Petrohawk Reduces 2009 Capital Budget, Focused on Haynesville and Fayetteville Development
Petrohawk Energy Corporation announced that it will reduce its 2009 capital budget by a third and reallocate spending to more heavily weight projects with the highest internal rates of return and highest potential for reserve growth, namely, development in the Haynesville and Fayetteville Shales.
The shift allows the Company to further affirm its strong capitalization. The 2009 capital budget, which includes drilling, completions, seismic and facilities, is currently $1.0 billion, revised from a previously announced budget of $1.5 billion. The Company has no current plans or need to access the equity capital markets.
The reallocation of capital reflects an increased emphasis on development of non-proved locations in Petrohawk’s successful Haynesville and Fayetteville Shale projects, with the benefit of higher expected overall reserve growth potential for the Company. Petrohawk’s production guidance for 2009 represents 25% to 35% drillbit growth over 2008 estimated annual production of 305 million cubic feet of natural gas equivalent per day (Mmfe/d).
In conjunction with 2009 capital planning, Petrohawk completed the redetermination of its credit facility, which was increased to $1.1 billion from $800 million, on September, 10, 2008. The facility is currently undrawn.
Additionally, the Company is evaluating the divestiture of certain conventional assets in its Permian Basin region during 2009. These properties include interests in Waddell Ranch, Sawyer, Jalmat and TXL fields of West Texas and Southeastern New Mexico. The Permian Basin properties currently produce approximately 35 Mmcfe/d.
Third Quarter and Full Year 2008 Production Guidance Reaffirmed
For the third quarter, Petrohawk reaffirms its previously stated production guidance range of 310 to 320 Mmcfe/d. The Company also reiterates previously stated guidance for the full year 2008 of 295 to 315 Mmcfe/d, a more than 25% organic increase over pro forma 2007 production.
Petrohawk to Present at Merrill Lynch Global Energy Mid and Small Cap Conference
Floyd C. Wilson, Chairman, President and Chief Executive Officer of Petrohawk Energy Corporation, will present at the Merrill Lynch Global Energy Mid and Small Cap Conference on Wednesday, October 1, 8:00 a.m. Eastern Daylight Time. The presentation will be given at the Merrill Lynch Conference and Client Center, located at 623 Fifth Avenue, New York City, and is open to registrants of the Merrill Lynch conference. Others may join via webcast by following the link provided on the Company’s website, http://www.petrohawk.com.
Petrohawk Energy Corporation is an independent energy company engaged in the acquisition, production, exploration and development of natural gas and oil with properties concentrated in North Louisiana, Arkansas, East Texas, Oklahoma and the Permian basin.