New permits continue to be taken in Red River Parish. Petrohawk has recently permitted two wells in the Thorn Lake Field (09-14-11). What is the economic impetus for this? Why do some companies continue to drill and others walk away from leases?
Petrohawk is a unique situation. The company lost is primary credit facility, Lehman Brothers, early in the Haynesville Play and struggled to maintain their lease acquisition schedule. Since being acquired by BHP Billiton the company has the financial ability to finish holding those leases deemed valuable and has even taken some new leases. The wells permitted by Petrohawk are largely unit wells. They will probably drill few if any alternate unit wells. Petrohawk, like all the major Haynesville players will be here for decades to come and they are performing some housekeeping for the end of HA Phase One with that in mind.
I wish you were right, Skip, but Petrohawk is in the process of drilling a number of Alt Unit wells around the Lock & Dam, much like Exco did on the Moran place. There is a rig on 15/11 Section 33 and I believe it will be there until is has drilled 3 Alt Unit wells in Section 33 and 3 Alt Unit wells in Section 28.
They may be hedged, but I'm not!
SB, suggest that you perform a search of Petrohawk's permits for the last 60 days and see for yourself the ratio of unit wells to alternate unit wells. My comment is concerning Petrohawk's activity across the play. I am aware they are drilling some alternates. Those wells do not represent the majority of Petrohawk's wells permitted or drilling. Sorry to hear that you are getting alternate wells.
Skip, like you, I can certainly better understand their drilling Unit wells to hold acreage than I can all these Alternate Unit wells! I don't mind a little cash flow but at $2.48, the emphasis is on "little"!
CM, these two wells are in addition to the original Haynesville Unit well in this section. The Thorn Lake Field is located in some of the best Haynesville Shale area. Petrohawk/BHP may be hedged on natural gas prices and these wells could generate very good economics.
Each company's situation is different regarding quality of their Haynesville Shale acreage, natural gas hedge position and alternative drilling opportunities. Hence the reason some operators have remained active in the Haynesville Shale for now while others have stopped all drilling.
BHP-HK has stated before that they will drill alts in this environment, but in selective units. Thorn Lake has had some great numbers in certain areas. I still don't personally see the alt plan this year with BHP backing now, but as Les stated, each operator knows their own economics.
From the landowner's perspective, this is a good lesson of how an operator and lessee's economics define how much of your gas gets produced and at what price - not the landowner. I'm sure some of the owners would rather choke back further or wait for alts until price bounces back some. Instead they may be getting a lot of their gas produced at sub $3.
Thank you for your responses . . . we have just sent out letters demanding release on acreage in the Bull Bayou field of Red River Parish. The leases expired and no renewal effort was made even though a road, a pad, and a pipeline (to one well) had been constructed. The leases were held by several operators other than Petrohawk, though I thought they were part of the original package. A good lesson to be learned here.