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Permalink Reply by Bacon on December 18, 2009 at 9:11

Just got a notice today that CHK wants to form3 new HA units in 14-12. The interesting thing is that they want to redefine the HA zone to go from 9,900' to 11,900'. 2000' seems a little overkill when others have defined it in several hundred in the same area.

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Permalink Reply by JD on December 18, 2009 at 9:44

Could you please provide a copy of that notice? Specifically, the part that talks of the redifinition of the HA zone from 9,900 to 11,900.

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Permalink Reply by Bacon on December 18, 2009 at 11:00

Under #7

Attachments:

• Screen shot 2009-12-18 at 3.57.53 PM.png, 308 KB

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Permalink Reply by JD on December 20, 2009 at 15:18

Bacon, Thank you for providing the attachment. One thought that comes to mind is a land owner with a sizable interest in that section may have a verticle Pugh clause that limits the lease to 100 feet or so below the Hosston formation. If the HA zone was redefined starting at a shallower depth, CHK might take the position that their lease gives them rights to the Haynesville and Bossier zones as well.

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Permalink Reply by Bacon on December 21, 2009 at 3:46

Exactly, I was wondering if this redefinition might take precedent over a contract depth restriction. Anyone?

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Permalink Reply by Skip Peel - Mineral Consultant on December 21, 2009 at 3:59

John and Bacon. IMO, the unit depth definition is required for regulatory reasons. It does not override the terms of a lease covering minerals within that unit. If a lessor has a standard vertical Pugh clause, the lease covers all depths and formations/zones down to the deepest depth produced plus 100' at the expiration of the initial lease term. As an example, if an existing well past initial lease term were producing from the Cotton Valley formation at 9,900', the lessee's right to develop stops at 10,000' even if that lessee gets a future redefinition of the CV zone in that unit to a deeper depth.

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Permalink Reply by Les Bamburg on December 20, 2009 at 5:17

Bacon, Chk request to redefine the Haynesville to 9930' - 11963' may be just so it will cover the entire Haynesville/Bossier Shale interval. This would allow both plays to be developed without having to file for new units.

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Permalink Reply by Spring Branch,mineral owner on December 20, 2009 at 21:35

Questar just completed a horizontal Cotton Valley well in Section 4 of 14/11 that IP'd at 9.893 million/day . That is a Cotton Valley, not a Haynesville! The same section has a huge Haynesville well , also!

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Permalink Reply by North LA on December 21, 2009 at 9:00

I'm starting to think they can throw a horizontal 3' down and get at least 5million/day :)

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Permalink Reply by BirdDawg, plain ole' idiot on December 21, 2009 at 13:55

Electro,
What does last forever? Certainly not the Haynesville either.

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Permalink Reply by Jack Blake on March 7, 2010 at 7:37

My lease says I reserve rights from the base of the stratographical equilavent from the base of the CV to the surface. It will be interesting as they are building a pad and pits now to drill a well. Will a landman be back wanting me to sign an addendum to give them the CV also? If so it'll cost them several thousand per acre.

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Permalink Reply by Skip Peel - Mineral Consultant on March 7, 2010 at 7:45

Jack. Formations depths are defined by reference to existing wells. There is likely a CV definition and depth range already established for your section. This is one reason that unit applications require notice to land/mineral owners and well permits do not. If an operator wants to apply to change a formation depth description by referencing a different well, you will get a notice letter. And an opportunity to object.

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