Replies to This Discussion

Permalink Reply by Cheerleader on November 10, 2009 at 8:53

Wilma and all MOTHERLOAD PEOPLE,
Why should SA mineral rights owners except less than LA. when San Augustine has the largest and most prolific well and counting!!!...multiple pay zones and oil. Please do not negotiate a lease, which will last through generations, because the price of gas is at $5.00. The attempts to downplay the Haynesville in the southern part of the play[ thinner and deeper] post the announcement of the largest well in the Haynesville Shale and one of the most prolific in the country is insulting.
SAN AUGUSTINE IS THE MOTHERLOAD OF THE HAYNESVILLE SHALE. Do not be dissuaded by those attempting to isolate the Kardell well. Devon knows exactly what they are doing and they are about to give SA county another monster well. DEVON ROCKS and SAN AUGUSTINE COUNTY IS THE MOTHERLOAD OF THE HAYNESVILLE SHALE!!!!!!!!!!!!

Permalink Reply by Wilma Watts on November 10, 2009 at 9:06

Cheerleader, I think the uphole behind pipe potential are as large, if not larger, than the haynesville from the hearsay I have overheard. Are they correct? No telling, but I would not discount it either.

Permalink Reply by ALongview on November 10, 2009 at 9:57

Wilma, There will be a large number of wells drilled in the next two years in San Augustine and Sabine County because of primary term leases. They must know more than they are letting on as to the quality of the southern part of the play because they are not planning on letting any acreage expire and they are not planning on renewing any of the leases in the 5k-6k range either. They will all try and hold as much acreage as possible and if the wells continue to come on strong in the area then the value of any unleased acreage in terms of bonus will undoubtedly go up........how high? nobody really knows. All I can say is that I would rather be part of the 480+ acre unit with the Kardell well in it at a 25% royalty than get an extra 2 or 3 thousand on the bonus. Just my opinion. Some people will be fortunate enough to have both but you know what they say about a bird in hand. I wish nothing but good fortune on anyone who has a piece of the shale.

Permalink Reply by Wilma Watts on November 10, 2009 at 11:05

New well by Cabot proposed about 6 miles NW of Kardell well - shallower test:

http://webapps.rrc.state.tx.us/DP/drillDownQueryAction.do?fromPubli...

Looks like it was just filed today.


The ACTION continues!!

http://webapps.rrc.state.tx.us/DP/viewW1PdfFormAction.do?submit=w1Pdf


wonder if Crimson is in this well? or Devon?

Permalink Reply by Wilma Watts on November 11, 2009 at 4:34

DARREN HOROWITZ: Sure. Okay, switching gears over to the mineral rights for a minute I know Devon press released that well in San Augustine County that you had mentioned and it looks like it IPed at north of 30 Mmcf a day. I would imagine that probably if you extrapolate that production profile it probably changes to a certain extent your mineral assets valuation. Would you consider leasing any acreage at this point or can you give us a little bit more color on how you're looking at the mineral's business now?

JOE MILLS, CHAIRMAN, CEO, EAGLE ROCK ENERGY PARTNERS LP : Sure, sure. I mean the mineral business as you know, Darren, we've spoken about this before, is certainly a highly profitable business for us. It is a proxy to commodity prices so as commodity prices have risen or fallen you've seen the benefits of that. That business threw off $40 million last year and this year it's on pace to do $15 million to $20 million.

The short answer is all of that acreage has been leased previously so it's already held by others under primary terms. Clearly we are starting to see permits on some of that acreage that we own in the central, southern part of San Augustine County that we're excited about. It's still higher risk. I mean clearly Devon's well has extended the Haynesville play significantly further to the east and the south than people had previously thought, and Devon's commitment to start drilling down Sabine Country Texas, which is moving back to the east, is extremely encouraging on two fronts for Eagle Rock.

One, they certainly are mineral position. But two, and almost more importantly, is our Midstream business. As I've talked about before we are -- one of the few infrastructure holders in that part of the world much further to the west in far western Nacogdoche County, but we are very committed toward building significant trunk lines back to the east in order to provide outlets to these producers.

This is a very unique area in that really absent coming in from the north, from the Carthage area or the west where we are there really is no way to get there. You can't come from the east because you're bounded by the Toledo Bend Reservoir to the east, which of course, is a National Forest and very difficult to access or obtain a right-a-way permits through that National Forest.

The other is coming in from the south, which again, we're probably one of the few that could do that partly because you have the Sam Rayburn National Forest on the southern end. So it is -- Eagle Rock is well positioned. We're very excited about some of these early results. The other thing I would highlight is the Middle Bossier play, which again we've seen some encouraging results from Goodrich Petroleum and others that are staking wells in central Nacogdoche County even as far south as Angelina County. So from both our mineral position as well as our Midstream business we think Eagle Rock could be well, well positioned to grow in this area, and we will see how the future terms and so far as our mineral business is concerned.

Permalink Reply by JWC on November 11, 2009 at 5:44

Good post Wilma. Keep'em coming!

Permalink Reply by jffree1 on November 11, 2009 at 6:27

Notice how they always downplay the leasing...

The short answer is all of that acreage has been leased previously so it's already held by others under primary terms.

While that may be true in some areas like County Line, for example, it is not true for much of San Augustine and Sabine counties. And smart owners are going to flock to lawyers to try and get some relief from marginal & shut in shallow production leases. "In Paying Quantities" is in need of a contemporary definition, IMO.

I know of one such well that was plugged by RRC in Sabine Co. last winter. Those owners were fortunate... others may not be. But it took hiring a lawyer to get it done.

Permalink Reply by Wilma Watts on November 11, 2009 at 6:32

You think Crimson is leasing more out here? Any rumors?


Just curious.

Permalink Reply by jffree1 on November 11, 2009 at 7:27

The clerks office is packed with landmen. Don't know who they belong to but someone is leasing. If the north end of the county is hbp that leaves the middle and south, don't you think?

Permalink Reply by JWC on November 11, 2009 at 7:31

What happened to Encana? They closed their office in SA County didn't they? I know they have land leased in the middle of the county.

Permalink Reply by jffree1 on November 11, 2009 at 7:51

You know, I was just pondering Encana. They loaded their plate last year and I've heard very little about their activity in the last six months. I know they have filed unit applications over in La. but I haven't heard anything else.

Permalink Reply by jffree1 on November 11, 2009 at 8:05

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