed for 140 MMCFD and suction 40 psi
Godley Facility Facility is Operating at 40 MMCFD Designed for 50 MMCFD and suction 30 psi
Rio Vista Facility Facility is Operating at 25 MMCFD Designed for 50 MMCFD and suction 30 psi
– Entire system to run at 80-200 psi at wellhead.
PIPELINE FACILITYPIPELINE FACILITY
HALLWOOD ENERGY CORPORATION
HALLWOOD ENERGY CORPORATION
North Half of Northern Acreage
Ponderosa Pine Power Plant
Lake Marti
City of Cleburne #1
CEDF #1
Worthington SWD
City of Cleburne #2H & #3H
Cooper #2
Cooper #1
Williams #1
Cleburne Compressor StationKennon #1
Williams #2
Buffalo Ridge #2
Buffalo Ridge #1Lightfoot #1
Tucker #1
Brown #1
Cody Hunter #3
Mary Ann #1
Godley #1EOG EOG
R Smith #1
HALLWOOD SWD, INC.HALLWOOD SWD, INC.
Cleburne Disposal Site
Next SWD Well
City of Cleburne #1
HEC Office
Ponderosa Pine Power Plant
Worthington 1 SWD
•No markets
•No water disposals
•No markets
•No water disposals
Unconventional resources may occur where there is no
infrastructure.
Unconventional resources may occur where there is no
infrastructure.
CLEBURNE DISPOSAL FACILITY
CLEBURNE DISPOSAL FACILITY
CLEBURNE DISPOSAL FACILITY
CLEBURNE DISPOSAL FACILITY
BB
LS
Fully Automated for fresh water loading or salt water disposal
•No markets
•No water disposals
•An uninformed public
•No markets
•No water disposals
•An uninformed public
Unconventional resources may occur where there is no
infrastructure.
Unconventional resources may occur where there is no
infrastructure.
•Lease forms that are simple, yet fair to everyone
•Equitable bonus and royalty terms
•An opportunity to educate
•Lease forms that are simple, yet fair to everyone
•Equitable bonus and royalty terms
•An opportunity to educate
An uninformed public - positivesAn uninformed public - positives
•The education process can be frustrating and time consuming
•We may be viewed as the stereotypical JR Ewing
•Visions of Jeb Clampett
•The neighborhood real estate attorney begins practicing oil and gas law
•The education process can be frustrating and time consuming
•We may be viewed as the stereotypical JR Ewing
•Visions of Jeb Clampett
•The neighborhood real estate attorney begins practicing oil and gas law
An uninformed public - negativesAn uninformed public - negatives
•No markets
•No water disposals
•An uninformed public
•An hour drive to the nearest bull plug salesman
•No markets
•No water disposals
•An uninformed public
•An hour drive to the nearest bull plug salesman
Unconventional resources may occur where there is no
infrastructure.
Unconventional resources may occur where there is no
infrastructure.
•Lower vertical drilling costs
•Lower horizontal well costs
•Lower vertical drilling costs
•Lower horizontal well costs
UNCONVENTIONAL GAS MEANS
CONTINUING EDUCATION
UNCONVENTIONAL GAS MEANS
CONTINUING EDUCATION
DRILLING COMPARISONDRILLING COMPARISON
Vertical – Air vs Mud
0
1000
2000
3000
4000
5000
6000
7000
8000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Dep
th (F
T)
Cooper 2-Air
Cody Hunter 3-Air
Rigby 1-Mud
Cates 1-Air
Airport 1-Mud
Mayfield 2-Mud
Drilling Days
DRILLING COMPARISONDRILLING COMPARISON
Horizontal – Air vs Mud
0
2000
4000
6000
8000
10000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Dept
h (F
t)
CEDF 1-Mud
McAnier 1-H-Mud
Childress 2-H-Mud
Buffalo Ridge 2-H-Air
Lakeview 1-H-Mud
Falvel 2-H-Air
Days Drilling
•Lower vertical drilling costs
•Lower horizontal well costs
•Evaluate perforating strategies
•Optimize horizontal well spacing
•Optimize horizontal frac volumes
•Lower vertical drilling costs
•Lower horizontal well costs
•Evaluate perforating strategies
•Optimize horizontal well spacing
•Optimize horizontal frac volumes
UNCONVENTIONAL GAS MEANS
CONTINUING EDUCATION
UNCONVENTIONAL GAS MEANS
CONTINUING EDUCATION
We should not be surprised when doing the same as we have always done yields the same results we have always gotten.
We must innovate.
We must continue to improve.
IPAAAustin, Texas
October 28, 2004HALLWOOD PETROLEUM, LLC
IPAAAustin, Texas
October 28, 2004HALLWOOD PETROLEUM, LLC