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Permalink Reply by Grillin' - MmmMmm on October 8, 2008 at 1:34

This technique, "Pad Drilling", is starting to be the way to go for everyone. This is being done in the Barnett and in the Piceance (Rockies) as well as Oklahoma and Arkansas. It costs a little bit more to secure the topside land rights and build the pad but the cost savings in terms of rig moves, facility installation, etc. are very large. You'll see much more of this along the way. Another big big savings is the ability to build one frac pit and utilize it for several wells, rather than having to dig a pit, use it, then restore it for each and every well. Unless you are the surface owner of the drill site, it has neglible impact on royalty owners.

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Permalink Reply by OLD HILLBILLY on October 8, 2008 at 1:41

it also ties up leases that are going to expire soon by putting the land into production . 4 sec at a time .

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Permalink Reply by Grillin' - MmmMmm on October 8, 2008 at 1:53

I think people put way too much credence on section lines. The key is to get wells drilled. If a pad allows you to drill 4 wells a lot cheaper and a lot faster, then that's a great thing. Those four wells will start to bring in royalty payments, the real "prize" here. The reservoir doesn't know about these little lines. I'm about getting wells drilled, lots of them. This will make us all forget about these leasing bonuses, $25,000/acre, $100/acre, etc.

In today's environment, I'm looking for positives. There aren't many!! Heard a guy this morning on CNBC predicting a 27-36 month recession. Ouch!

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Permalink Reply by OLD HILLBILLY on October 8, 2008 at 2:22

yes that will be great , if they will produce the wells and not cap and go

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Permalink Reply by OLD HILLBILLY on October 12, 2008 at 0:57

THEY ALSO DO NOT SELL GAS FOR $2 AND MAKE ANY MONEY , AND IT LOOKS LIKE GAS IS GOING SOUTH

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Permalink Reply by Deep Driller on October 11, 2008 at 10:01

I figure they will do just enough to hold the leases by production.

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Permalink Reply by Les Bamburg on October 11, 2008 at 18:18

Jim, the discussion was about holding acreage so it would require far fewer wells than calculated.

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Permalink Reply by Willbilly on October 11, 2008 at 13:36

My arithmetic works out a little different for CHK. Lets just assume none of the 500,000 acres is HPB, with 640 acre units, they only need 781 wells to hold the leases. I know to fully develop it with 8 wells per section will take many years, but the discussion was about drilling before the lease expires. I have seen on here that even after cutting back, CHK still plans to operate 14-19 rigs in the HS in 2009, they could probably pull it off. I also don;t thinl they spent millions of dollars just to lose it.

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Permalink Reply by HBP on October 12, 2008 at 5:32

Shale Geo,
What's the word round the campfire about the sustained production of Messenger? I have not had good info on the recent performance of the southern locations.

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Permalink Reply by Les Bamburg on October 12, 2008 at 5:57

Jay, so was the net thickness similar to the Red River Parish wells?

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Permalink Reply by Snake Stewart on October 12, 2008 at 8:30

What about the leases that have been signed with the 1920 acreage clause.If landowner agrees then it wouldnt have to go before the DOC would it?By signing the lease they are agreeing in principle to the 1920.

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Permalink Reply by Les Bamburg on October 12, 2008 at 6:02

KB, build an LNG plant in Qatar or Australia. Of course you need those high prices to make a reasonable profit.

Just understand that not all international gas sells for those spot LNG cargo prices you see quoted in the news. A lot of gas is sold to local markets in the Middle East and Asia at a fraction of US prices due to government controls.

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