The Avalon Shale is slowly becoming developed and should see a lot of drilling action in 2013/2014.    

Chesapeake Energy Corp. (CHK)  has drilled more than 8 wells to date on their 120,000 net acres across Texas and New Mexico.  They predict that each well can produce 350 MBOE with an unrisked resource of 200 MMBOE.  Chesapeake anticipates operating an average of roughly six rigs in the Permian Basin unconventional liquid plays by the end of 2010 and plans to drill approximately 50 net wells.  

EOG Resources Inc. (EOG) - In the New Mexico Leonard Shale (Avalon Shale), EOG reported continued drilling success on an additional 18,000 acres and, combined with previous reported success on 31,000 acres, has now proven up 49,000 of its 120,000 total net acre position. The Elk Wallow 11 State #1H has been producing for over 30 days at an average rate of 337 Bopd with 3,070 Mcfd of rich natural gas. The Elk Wallow 11 State #2H has been producing for 11 days at an average rate of 505 Bopd with 4,770 Mcfd of rich natural gas. EOG has 100 percent working interest in these Eddy County wells.

Anadarko Petroleum Corp. (APC)  is currently testing Avalon shale to see if the formation is profitable:  Anadarko exited the quarter with four operated rigs and five non-operated rigs drilling in the Bone Spring horizontal play and one operated rig and one non-operated rig drilling in the Avalon Shale. A total of 15 wells were spud during the quarter and 19 wells were completed.

Devon Energy Corp (DVN) has been building a position in the Avalon Shale play.  Devon Energy (DVN) assembled over 230,000 perspective net acres in this conensate and liquids-rich gas play.  Although they are still in the early evaluation of the play, initial drilling results indicate an attractive, repeatable play with outstanding economics.  The best wells Devon Energy has drilled to date, have IP-ed at over 500 barrels of condensate per day, 500 barrels of NGLs per day and 3 million to 5 million cubic feet per day of gas.  Well costs in the play run between $3.3 million and $4 million.  Devon expects Avalon wells to have average IPs of 300 barrels of condensate per day, 300 barrels of NGLs per day and 2 million cubic feet of gas per day in the heart of the play. They expect per-well recoveries to average over 600,000 barrels of oil equivalent. 

"The Avalon is a separate play that we have a pretty significant acreage position out in the, really, spans the border between Texas and New Mexico out of the Delaware Basin, of the Permian Basin. We've drilled a number of Avalon wells. It appears that as you move across the Avalon from the west to the east, you find more oil, but in general, it's a gas rich play.  And we think there are some reasonable areas in the Avalon. But essentially, we have the acreage in the Avalon that we desire held by production and it is primarily gas and so we're deemphasizing that this year in terms of activity and emphasizing the more oil and liquids-rich areas.