Energen (EGN) reported an update on its operations in the Avalon Shale during the fourth quarter of 2011. The company has 110,000 net acres in the Permian Basin prospective for this play.
Energen said that a test well drilled to the Avalon Shale in Loving County, Texas, had an initial production rate of 200 barrels of oil and 750,000 cubic feet of wet natural gas per day. The oil production on this well is now down to 75 barrels per day. Energen has 340 drilling locations into the Avalon Shale based on 320 acre spacing.
Energen used smaller fracturing stages on Avalon Shale wells in an attempt to reduce water production and maximize production. The company believes that this well design actually inhibited production. Energen plans to shift capital from the Avalon Shale to the deeper Wolfcamp in 2012.