The flat production profile in Appalachia is due to natural declines in production from a large number of older, vertical conventional and CBM wells that is being offset by new production from a relatively small number of HCBM
5 net) multi-lateral HCBM
development wells and three (2.
The production increases resulted from successful development programs in the horizontal Granite Wash play in the Anadarko Basin and the Hartshorne HCBM
play in the Arkoma Basin.
The decreases were largely attributable to reduced drilling activity in the first quarter and delayed timing in the initiation of production from third-party operated HCBM
wells drilled in late 2007 and early 2008.
The sequential quarterly production decline resulted from a reduced level of drilling in the Hartshorne HCBM
play, natural production declines and a delay in the completion of the first horizontal Granite Wash well, which was subsequently completed in January 2008 (see below).
7 net) multi-lateral HCBM
wells in its area of mutual interest with CDX Gas, LLC in southern West Virginia and 20 (10.
Two horizontal rigs are currently drilling HCBM
PVA continues to aggressively develop the properties it acquired in the Arkoma and Anadarko Basins in June 2006, and currently has two rigs drilling Hartshorne HCBM
wells and one rig drilling a horizontal Granite Wash well.
In Appalachia, production delays in the HCBM
development program continued during most of the first quarter due to water disposal issues, which were essentially resolved by the end of the quarter.
The increase was primarily due to the 20 percent production increase, including the acquisition of producing properties in the Mid-Continent region, additional compressor rentals at fields with this increased production, downhole maintenance charges associated with HCBM
wells in Appalachia and Selma Chalk wells in Mississippi, increased surface repair costs and increased gathering fees related to HCBM
and Cotton Valley wells.
6 net) successful HCBM
development wells were drilled on the Company's leasehold positions in West Virginia during the fourth quarter of 2006.
Drilling activity commenced in our Arkoma Basin HCBM
program in Oklahoma, where we drilled five successful wells during the third quarter of 2006, and anticipate drilling a total of 30 HCBM
wells in that area by year-end using two drilling rigs.