Following horizontal well completion activities in the Lower Selma Chalk area of the Gwinville Field, Mississippi-focussed producer, Southern Energy Corp, has reported average natural gas rates at 3.6 MMcfe/d (99% gas), a marked rise from the original LSC horizontal wells. Ever since, the company has been tapping into its commercial value, driven by the exceptional well flow to facilities.
This comes from the first of the company's three remaining drilled but uncompleted (DUC) horizontal wells from the Q1 2023 drilling programme, the GH LSC 13-13 #2 wellbore.
The well was stimulated with 25 fracture stages, placing over 5.3 mn lbs of proppant into the wellbore. While this increased proppant intensity by a striking 70%, targeted stimulation design changes boosted the predictability and speed of the fracture operations. To top that, it reduced the overall completion cost down to US$2.2mn by more than 10% below pre-job estimates. This and other cost savings have allowed the company to cut down such operational budgets by 20%.
Southern will continue to monitor both regional natural gas pricing and well performance from the GH LSC 13-13#2 over the upcoming months before making a decision on the completion timing of the remaining two DUC wells and will update the market at that time. The remaining two DUC wellbores have been drilled in the LSC and City Bank formations.
Ian Atkinson, President and Chief Executive Officer of Southern, said, “We are very pleased with the early flowback results of the GH LSC 13-13 #2 well that will help us establish a longawaited type curve for the remaining potential 60+ LSC horizontal locations in our vast Gwinville inventory. We expect the lower decline from the LSC reservoir to support the ~ 3.5 Bcfe recovery per well predicted by both management and our third-party reserve evaluator. The Southern operations team has safely executed this operation at 10% below our original completion estimate, which not only drives a much quicker payout on this capital but will also allow Southern to start redeveloping the Gwinville Field much sooner as natural gas prices are still expected to improve materially into the back half of 2025 and continue into 2026.
"From a revenue generation perspective, since bringing these significant new production volumes on-line in late June with minimal incremental operating costs, Southern has also greatly benefited from a daily natural gas basis premium of approximately 17% above Henry Hub pricing due to the start of warmer seasonal temperatures and associated natural gas fired power demand in the southeast U.S. which we expect to continue or improve throughout the summer. We look forward to providing these improved cash flow results from additional Q3 volumes in November 2025.”