PetroQuest Energy (NYSE: PQ) announced the Thibodeaux #1 discovery well at the La Cantera prospect (17% NRI) in South Louisiana is currently flowing at a gross daily rate of approximately 31 MMcfe/d (26% oil and liquids) – the high end of company expectations (20 MMcfe/d to 30 MMcfe/d).

PQ and partners are currently drilling an unbooked development location on La Cantera. The Broussard Estates #2 well (24% WI) is drilling at approximately 13,000 feet, and expected to reach total depth of 18,900 feet late Q2’12.

Mississippian Lime Activity:

PQ is acquiring additional Mississippian Lime acreage in Northern Oklahoma. Currently, PQ has 33,800 net acres (up from 31,000 net acres as reported in Q4’11) and completed its first well to test the log data and well interval in the Lime. This well was later deepened and turned into a water injection well.

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In Pawnee County (48% WI), PQ has initiated its first horizontal well which is expected to be completed in mid-April 2012. This well will be drilled with a 3,600 foot horizontal lateral and completed with 10 frac stages. PQ plans to ramp up activity as it brings in a second rig in two weeks to drill a total of 12 to 15 wells in 2012. In its year-end conference call, PQ guided for its initial Mississippian well costs to average $3.5 million per well. PQ’s JV extension into the Mississippian provides a further source of liquidity, as its JV partner will carry the company on $92.6 million of drill costs in both its Mississippian and Woodford acreage.

Production Guidance:

PQ has narrowed its Q1’12 production guidance to average between 88 MMcfe/d and 90 MMcfe/d, as compared to its original production guidance of 86 MMcfe/d and 90 MMcfe/d. Using PQ’s midpoint guidance for 2012, the company plans to drill approximately 70 gross wells in 2012 with a CAPEX budget of $95 million.

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