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Permalink Reply by Skip Peel - Mineral Consultant on February 17, 2015 at 6:12

Excerpt from The Last Boom by Clark and Halbouty, 1972.

"By the end of 1931, there were 3,607 wells in the East Texas Field!  More than 109,000,000 barrels of oil had been produced, and it was obvious that the 109,000,000 barrels constituted only a very small drop in a very large bucket.  The oil came to the surface so readily and in such quantities that geologists and engineers were constantly revising their estimates of the giant reservoir's petroleum content."

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Permalink Reply by Max on February 24, 2015 at 3:42

Texas oil made winning WW2 possible. 

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Permalink Reply by Skip Peel - Mineral Consultant on February 24, 2015 at 3:53

Absolutely.  However prior to the war unregulated, over production in the East Texas Field also drove the price of a barrel of crude to ten cents, and in some cases less.  That period was the tipping point from unregulated commerce in oil to many of the conservation laws that are the foundation of contemporary energy regulation.

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Permalink Reply by Martin on February 24, 2015 at 13:32

My father was in the Army Air Corp at Barksdale AFB in Shreveport during the mid 30s. He said that on night flights into East Texas the flared natural gas would light up the entire horizon.

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Permalink Reply by Bradley McWilliams on February 23, 2015 at 8:31

Some what on the same line of thinking, but were in the middle of a records setting winter, and yet nat gas can't seem to make it over $3.  I often wonder if the general population has any idea of the impact shale oil and gas has made on the economy.

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Permalink Reply by Skip Peel - Mineral Consultant on February 23, 2015 at 8:47

It seems unlikely at this point that the natural gas monthly settlement average price for 2015 will exceed $3.  It may be closer to $2.50.

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Permalink Reply by Henry on February 24, 2015 at 1:18

Here is a contrarian view on natural gas.  Note that this is purely a technical argument, not a fundamental one.  Having said that, this guy is right a lot of the time.  Also, this doesn't imply that gas will stay over $4 -- only that it will trade to $4,and then, who knows....

http://allstarcharts.com/smart-money-loves-natural-gas/

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Permalink Reply by JHH on February 23, 2015 at 17:10

Seems like we ought to be getting close to zero oil imports... except of course from our friends... right?

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Permalink Reply by ddozier on February 24, 2015 at 3:01

I'm thinking this current pricing is pretty much a kiss of death on the brown dense.

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Permalink Reply by Skip Peel - Mineral Consultant on February 24, 2015 at 3:15

I haven't seen any new Brown Dense information from SWN in many months.  The Brown Dense page on their website has not been updated since 2/28/14.  And the information regarding acres under lease is from 12/31/13.  For all the hundreds of millions of dollars spent by SWN they did not find the formula to make the Lower Smackover commercial.  That's not an uncommon turn of events as all major and mid-major energy companies regularly make large investments that do not pan out. Interest in the BD seems to have waned long before the drop in the price of crude as evidenced by acquisitions in more established basins by both SWN and WLL.  I'm not sure there would be any current interest even if crude was $100.  At some point in the future when crude prices return to triple digits I hope there will be a company or companies willing to fund some additional exploration.

http://www.swn.com/operations/pages/browndense.aspx

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Permalink Reply by ddozier on February 24, 2015 at 12:24

I agree Skip, Its been very quiet.  I kinda expected a farmout or JV based on the last tidbit of info from SWN, but that seems a stretch at this point.  Of course there is the 3d shoot that they conducted and are still evaluating so who knows maybe some cotton valley in selected areas. Time will tell I suppose. 

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