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Permalink Reply by Bobi Carr ("parker") on April 9, 2009 at 2:56

Jay,

Was #238527 one of the 15 wells. They have not released information on this well yet. I am anxiously awaiting the IP for this particular well.

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Permalink Reply by Bobi Carr ("parker") on April 9, 2009 at 3:40

I know it can't be bad or they wouldn't have started the Hamel well, but a barn burner wouldn't hurt my feelings.

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Permalink Reply by w.r. frank on April 9, 2009 at 5:30

Stoneburner indicated that HK would be reporting on wells "in a couple of weeks." Since their earnings call will not be until early May, I interpret this to mean HK will be doing an Operations Update before the normal quarterly earnings call.

Stoneburner said the 15 wells had an average IP of 18 mmcfd. He spent a lot of time talking about the "rock." He said if you look at a North/South cross section of the HA. as you go north porosity declines and as you go southeast the HA. is deeper with temperature increased and porosity declines.

Stoneburner showed slides of Elm Grove 63 and commented on the calcite fractures in the shale cores. In his view, these fractures allow for more effective stimulation in the HK wells drilled to date. In other areas of HA. there is more clay and less calcite fractures which result in poorer fracs and poorer results.

He noted that HK's early wells were in Elm Groove, so many people speculated that the excellent results were caused by a sub-structure below HA. However, as HK has stepped out with recent wells that are off structure (Sample 9, Griffith 11) the results indicate that it is the quality of the rock (TOC, porosity (12.5%, effective 9.5%), permeability, pressure, gas saturation, thermal maturity), plus effective completion technique (all but one of the 15 wells were 12 stage fracs). He noted that HK uses 100 mesh sand in the early stage frac followed by either ceramic or resin coated sand. He said HK so far sees not difference in results between ceramic and resin.

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Permalink Reply by Bobi Carr ("parker") on April 9, 2009 at 5:42

w.r. frank,

What, other than EUR's, did you find most interesting at DUG?

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Permalink Reply by w.r. frank on April 9, 2009 at 6:07

The frightening information on pipeline capacity out of Perryville. If 60 rigs running now and HA. ends year at 80 to 90, then by 2011 the volumes will be enormous.

Stoneburner said that HK.'s production was 165 mmcfd. on Feb. 25 and in early April it was 220 mmcfd. WOW, that is growth in just over one month.

Jay, do you have an other notes? I have that there could easily be 5 bcf of supply in Perryville with NOWHERE to go. There is room in the summer to take it SE for electricity generation during summer cooling season, but in winter there is no capacity to take supply NE for winter heating season.

When supply hits pipeline capacity, you get gas on gas competition and PRICES go south quickly. Examples were given of Rockies gas going to $1 (and even to 10 cents briefly).

The speaker predicted shut-ins based on pipeline capacity. Given lead time, it was frightening.

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Permalink Reply by Les Bamburg on April 9, 2009 at 2:44

KB, that would be 7.5 Bcf per well which is consistent with their 4th Qtr 2008 conference call.

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Permalink Reply by SharonB T18N R15W S8 on April 9, 2009 at 3:51

I'll take my "100% royalty" on that! What happened to that thread started by the landman yesterday. I had only read page 1, came back later to read the rest and it was gone!! Did somebody take thier ball and go home.

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Permalink Reply by msfva on April 9, 2009 at 5:41

SharonB,
I read that thread I think it had a lot of misinformation. Yep, it got yanked quickly.

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