During the second quarter of 2013, Shale Hunter drilled and cased one gross (.98 net) horizontal Eagle Ford well. This well is currently waiting on fracture stimulation.
In addition, we placed on production one gross (0.3 net) well in South Texas. The Company participated (through a 31% non-operating working interest) in a horizontal Pearsall well with Marathon Oil Corporation as the operator.
Highlights for the South Texas Division include:
•McCarty Unit A 1H - This well was drilled and cased to a measured depth of 17,438 feet (horizontal lateral length of 6,368 feet), fraced with 17 stages. The 24 hour flowing initial production rate was 584 Boepd on an 18/64th adjustable choke with 2,185 psi FTP. Magnum Hunter owns a 31% working interest in the well and Marathon Oil is the operator.
•Peeler Ranch #4H - This well was drilled and cased to a measured depth of 15,206 feet (horizontal lateral length of 5,714 feet) and is currently waiting on fracture stimulation in the third quarter. Magnum Hunter owns a 98.4% working interest in the well and is the operator.
Mr. H.C. "Kip" Ferguson, President of Shale Hunter, LLC, commented, "This combo Pearsall/Eagle Ford area has always been of interest to our team. The right depth, gas-to-oil ratio, and completion style will be required to optimize the potential for these formations. The Pearsall Shale is different in composition to the Eagle Ford Shale. It is composed of more silica with interbedded organic shale and limestone. We believe that our Pearsall Shale acreage is located within the wet gas to rich condensate window of the play, which is ideally located between the Charlotte fault trend eight miles to the north and the Karnes fault trend to the south. Our internal technical analysis, core samples, our McCarty Unit A 1H well, and recent third-party well results in the area, indicate potential for both Eagle Ford Shale and Pearsall Shale productivity on this Atascosa County acreage.
During the second quarter of 2013, Eureka Hunter's focus has been on expansion efforts in Monroe County, Ohio. Eureka Hunter has acquired and cleared in excess of 20 miles of right-of-way in southeastern Ohio and has initiated pipeline construction in this region. Eureka Hunter anticipates production from Monroe County wells to begin flowing into this new gathering system before year-end 2013 with additional pipeline(s) to be installed throughout 2014.
Eureka also set its third compressor at the Carbide central facilities site in Wetzel County, West Virginia during the second quarter to assist with low pressure gathering and to help manage mainline pigging operations. Current daily throughput on Eureka Hunter is averaging more than 110,000 Mcfpd, and Eureka Hunter anticipates the connection of additional gas supplies in the third and fourth quarters of 2013.
TransTex Hunter, Eureka Hunter's treating and processing division, experienced increased demand for gas treating units due to the slight stabilization of gas prices and the continued drilling in the liquids-rich resource plays, especially in the Eagle Ford Shale. Opportunities in the gas processing sector are being driven by producers seeking to take advantage of processing uplift. Currently, TransTex Hunter is in the process of further expanding its existing fleet by building smaller and medium size processing equipment which will allow it to take advantage of producers' requirements for processing while waiting for the larger cryogenic processing facilities to be constructed, which require greater lead times.
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