Ator #1H Gas Well - Drilling underway.

In the right background on the panoramic shot is the first drilled well, the Ator GU #1H, which is waiting to be fraced with a completion unit or rig. The Felderhoff drilling rig is now on the adjacent pad and has begun drilling the Ator #1H.

Ator #1H Drilling Begins

Devon reports that the "drilling" of the Ator GU #1H is finished, and that the Felderhoff #4 rig has moved over to the adjacent Ator #1H pad. The gas potential associated with this first well is not determined yet. The fracing of the GU #1H is likely 2 months off.

Devon is committed to selling the gas to Cross Tex Pipeline who has not yet begun their Ator lease gathering lines. Interestingly, the Enbridge pipeline just across the road will not be used.

Also, the source of water for the frac jobs is not known currently. A deep water well (down 6,000') has been staked as a possibility, but other alternatives are being evaluated.

Ator GU #1H - After earlier problems, drilling of horizontal leg underway.

Devon reports that the drilling of the horizontal borehole is finally underway. Since the Ator GU #1 is a new well in this area, a deep vertical hole was drilled to carefully log and examine the Barnett Shale formation. Subsequently, an engineering problem arose when more than one cement plug failed to hold for the horizontal "kick out." Approximately a week was required for resolution.

Once drilled, Felderhoff's #4 rig will set up on the adjacent Ator #1H pad. The log records from the first well may make the drilling of another deep vertical hole unnessesary.

The extent of the gas potential will not be known until the high pressure frac jobs are completed. This engineering process can take 2 to 4 months to be evaluated and completed.

General Information on the "Frac Process"

Here is some general information regarding the all important frac process of a Barnett Shale well.

The smaller completion rig (sometimes called a workover rig) follows the drilling rig by a few weeks and sometimes longer. During that interval, the company evaluates data required to complete the well and then schedule the frac work. When pipelines are not available, this removes any "hurry" in scheduling the frac.

Once frac job is done, there is usually another couple of weeks of flowback and cleaning out of the well and running production equipment.

Depending on the pipeline infrastructure near the well, it is not uncommon for it to be 150 to 180 days from "spud" (the beginning of drilling) to the sale of gas.

Drilling Underway on Devon's Ator GU #1H in NW Hood County

According to Devon Energy, a portion of the Ator Lease is now pooled with an adjacent 125 acre mineral lease creating the Ator Gas Unit. Devon exercised this pooling option to hold the 125 acre lease which was to expire in September. An amended drilling permit moves the Ator #1H into the Ator GU. The drilling of the Ator #2H will hold the remainder of the Ator Lease, and will be drilled following the completion of the GU #1H.

Felderhoff Bros Drilling Co, Rig #4, began drilling Thursday, August 17th, and the expected completion takes 2 to 3 weeks.

Ator #1H pad location complete, #2H pad underway