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Southwestern said in its fourth-quarter earnings report that it had completed its first well, the Roberson 18-19-1-15H, this month to a total depth of about 9369 feet with a 3600-foot horizontal in Columbia County, Arkansas.

“The lateral was landed in the lower third of this zone and subsequent core analysis indicated this section had some of the lowest permeability in the entire interval,” the company said.

The well, which has been producing from eight of 11 fracture stages, flowed 103 barrels of oil per day at its peak, as well as 200,000 cubic feet of gas per day and 1009 barrels of water per day.

The results did not elicit much excitement; analyst Mike Kelly of Global Hunter Securities called them “unimpressive”.

Investors were similarly unimpressed. Southwestern’s shares closed at $33.31, down 5.72%, in heavy trade on the NYSE on Tuesday after touching a low of $32.69 earlier in the day.

The underperformance did not come as a surprise to Marshall Carver, an analyst with CapitalOne Southcoast, in light of the well results. But he thinks “significant underperformance” could make for a “buying opportunity”, according to a research note.

Southwestern said it had indeed learned from the first well. The company sunk its second probe – the Garrett 7-23-5H-1 in Claiborne Parish, Louisiana – into the top of the interval and was drilled faster and “had better oil shows than the first well”. That well, drilled to a depth of about 10,863 feet with a 6536-foot lateral, was also spudded this month.

Southwestern also spudded a third well in the play this month, the BML-31-22-1-1H located in Union Parish, Louisiana. Analysts expect results from these wells in April.

Carver urged patience with the Brown Dense play, which has attracted intense interest from companies looking to increase their liquids production.

“Peak rate so far of 103 bpd will be viewed as disappointing,” Carver said of Southwestern’s results in a research note.

“Investors will need to be patient with this potential play; it will likely take several more wells before we have a good idea of what Brown Dense wells are capable of producing.”

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BASTROP — A Delaware-based company owned by ExxonMobil  has received a permit to drill in what may be a mineral bearing formation under southeastern Morehouse Parish.

Louisiana Department of Natural Resources records show XTO Energy Inc. of Wilmington, Del., received a drilling permit from the state Office of Conservation on Nov. 7. Acquired by ExxonMobil last year, XTO has previously been active in the Haynesville Shale play in northwestern Louisiana.

The permitted horizontal well, ExxonMobil 2H No. 1, will begin and end in two different townships near the Boeuf River northeast of Oak Ridge.

The well has a proposed surface location in Township 20 North-Range 8 East with a permitted vertical depth of 8,000 feet, from which drilling will then move laterally 5,000 feet to the north, to a proposed “bottom hole location” in Township 21 North-Range 8 East.

The well will tap into a formation known as the Lower Smackover. Also called the Brown Dense, it’s a limestone layer at the base of the Smackover Formation believed to reach across Morehouse, Union and Claiborne parishes as well as southern Arkansas. The LDNR announced in August the development of the dense as a new shale play (petroleum-bearing formation) using new technology such as lateral drilling.

The Brown Dense is believed to contain both gas and oil reserves, and ExxonMobil 2H is permitted as a gas well. However, Louisiana Oil and Gas Association President Don Briggs said XTO will probably be looking for oil.

“We’ve had a huge shift [in Louisiana] from gas to oil exploration,” said Briggs. “Nobody is looking for gas right now because prices are very low. Where [the new well] is at, they’re probably going to get some gas, but it’s more of an oil play.”

Records on file with the Morehouse Parish Clerk of Court show ExxonMobil Corp. leased 270 acres in the vicinity of the new well to a Metairie company in 2002 for exploration of “oil or gas or both” at a depth of only 2,700 feet. The lease expired in Oct. 2002.

ExxonMobil 2H is the third well permitted in Morehouse Parish this year, following several months of increased mineral leasing activity.

Dan A. Hughes Co. LP of Beeville, Texas — which has received a permit to drill in an area near Beekman — has filed mineral leases on more than 25,000 acres in the parish this year.

Records on file with the Morehouse Parish Clerk of Court show Hughes filed memorandums on seven new five-year mineral leases totaling 186 acres on Nov. 7. All of the Hughes leases are in areas northwest of Bastrop and northwest or southwest of Beekman.

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