June 1 (Bloomberg) — Chesapeake Energy Corp. said it drilled the largest oil gusher in the company’s 23-year history at a “significant” discovery in the Anadarko Basin of Texas and Oklahoma.
The Thurman Horn 406H well in the Hogshooter formation produced 5,400 barrels of crude a day during its first eight days of operation, Chesapeake said in a statement today. The well, which reaches a depth of 10,000 feet (3,000 meters), also pumped 4.6 million cubic feet of natural gas and 1,200 barrels of natural gas liquids daily.
“It’s the best oil well in the history of the company,” Jim Gipson, a spokesman for Oklahoma City-based Chesapeake, said in a separate e-mailed statement.
The discovery will accelerate the second-largest U.S. gas supplier’s shift to more profitable crude production, Chief Executive Officer Aubrey McClendon said in today’s statement. Chesapeake’s shares have dropped 27 percent this year as gas prices hit a 10-year low and after probes began of McClendon’s personal finances.
The shares fell 3.3 percent to $16.35 at 10:03 a.m. in New York.
Chesapeake has 65 more Hogshooter sites identified for drilling in the next few years. Rig costs and other drilling expenses are already factored into the capital budget so no increase in total spending will be required, the company said.
The Hogshooter formation sits atop the company’s existing holdings in the Granite Wash formation, according to the statement. Chesapeake owns 88 percent stakes in the four Hogshooter wells and 30,000 acres of leaseholds.
A second well in the Hogshooter formation, known as Meek 41 9H, had average daily production of 1,300 barrels of oil, 365 barrels of liquids and 1.4 million cubic feet of gas during its first 27 days of operation, the company said. Two additional wells in the formation are awaiting completion.
–Editors: Tina Davis, Jasmina Kelemen
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