Southwestern Slumps in 1Q But Hits New Milestones in Fayetteville Shale

Despite posting both decreased revenue and income for its first 2012 quarter, Southwestern Energy Co. of Houston remains committed to the Fayetteville Shale.

The company declared income of almost $108 million on revenue of $656 million, down from last year’s $137 million on $676 million.

President and CEO Steve Mueller told investors Friday that the company was concentrating on the most productive well sites north-central Arkansas.

"Only the best economic wells are being drilled in the Fayetteville Shale projects," Mueller said, "and we have continued to add firm capacity in the Marcellus [in Pennsylvania] to ensure getting the gas to the most liquid points of sales."

Mueller said Southwestern placed 146 operated wells on production in Arkansas during the first quarter. That compares with 137 wells in the first quarter of 2010.

By March 31, eigh years of work in the play, Southwester was gathering 2.2 billion cubic feet of gas per day through 1,800 miles of pipeline in the Fayetteville Shale, up from with 1.9 bcf a year ago.

And on Wednesday, he said, the total volume of gas extracted from the Fayetteville Shale during those years topped 2 trillion cubic feet.

Mueller said Southwestern would continue to high-grade its drilling program in the Fayetteville Shale. In April, the company ordered two spreads of equipment for hydraulic fracturing that will initially be used in the shale.

"Each crew will be able to frac between 100 and 120 wells per year," Mueller said.