Replies to This Discussion

Permalink Reply by Mike on August 4, 2010 at 11:19

Alongview, The Sublet is a Boosier Shale well which is probably the 8 million CF well. It sounds to me, Devon is going to sub out some of their acreage to other producers because they are liking the oil opportunities in other plays.

Permalink Reply by jffree1 on August 4, 2010 at 13:09

That's what it sounds like to me, too, from these comments (I haven't listened to the call or read the transcript yet). But that is not new in this area... as there are cooperative efforts going on all over the county. These are really expensive wells and gas is stuck in the mid-4's.

I noticed the lapse by SM re:Haynesville but you have to keep in mind that onshore oil is the next big play... shale gas is not passe but it is hard to promote to investors right now due to the oversupply and price of gas. All of the new presentations are promoting liquids rich gas or oil in some form or another whether it's Colorado or South Texas or Canada.

Permalink Reply by ALongview on August 4, 2010 at 13:39

Jffree1,
I also am hearing the oil/condensate chatter everywhere and i understand it is the better economics of those targets but the SM wells are not expensive, they are relatively free, as Encana is paying $87 million for them. If they are going to go after the Eagle ford, Niobrara, etc. they are going to need more than the $200+ million or 25% they have left on their borrowing base. I see divestitures coming and due to the lack of chatter and the suppressed economics of the Haynesville I wouldn't be surprised to see them pull the trigger on it. They got into the play for pennies and they would have a premium on their acreage as it falls in the SW core. If they got comparable dollars to what Ellora achieved it would quickly raise $350 million for development of their oilier or gas rich plays.
The increase in production guidance of 5% is what seemed very small to me considering the 20% increase in capital expenditure. This increased capital expenditure didn't look to include anything from the Haynesville.
SM is increasing it's production outlook to 104 –108 BCFE
― Increase of 5% from prior guidance
― Increase to production being
led by oily or rich‐gas properties

Permalink Reply by jffree1 on August 5, 2010 at 3:07

"I wouldn't be surprised to see them pull the trigger on it."

It is quite possible. I wouldn't be surprised to see Crimson do the same.

Permalink Reply by DJG on August 5, 2010 at 4:27

The IP report for the Sublett that was filed at TRRC shows that it came in at 6.3 mmcfd.

Interestingly, however, for the Motley they stated that it was "brought online" at over 7 mmcfd. The IP report at TRRC for that one is showing 4 mmcfd but with 'adjustable choke". Perhaps it was choked back for testing purposes, but opened further one placed online?