The ups and downs of Arkansas’ natural gas production

Despite declining prices for natural gas, Fort Smith businessman Bennie Westphal says the Fayetteville Shale Play and the associated natural gas exploration and production industry in Arkansas is “still a blessing” economically.

Westphal, who has business interests in the oil and gas industry in Arkansas, Louisiana, Oklahoma and Texas, recently was interviewed on the subject by Roby Brock, a content partner with The City Wire.

For example, Westphal said, Houston-based Southwestern Energy Co. still plans to drill about 700 wells during 2009 in its “sweet spots” in the Fayetteville Shale. He said Southwestern will continue to “focus a lot of their attention and energy in the Fayetteville Shale and just wait for gas prices to come back.”

(Link here for a video clip of the interview with Westphal.)

However, not all players in the Fayetteville Shale Play are doing well.

Hallwood Energy, an investor in the Fayetteville Shale, filed for Chapter 11 bankruptcy earlier this week. The company cited falling energy prices and a lack of new financing for its bankruptcy filing.

Hallwood Energy listed from $50 million to $100 million in assets and more than $100 million in debt in Chapter 11 papers filed in U.S. Bankruptcy Court in Dallas, where Hallwood Energy is based.

“The U.S. and global capital markets are effectively frozen,” the company said in court papers. “The unprecedented depth and breadth of the current financial crisis has resulted in Hallwood Energy’s decision to file Chapter 11.”

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