Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on February 26, 2010 at 14:58

I stated that I did not know about E. TX and then you ask me about E. TX.? On my side of the line major shale players attempt to build "development blocks". Multiple adjoining, contiguous sections/units that maximize the efficiencies of development infrastructure. And makes the most of capex. Example, what is more efficient, scattered sections/units with miles in between or those that are clustered? A "stranded unit" is one not connected to other units especially when the next closest unit by the same operator is miles away. Petrohawk has a high percentage of stranded units in NW. LA.

Permalink Reply by Frank Martin on February 27, 2010 at 3:11

Hey, Skip,

Any advice on how to tell if my unit might be one of those stranded ones? There is an active (decently producing) well one mile to my north and a few wells (yet to be producing) two miles to the east of mine. Also, are the stranded units likely to never be drilled? That would suck.

Permalink Reply by smith1 on February 26, 2010 at 4:09

Hmmm, seems like I did have reliable source when I posted this earlier in the week.

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Permalink Reply by E & E on February 25, 2010 at 16:06

Two Dogs,
Here's a copy and paste out of the horses mouth:

Floyd Wilson - Opening Remarks

Incidentally, we have concluded our on-the-ground leasing effort in the Haynesville Shale for the most part, and now the only on-the-ground leasing effort underway is a limiting program in Eagle Ford Shale. We are well satisfied with our position in both areas.

Floyd Wilson answer to Dan McSpirit – BMO Capital Markets

Dan, the parallel would be what we did last year, we did our big leasing push in the Haynesville in 2008 and we did a lot of what I call mop-up in what have become defined as the core part of the field in 2009. We are essentially finished with that now. There is a few little odds and ends to mop up, but we have so much. We don’t feel driven to add anything that’s just really strategic to our current -- our near-term drilling plans and that the value equation is there. We just got so much on hand in both fields.

This was in their last conference call. Here's the link to the transcript:
http://seekingalpha.com/article/190223-petrohawk-energy-corporation...

Earlene

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Permalink Reply by Les Bamburg on February 25, 2010 at 16:26

Earlene, good post as I heard Floyd's statement on the conference call. As I recall they may be focused on leasing in the Eagle Ford Shale play.

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Permalink Reply by Bobi Carr ("parker") on February 25, 2010 at 16:30

Les,

What is your general feeling? Do you think they are in trouble or that they just have other fish to fry?

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Permalink Reply by Two Dogs, Pirate on February 25, 2010 at 16:49

Parker, they have cheaper fish to fry.

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Permalink Reply by Skip Peel - Mineral Consultant on February 25, 2010 at 16:55

I find Floyd's comments do not jive with what has been going on locally up until the cessation of lease activity. Without going into details, the recent activities of the managers and field personnel in the HS Play indicate that this was not a planned in advance move. At least not planned more than a few weeks. IMO, this move is necessitated by a financial problem. One that has been coming for some time. HK is absolutely the best acquisition target in the Haynesville Play and owns respectable leasehold positions in a number of other shale gas basins. I think it quite likely that an interested buyer would ask for a cessation of leasing while a deal was in the works. Petrohawk's leasing and unitization has been piecemeal at best for some time. A financially more capable E&P company would proceed in a substantially different manner concerning future leasing and unitization. Disclaimer: I am just an independent landman and the above are my personal assessments based on my limited knowledge and research.

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Permalink Reply by ken hatcher on February 25, 2010 at 17:00

I could not have expressed it quite as well but you are right.

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Permalink Reply by Les Bamburg on February 25, 2010 at 19:22

Parker, I do not see any financial trouble for Petrohawk. They have simply built substantial acreage positions in three (four) major shale plays and need to move on into getting acreage held and then start a true development mode. They have good liquidity and that can be further enhanced by sales of non-core production or their Hawk Services company.

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Permalink Reply by Spring Branch,mineral owner on February 26, 2010 at 1:34

I agree with Les. You can be assured they will buy strategic leases if, as, and when necessary, but for the size of the company as compared to Chesapeake, Encana, EOG, etc., they have a very substantial acreage position in both the Haynesville and Eagle Ford. It is time to spend every available $$$ drilling wells to get it all HBP'd. Remember, that they have not partnered ip with anybody as Chesapeake and Exco have. I think that before Floyd sold the company outright, he would partner with a major international oil companybut remain in control as Operator. That would flush up the balance sheet substantially. Also remember that they have many acres in the Bossier to drill that are already leased and is rapidly being HBP'd.

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Permalink Reply by HBP on February 26, 2010 at 1:57

I don't think liquidity is as much as issue for reasons set forth already and a good point by Les B about Hawk Field Services. Also if you read into the earnings call further, they have some planned divestures to fuel their drilling in Eagle Ford and here in NW LA. The divestures may also just be a quick shave before marketing themselves for the inevitable acquisition.

But you can't lease forever within the same borders before your cost/benefit starts to skew the wrong way. Wall Street will probably treat them favorably (eventually) for attempting to keep lean this year and their focus on polishing up the positions they already have.

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