Replies to This Discussion

Permalink Reply by Bacon on August 3, 2009 at 5:10

While I'd agree with you, I'm wondering what purpose all the applications for alt wells serve?

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Permalink Reply by Dion Warr, CPL on July 31, 2009 at 14:56

Gingles:

If you have a good Schedule 'A' attached to your lease, they should pay you for the house on their way down to the adamantium...

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Permalink Reply by Austin Eudaly on August 3, 2009 at 4:33

Those numbers do appear to be correct under those conditions. Unfortuntaley, while your gas price is conservative, Im not sure the EUR is. That would be a best case scenerio.

Most operators will not be motivated to drill 8 wells per section at $4 gas. It is more likely they will drill one to hold it by production and sit on the remainder of the reserves to either sell to the Exxon's of the world or wait until gas gets back up past the $8 range where the are making great ROI's.

Obviously, we all hope for those higher prices, but as of now it does not look like that will happen in the near future. On the industry side, when looking at 1 net mineral acre in terms of value, we would estimate it based on 1 well drilled per section ($9,375.00) over the life of the well. Lets all keep our fingers crossed for gas to go up though and get closer to those bigger EUR's.

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Permalink Reply by RJ on August 3, 2009 at 6:07

$9375.00 over the ENTIRE life of the well??? 15.00 a month per acre for 50 yrs?? WOW sounds like it would be better to work a walmart as a do you need a buggy person.lol So much for getting excited about the future. AM I seeing this correct???? I hope not!!!!!!!

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Permalink Reply by Bobi Carr ("parker") on August 3, 2009 at 6:16

RJ,

Those decline rates aren't such a negative when you look at it like this. You don't wait the 50 +/- years to get your money. They put out a lot of gas quickly and then continue at a slower pace for many year.

The 50 years is for development of the 8 wells per section.

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Permalink Reply by Linda Whatley on August 3, 2009 at 5:09

If anyone is interested, I just received an offer from a company out of Mississippi that wants to purchase 1/2 of my royalty interest for $2,750 an acre. Of course I'm not selling.

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Permalink Reply by Bobi Carr ("parker") on August 3, 2009 at 5:27

I like Chesapeake's numbers better than mine:

Chesapeake sees sharp Haynesville output hike


By OGJ editors
HOUSTON, Aug. 3 – Chesapeake Energy Corp. expects to hike its Haynesville shale gas output to a gross operated 575 MMcfe/d at the end of 2009 and as much as 1.025 bcfe/d by the end of 2010.

The production rate in late July was 175 MMcfe/d net and 285 MMcfe/d gross operated.

The company plans to average 33 operated rigs in the second half of 2009 and 36 rigs in 2010 compared with 29 currently active.

Chesapeake has added 40,000 net acres since Mar. 31, 2009, and is now the play’s largest leasehold owner at 510,000 net acres. Plains Exploration & Production Co., Houston, Chesapeake’s 20% joint venture partner, owns another 113,000 net acres.

The two companies have drilled and completed 74 Chesapeake-operated horizontal wells.

Assuming a flat Nymex gas price of $7/Mcf for the life of the well, Chesapeake estimated pretax rates of return from a 6.5 bcfe horizontal Haynesville well drilled for $7.5 million of 42% excluding the benefit of drilling carries and more than 345% including carries.

Chesapeake recovered 35% of its $4.7 billion Haynesville leasehold investment with the sale of a 20% interest to Plains, bringing Chesapeake’s net investment in Haynesville leasehold to $6,000/net acre.

Three second quarter completions achieved pipeline-constrained initial 30-day average production of 15.3, 14.2, and 15.2 MMcfe/d. The three wells are in Caddo and De Soto parishes, La.

Source:Oil & Gas Journal

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Permalink Reply by Major Bonnie on August 3, 2009 at 11:42

Hey Parker, You might be better off financially buying stock in Chesapeake! I was thinking of buying a few shares, but my conscience got the best of me! MB

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Permalink Reply by Dion Warr, CPL on August 3, 2009 at 12:55

Parker:

You can certainly modify and revise your purportedly 'conservative' estimates upwards if you wish, as long as you promise not to buy the Jimmy Choo's prior to having the mailbox cash to pay for them. OK?

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Permalink Reply by Dion Warr, CPL on August 4, 2009 at 2:37

Caliente:

(Howlo wolf that you are) pls remember that is not proper or wise to chew on you Choos or other shoes.

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Permalink Reply by Mac Davis on August 4, 2009 at 23:53

Well, Dancer thinks shoes are pronounced "chews." I'm sure she'd like Jimmy Choos as well, but Walmart brand imitation Crocs are her favorite.

Kill that shoe!

Luckily, they seem to last just about forever for dog service, but they do eventually lose the strap. It's convenient always having chew toys when we travel, but it's sometimes difficult to find them when I want to get up and go somewhere.

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Permalink Reply by sesport on August 3, 2009 at 16:56

Hey, Dion - Got any tips for investments that will APPRECIATE (rather than DEPRECIATE) to sustain us into our "golden years." I don't really see the Choo Shoes getting me there. LOL!!!

thanks & best - sesport, going long :0)

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