Replies to This Discussion

Permalink Reply by Lee on August 14, 2008 at 14:07

Commish Welch isn't aware that these are 720 acre units---can he read? And he isn't aware of the redefining of the HS, is he blind????? Pleeease, ignorance is no excuse.

Jim, (and I'm really glad to see you back on this site-missed you for a day or so) at least 240+ acres in one of the units are held by 3 year leases in the CV. Junk wells completed just in time to hold the acreage.

Records show about 56 people attended the hearing and questioned surface damages (there is an EPA trailer on one of the properties) and the HBP issue.
What's next?

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Permalink Reply by M. Mcwilliams on August 14, 2008 at 15:01

This may need a separate thread, but can you, Mr. McConnell, please explain the potential consequences of this redefinition proposal? Is the concern that it would allow a company to produce a well in the Cotton Valley sand and thereby hold production to depths to the Haynesville Shale, thereby preventing even those who have depth restrictions in their leases from executing separate leases for Haynesville Shale-type bonuses? I cannot follow the train of thought of all the discussions on this topic, and am hoping you - or anyone - can put it into some explanation for me. But please, no yelling (no caps).

Thanks.

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Permalink Reply by M. Mcwilliams on August 14, 2008 at 15:16

Now I'm having a hard time following the thread, to know if you're replying to me. I'm not reading things into this that aren't there, because I really don't understand the issues. I'm just trying to figure out what the outcry is about, to give myself a basis for forming my own opinion as to whether to be concerned about these actions, or to simply understand what the proposed action is. Similar proposals are being made for units surrounding my section; I got the notices today.

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Permalink Reply by M. Mcwilliams on August 14, 2008 at 15:48

Sorry. I may be hijacking this thread with a different topic, but it was a good place to jump in.

I'm not even going to try to follow the discussion on the 720 acre units; it's too far from where my land is located for me to worry about.

Looking at the Pre-Application Notice that I received, it seems I was mistaken. There is no redefinition proposal. It is a proposal to create 1 Hosston Formation unit, 1 Cotton Valley Formation unit, and 6 Haynesville Zone units; to expand provisions of Order No. 191-12 to approve downhole combination of production from the Hosston and Cotton Valley units, and to permit downhole production from the Hosston, Cotton Valley and the Haynesville Zones, on any well drilled into various named units.

Since this is a pre-application notice, I am assuming it is not included in any of the online documents. I could not find it in a quick search, so I have tried here to condense the information. Basically, it seems that the operative proposal is pertaining to the downhole combination. I don't have a good understanding of the meaning of this. If you - or anyone - can enlighten me, I'd appreciate it.

Sorry for the confusion. Not a redefinition.
These units will be located in T15N, R 13W and 15N, 14W, Desoto Parish, Caspiana Field.

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Permalink Reply by Delaney Ds4/S1 on August 14, 2008 at 17:07

I have a question regarding this Pre-Application Notice. Since it states all of the drilling is to be 'downhole' does that not mean there will be no horizontal drilling. There is no mention of horizontal drilling in the papers. Should we write a letter, petition or show up at their meeting in September?

Permalink Reply by M. Mcwilliams on August 15, 2008 at 1:39

But it has been my understanding that a vertical well will not be able to produce from the shale rock in the first place, even to an inefficient degree. If that's true, why would any company want to spend all the money it would take to drill the well to risk getting nothing? Also, in these sections where the leases are a year or two old, it's quite possible that a lot of the section will be covered by leases that do not have any depth restriction, so that a simple Cotton Valley well would hold production anyway.

I'm pretty uneducated on all of this aspect of the business, but it just doesn't seem all that plausible to me that these companies will be able, or will want to, run around drilling 12,000 foot wells for little to nothing. Wouldn't they also risk losing the leases by being unable to produce in paying quantities? A little landowner like me may not be able to mount litigation against them on those grounds, but others will.

I guess for those sections in which a majority of landowners have depth restrictions, so that drilling to Haynesville Shale zone depths would be necessary to hold the leases, your scenario makes some sense. It still seems like a mighty expensive way to accomplish what they should actually want, which is production.

And please, no flaming. I'm not a shill for an oil and gas company. I'm just trying to look at all sides here to understand this.

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Permalink Reply by M. Mcwilliams on August 15, 2008 at 1:58

So, what was the official reason expressed by the Dept. of Conservation and the attorneys for the applicants as to why this is being proposed?

I'm still shaking my head, not completely convinced. It would seem that the investors in the wells want what landowners want - royalties. And it would seem that getting while the getting is good, no matter what zone is being produced, would be the primary goal. To that end, just holding leases isn't making anyone money right now, and they're out money for the rigs that, under your scenario, aren't intended to produce much of anything. I don't really get that.

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Permalink Reply by boo on August 15, 2008 at 2:45

you are so correct. Petrohawk has already been assigned some leases from Camterra.

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Permalink Reply by M. Mcwilliams on August 15, 2008 at 3:18

Yes, the pre-application order covered some sections in 15-13 and in 14-13, so you would have received it, also. The law firm of Hargrove, Guyton, etc represents J-W, apparently.

And I still am not totally convinced about the motives for doing this. I'd like to know more about the ability to produce from Haynesville Shale rock via a vertical well - that seems to be the issue, as you and kb frame it. t least I think so.

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Permalink Reply by DrWAVeSport Cd1 on August 15, 2008 at 13:05

KB,

Thank you for your help and understandable explanations. I agree with you that the HS is going to be HBP by vertical well drilling because it will be allowed by the DOC. The O&G "hype" per "HS horizontal wells," is going to be quite small in comparison to the HS vertical wells that are being permitted and going in everywhere. No equitable royalties will ever come out of the HS vertical wells. So...there is only one point to this madness, as you say HBP and that will continue on and on until companies decide the next move of this play.

I don't understand the re-unitizing of previously held minerals into different units that won't produce any more than they produced yesterday, because the drilling is no different, just deeper (when permitted). It seems to me an effort in futility, except for holding a powerful grip on leased lands that have been slowly dripping out royalties for years and an effort to set up the future for drillers and smaller E&Ps to make Mega Bucks off of theses tactics.
The l/o is just providing the platform for these future plans, l/o will be reaping peanuts out of these methods. (imho)

DrWAVeSport Cd1 8/15/08

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Permalink Reply by michele-C2 on August 15, 2008 at 2:23

Anyone out there willing to take a stab at the question about T16N, R16W, Sec 1? Sure would appreciate an opinion from someone who can interpret that map!! Please?????

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Permalink Reply by James CD1 on August 15, 2008 at 2:47

Michele- try calling Jim Broussard ,Shreveport office of Conservation and see if he can interpret the map and give you an answer to your question. It won't hurt to try. 318 6767585.

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