Replies to This Discussion

Permalink Reply by William Barnum on April 28, 2011 at 7:19

I listened to the the Cabot presentation this morning - sounds like they won't do anything until 2012 or 2013 on their own, and the JV's they have worked out, won't have any subsequent drilling this year.  They will be cutting their play down to 22K acres as they previously announched and using the funds from their JV's to keep those 22K acres under lease.  At least that is what I took away from the presentaion.  I was surprised that none of the questions were about their Haynesville plans.

Permalink Reply by Spring Branch,mineral owner on April 29, 2011 at 10:59

It is the herd instinct or "what happens to be hot now".  The research analysts don't own any minerals in the NE corner of Walker, A-57 or the SE corner of R. Totin, A-56, but we do, by gosh.  I'll be very happy if Cabot reached a deal with Exco and not disappointed if the deal is with EOG (I'm guessing Exco).

Permalink Reply by William Barnum on May 1, 2011 at 2:29

My guess is that Cabot won't do anything with the lands they have under lease in the NE corner of Walker A-57/SE corner of Totin A-56; except pay to continue those leases until they are ready to do something with them in 2012/2013.  It seemed to me from the way they were talking about their Joint Venture deals, was they were talking about already producing wells, where they could do the JV and walk away with cash, so they could make the payments on their other leases as they come due - which for the three year deals they signed back in 2008, means this year.   There is the well, 347-33215, which I believe has some of Cabot's mineral rights associated with it and it is being drilled by EXCO - it is mentioned in the comments above.  But, based upon the way they were talking at the meeting, it did not sound like they were doing JV's on areas that had not already been drilled.  But, they did not say that directly - it was just by implication.  You can listen to the talk on their web site.

http://www.cabotog.com/

 

Permalink Reply by jffree1 on May 1, 2011 at 3:40

Mr. Barnum, I just listened to the call again because I didn't come away the first time with the same take you have on it.  After hearing the comments (again) I still feel like they have worked 2 deals for a carried interest in 24 initial unit wells and have an agreement that no additional unit wells would be drilled if the gas price remains low.  What price would justify additional drilling?  Who knows... but it leaves me with the impression that Cabot thinks its not smart to be investing in these wells with the present price of gas and that, if someone else wants to do that (and carry them to hold the acreage), it's a good deal for them.  So, I see 24 more initial unit wells.

The third deal is to sell minority interests in both producing and non-producing (not yet drilled/completed?) units.

Permalink Reply by William Barnum on May 1, 2011 at 15:59

I hope your take on the comments is the correct one - since if I understand your note, you think they will drill 24 new wells.  My take, was that the 24 had already been drilled.  Too bad none of the folks asking questions clarified that.  As I said, I hope your take is the correct one.

Permalink Reply by jffree1 on May 1, 2011 at 16:44

The statement that they would be carried on 24 unit wells is what I'm stuck on.  Cabot has minority interests in a number of Haynesville wells with several operators (DVN, EOG, XTO).  They have operated on four hz Haynesville wells and one vertical.  On one of those four wells, Nolte #1H, the operator has been changed to EOG. 

So, my question would be... what do you think they would be "carried" on, if not new drills? They've said the 3rd deal was a sale of minority interests in several wells.

 

 

Permalink Reply by William Barnum on May 2, 2011 at 2:12

If you sell your interest in an ongoing operation for cash, but retain a percentage of the profits, that percentage is considered a "carried interest."  In the same way, a fund manager or hedge fund operator, has a carried interest in the profits, although may have no actual investment in the underlying business. 

 

Thus, use of the term "carried interest" to me does not necessarily mean new wells - it could, but it does not have to.

 

As I said before, I hope you are correct, in your reading of the actions planned by Cabot - I would love to see them sell off their Walker/Totin mineral rights to somebody that is going to actively develop the area.

 

Permalink Reply by jffree1 on May 2, 2011 at 3:23

Thanks sharing your thoughts.  It gives me a slightly different perspective on the topic.

I guess we are back to waiting for someone to share the details with us but I hope you (and others in the survey) see a well this summer.

Permalink Reply by RBH on May 2, 2011 at 12:07

on www.countyrecords.com for San Augustine..Looks Like 1 of the deals they did was with Devon;  It also appears they did one with EOG and guessing the 3rd is either with XTO or Exco

Permalink Reply by William Barnum on May 12, 2011 at 5:16

They are paying for the lease extensions in this area, so I guess it will be 2012/13 before we see any action.

Permalink Reply by William Barnum on June 30, 2011 at 0:08

I heard that Cabot has retained their interest in 347-33215, but is selling off some other leases they have in Nacogdoches to XTO - I know XTO has been active over in St. Aug., but does anybody know if they are active in Nacogdoches?

Permalink Reply by jffree1 on June 30, 2011 at 2:20

Yes, they are. At present they have eight Haynesville permits in five units of which three are drilled and waiting on completion and two are drilling now.

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