Replies to This Discussion

Permalink Reply by Randy on July 27, 2008 at 15:04

I've heard 90-120 days to get in and drill and get out, thats not considering pad site setup and construction I dont suppose.

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Permalink Reply by Snake Stewart on July 27, 2008 at 15:07

Tough , but good question. I wonder if part of the reason that offers in my part of the coutry are trailing Bosier parish is partly due to the fact that they may not be able to get to all areas in the three years that they have initially to do so. A lot of lease info I am hearing now is putting larger bonuses to longer terms. Even with all the announcements by Trinadad and these others about increases in rig counts , there aren't enough rigs in America to drill every section that is contained in this Shale area in three years time. How then is it economically smart for O&G's to continue leasing ?They will have to begin containing larger tracts of land intounits for HBP purposes.CHPK is already talking about 1920 acre units. Thats three sections that can be held by one hole.

One other thing that has to be considered in addition to your question is available pipeline infrastructure. They have to have a way to move it !

I believe they have plans that we may not have touched upon as of yet. Surely they know what they are doing.Having to pay the 2 year options on all the leases they can't get to would have to affect their bottom line and the price of gas negatively.This should be a very interesting post.

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Permalink Reply by Randy on July 27, 2008 at 17:35

If CHK doesn't buy these leases someone else will, it's not an issue of can we HBP, they don't have an option but to lease as much as possible. They probably have 500 guys working on nothing but "How do we hold it". I was talking with an engineer for Haliburton and he told me the number of rigs he had to have designs finished for by the end of the year and it was a lot :)

Randy

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Permalink Reply by Bacon on July 27, 2008 at 17:10

They drilled 1500 new wells in the Barnett Shale in '07. 90% of those were horizontal. I don't know if the infrastructure in LA can handle that but it gives you an idea of what they're capable of.

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Permalink Reply by Skidmark on July 27, 2008 at 17:14

Are the Barnett rigs capable of drilling the Haynesville? If so, I'd guess that alot of those rigs would be moved over.

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Permalink Reply by Bacon on July 27, 2008 at 18:10

"I'd guess that alot of those rigs would be moved over."

I'm no expert but I did sleep at a Holiday Inn last night. From what I've read and seen, a lot of those rigs are the 1500-2000 horsepower rigs that can drill up to 17,000 ft. However, the way I understand it, most all of them are under long term contracts and won't be moving to LA anytime soon.

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Permalink Reply by Skidmark on July 28, 2008 at 2:46

More guessing -- for the Barnett rigs that CHK has under long-term contract, I would guess that CHK would be able to redeploy any of those rigs to Haynesville.

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Permalink Reply by Bacon on July 28, 2008 at 11:35

"Chesapeake is currently utilizing five operated rigs in the Haynesville Shale play and anticipates operating at least 12 rigs by year-end 2008, at least 30 rigs by year-end 2009 and up to 60 rigs by year-end 2010. Under this planned rig allocation, the companies anticipate drilling at least 600 wells over the next three years."

From a PXP press release.

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Permalink Reply by M Mouse on July 28, 2008 at 2:52

My uncle works for a O & G company and told me is there's no "holdups" they usually go in drill & cap off in 45 days.

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Permalink Reply by P.G. on July 28, 2008 at 2:53

Can they consolidate into 1920 acre units if the lease only says 640?

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Permalink Reply by Jenni on July 28, 2008 at 3:31

The 45 days estimate might be for drilling. The completion will probably add another 30 days or so depending on set up time, number of and how the zones are frac'ed, flowback time, and any problems, which seem to be the rule rather the exception when it comes to horizontal wells.

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Permalink Reply by Moe on July 28, 2008 at 12:01

Would this pressure then to HBP as much as possible also be factored into "today's" lease offers? In other words, spend big in leasing $$$ where there's "no doubts" as to whether or not you can get the job done with the rigs you have now. Then, start calculating and reducing the leasing $$$ for those in areas you feel you'll "probably" get to within time. And finally for those in the areas that we don't want anyone else leasing but we're just not quite sure we can get to, here's the one-time, last-minute 5yr $5,500 (or yesterday's $200/acre) DEAL. Is this my conspiracy theory? Or perhaps just plain sound business practice??????

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