How will they drill it all in time!?!
If you ask me, I do not believe that CHK and HK can drill all of this newly acquired acreage and hold it before a bulk of the leases expire....
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Replies to This Discussion
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Permalink Reply by Foxiecajun on
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Me too, it is impossible! But they will have a piece of the action no matter who or where or who ever drills. I work for a different major company that is unknown in this play, we are drilling in Oct in Desoto parish, but no matter where we put our wells we will have to deal with Chesapeake and pay them. They want and have a piece of all action.
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I don't see how they're going to either. Plus Petrohawk/KCS has all the area they leased up before the HS play and Chesepeake has a lot of Classic Hydrocarbon leases from when they bought them out, many of those nearing expiration and will have to be renewed (at a much higher rate!) in order to hold the land.
Personally I'm trying to be optimistic, two years from now I will either drawing royalties, be close to drawing royalties or will get another lease bonus. I'll be 40 in 2010. I'd love to retire at 40!
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Permalink Reply by Jaybird on
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Petrohawk/KCS has been quietly leasing since 2005 in Lincoln and Claiborne Parishes. Our lease with Petrohawk/KCS expires in 18 days...and we are just waiting to see what type of offers wil come to the table.
I know Claiborne Parish and Lincoln has not been in the news but it's coming in time! Petrohawk has about 130 producing wells in Lincon Parish and they are coming our way.
Fingers and toes are crossed!
Jaybird
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Gray Sand, Lower Cotton Valley...Natural Gas is Natural Gas whether it's in the Haynesville Shale or next the the water tower down the road.
We have 255 acres and the Royalty % payout is what we are focusing on...not whether or not we get 10,000 per acre or $15,000.00 per acre to lease the land. If you can get that amount...I say more power to the land owners. Deposit the lease check and be happy.
But as technology improves... Claiborne and Lincoln Parishes will be on the news soon. Just look in Section 16 & 17 Township 19N Range 4 on the Sonris Site. KCS/Petrohawk has 16 wells in one section and 19 wells in the other section producing 2-3 MMCF/day. Multiply that x 16 and 17 wells and I believe that produces a very nice royalty check. Not to mention the permitted wells that are being drilled all around.
More $ than I will ever need!
Jaybird
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Permalink Reply by Snake Stewart on
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One of the fears I have ,concerns the fact that earlier lease deals didn't have the protection in them that most good leases have in them now. Granted , there is acreage in this play that boggles the mind. How many sections could be pooled or unitized to hold by production. The rig counts are enormous.But they pale in comparison to the numbers that are on the way. What about many smaller rigs punching holes in none depth protected areas to hold by production? HBP checks to the tune of $15 a month have killed some in my area.One guy got 1 check last year for $19 that has him HBP.These guy's aren't stooges. Nor are they comfortable with the bottom line to let billions in leases go back to the tables for renegotiating.
Another part of early leases is length of term.Many had 10 year clauses in them.Most now have at least a 3 yr primary w/ 2 yr option. Three years is an eternity for these guy's. Just look at our landscape and the changes that have taken place in 3 months. The new , bigger rigs have cut drilling time in half in some cases.They are much more powerful then smaller rigs. New drillbit technology will further speed up these giants into unbelievable drill times that shatter previous marks.
It would be interesting to know total acreage of play and find out exactly how many sections that will either be drilled, pooled or unitized throughout entire area. Wishing you guy's luck out on the fringes. You could get lost in the shuffle for a long enough period to free yourselves up! The guy's I am speaking of going back to tables are the big leases. If yours is about to expire then they haven't lost much due to smaller amount that you probably received back then. Have a good one !
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Permalink Reply by Grillin' - MmmMmm on -
Remember, they don't have to drill on every lease. Just one in every unit and get the units formed. That's 640 acres at this time in La.; and there will be other sands/horizons shallower that will allow some leases to be help HBP.
You may be able to get better bonus money by offering a longer term lease as well.
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Permalink Reply by Rick Cash on -
This question has been one on my mind from the first time I heard about Haynesville Shale.
I am currently employed by a company that contracts medics/support personnel to the petroleum industry.
From August 07 to February 08 I was assigned to Exxon Mobil Drilling operations in the Piceance Creek region north of Rifle, Colorado. When I arrived on location there was a brand new H&P Flex 4 rig being assembled for the pad which had SIX wells to be drilled on the pad. Between issues with working the bugs out of a new rig and lack of employee experience, it took two to three times the normal time to drill the first well as it should have normally taken. There simply was not enough experienced workers available in the industry. They had to receive on the job training which added more and more time to the drilling operations there.
I had an opportunity to look at a map of the planned and constructed drilling locations. It showed literally DOZENS and DOZENS of locations yet to be drilled. Each location to have a minimum of 6 wells to be drilled with more to be drilled as the field was placed into production.
One has to wonder how can the Haynesville Shale be placed into production by the time limits set by the leases with the current shortage of equipment and manpower already placed on the industry by drilling operations in other regions of the country.
This tells me that there will be, if not already, a "tug of war" between regions to attract drilling contractors. Guess the winners will get their fields drilled first.........What do you think?
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Permalink Reply by Skip Peel - Mineral Consultant on
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Isn't this the point in the thread where the subject of "top leasing" comes up? I haven't seen much discussion on it but I suspect we will hear more soon.
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Permalink Reply by Skip Peel - Mineral Consultant on
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KB, I apologize for not being more clear. I'm not saying that a top lease trumps the option. I am saying that those lessors nearing the end of their lease term with no extension clause or the end of the extension period can begin soliciting offers for top leases. I think that numerous O&G companies in the HS shale play will soon begin concerted top leasing efforts. I am beginning to see more activity. Though I seem to remember one mention in an old thread, I suspect that many members are not knowledgeable in this regard. Perhaps, top leasing should be addressed in a topic of its own?
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Permalink Reply by Les Bamburg on
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John, Chesapeake should have no problems holding all the acreage. I will use the combined 550,000 acres held by Chesapeake & PXP as an example. First, Chesapeake has indicated about 40% of the acreage is already held by shallower production. This leaves 330,000 acreas to be drilled. Based on 640 acre units this requires ~ 516 wells to be drilled. Each well requires 60 days so a rig can drill 6 wells per year. With an average of 30 rigs Chesapeake could drill 540 wells in 3 years. This does not even account the fact some leases have a 2 year extension option that can be exercised by the company.
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2 years may be fairly optimistic if you consider the time that it will take to gather in all the valuable acreage in this play that is currently unleased. The longer it takes to aquire the land the more it will cost them in the long run.Unfortunatly HBP arent going anywhere and there isnt much that can be done to speed up their wait.
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