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Yesterday, Goodrich Petroleum (NYSE: GDP ) announced the completion of its third operated Haynesville shale well in East Texas. You may recall that I placed Goodrich, along with fellow Haynesville hero Petrohawk Energy (NYSE: HK ) , on my Well Test Wall of Shame for proclaiming highly ambiguous initial results.
Maybe somebody down there took my heckling to heart. In this latest release, Goodrich says its new well "produced into sales at a 24 hour initial production rate of 9.3 MMcf per day on a 24/64 inch choke with 5,200 psi." That wording, which specifies a time period and actual production from the wellhead into the sales line, is certainly an improvement over Goodrich's past releases.
Still, Goodrich hasn't gotten onto my good side just yet. As I said last time, companies need to provide 30-day production data. Anything less is just too light on information for my taste, particularly when we're talking about wells that decline as fast as these Haynesville gushers.
To illustrate the hype potential of these initial production rates, let's take Goodrich's first of three East Texas Haynesville completions back in May. This was reported to have "tested" at a rate of 7 million cubic feet per day. As we learned in June, Texas requires a 72-hour test to determine the deliverability potential of a well. That state data recently became available, and guess what? This well didn't produce at 7 million. Or 6 million. Or 5 million.
No, the J.K. Williams 7H potentialed at just under 2.5 million cubic feet per day. That's a woefully inadequate rate for a pricey Haynesville well.
Fortunately, Goodrich is seeing some better results on the Louisiana side of the play, with partner Chesapeake Energy (NYSE: CHK ) . Petrohawk, meanwhile, looks like it may have the best position in the entire play. So the Wall of Shame doesn't mean "going down in flames." It just indicates that the potential for misleading investors is higher than in the case of EQT (NYSE: EQT ) , Penn Virginia (NYSE: PVA ) , or others who highlight 30-day rates.