Eagle Ford Shale
Our Eagle Ford Shale assets have grown in significance to our operations, and we believe they will continue to be a growing portion of our portfolio in terms of oil production, oil reserves, and investment for several years. As part of the Meridian transaction in 2010, we acquired interests primarily in an area of Karnes County, Texas referred to as the Eagleville field. Our acreage position also includes portions of Goliad and DeWitt Counties. The Eagle Ford is a shale formation typically developed with horizontal wells, which produce a highly desirable mix of oil, natural gas, and natural gas liquids. We own an average 21-25% working interest in the field. The wells are primarily operated by Murphy Oil, which has a 120 well development program with the potential of down-spacing and has dedicated up to three drilling rigs, a fully-equipped hydraulic fracturing crew, and a coil tubing unit to the area for the next two years.
Sooner Trend, Oklahoma
Our assets in Oklahoma have been owned by Alta Mesa for over 20 years and are located in large
mature oil fields with multiple pay zones at depths from less than 2,000 feet to 7,500 feet. The fields
were originally developed by Texaco, Exxon and Conoco and are located in the Sooner Trend area of the
Anadarko Basin. Wells in this asset group have historically been shallow-decline, long-lived oil wells
originally drilled on 80-acre spacing and waterflooded to varying degrees. We have over 40,000 net
acres that are mostly held by production contained in the Lincoln North Unit, Hennessey Unit, Lincoln
Southeast Unit, and Dover Unit, all located in Kingfisher County. We operate over 220 producing wells
with an additional 55+ non-operated wells. The rich natural gas produced in this area commands a
premium wellhead price. Internally, we have a multi-discipline team of geologist and engineers that are
focused on the Mississippi Lime, Oswego Lime, Hunton, and Woodford. We are working on reducing the
drilling and completion costs per well thru operating and drilling efficiencies. The infrastructure in this
area is mature and readily expandable. The average working interest in our 240+ wells in Sooner Trend
is about 70% with high net revenue interests. We began targeting this field for increased exploitation in
2012 by reactivating or deepening existing wells and drilling new vertical wells. We also began a
successful Mississippian Lime horizontal drilling program in 2012 and continued to improve our
techniques in this prolific area. Other exploited formations included the Hunton Lime, Oswego and
Woodford Shale. We stepped up our development plans in 2013 and 2014 in addition to focusing on
reducing the drilling and completion cost for these wells. These fields are made up from a siliceous
carbonate and have highly naturally fractured reservoir and geologic systems. We continue to improve
our understanding of the impact of water flow on production from our original Oswego and Manning
geological zones. Our Sooner Trend Mississippian Lime wells have produced comparatively less water,
which we believe is due to the protection afforded by the Chester Shale, which forms a cap over the
limestone in this area of Oklahoma. We recycle the majority of this disposal water into our waterflood
operation, reducing both disposal costs for the newer horizontal wells and water supply costs for the
older vertical wells. Production from this area is expected to significantly increase in 2014-15 compared
to prior years. This core operating area has substantial growth potential and is expected to provide
steady cash flow in the upcoming years.
Alta Mesa has three major areas of operation in South Louisiana, in fields originally developed by major oil companies, where we have working interests in over 60 producing wells and approximately 55,000 gross developed and undeveloped acres (~31,900 acres, net). These areas have multiple low-risk exploration and development targets, potential for exploiting substantial bypassed and overlooked oil pay zones, and opportunities to increase profitability through facilities de-bottlenecking, production enhancements and drilling.
Weeks Island Field . Weeks Island, located in Iberia Parish, contains some of our largest developed oil reserves. It is a historically-prolific oil field with 55 potential pay zones that are structurally trapped against a piercement salt dome, which we believe offer significant future opportunities for added production and reserves. The main field pay zones are characterized by high, stable production rates due to the predominant water-drive production mechanism and high-porosity sands. The field was discovered in 1945 by Shell and subsequently developed by Shell and Exxon. We acquired these properties in 2010 with our acquisition of Meridian, which had purchased them in 1998. We operate all of the wells in this field in which we have an interest. Since mid-2011 we have continuously employed one drilling rig and one completion rig in Weeks Island to exploit its potential for development through sidetracking, new drilling and recompletions. Additionally, Weeks Island oil sales prices are based on the Louisiana Light Sweet crude market price index, which has trended appreciably higher than the West Texas Intermediate index.