Ann: Second Well Intersects Mississippian Formati, page-5

re: Ann: Second Well Intersects Mississippian... Ho hum.

The market is ultimately interested in profit.

Fracing and horizontal completions have been able to improve profits (and create commercial plays where they were previously uncommercial).

That does not mean every play needs horizontals.

The logical benefit of horizontals is being able to expose the well to alot of the play with a single vertical well. However the ML is shallow so the vertical well is cheap. The numbers put up indicate that the the EUR of horizontals is about 4 times that of verticals. The cost of horizontals is about 4 times that of verticals also.... so there does not appear alot of difference between the two.

Then you have to take into account well spacings. Horizontals are at 320 (160?) acre spacings. Verticals are at 20 (10?) acre spacings. This gives a better exploitation of the resource. When the resource was cheap ($100/acre) companies may have been happy with horizontals. With acres at $2000-5000 now, a serious rethink of completion techniques is required.

Then you have to think about shallower formations. Each vertical allows easy recompletion into them after the ML runs dry.

Personally I'm very happy with their vertical strategy.

Dis: Hold due to market jitters. Otherwise would be a buy.