Replies to This Discussion

Permalink Reply by The_Baron on October 30, 2008 at 7:07

I always believed that the leasing boom in the haynesville was driven by companies looking for more wall street money. To get more money, they had to create a gold rush where the acres under lease was all that mattered. Forget what it cost or even if it was for a complete unit.

Now that the market has fizzled out, the big o&g will have to calm down and proceed with a more resonable exploration plan. Yes, they have huge leaseholds; however they will need complete units, drill sites, and the rigs, drillpipe to exploit their leasholds.

Not to mention that without more pipeline capacity it doesn't matter how big of a well you can drill. Nothing is worth anything unless someone can and will buy it.

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Permalink Reply by Slick1983 on October 31, 2008 at 11:04

The Baron has said something I started to say a couple weeks ago, but I was afraid I'd get flamed. I heard it from an upper level Texas Oil man. Truth is, this was all an artificial market, created to lure investors and those who were lucky enough to be a part of it have something to tell the kids about. But, I wouldn't look for it to happen again. At least, not in the same spot or any time soon. I know, because I lived though a "gold rush" in 1984, when a I watched a lease I had increase from $3K to nearly $120K. I say nearly $120 because that was what I was holding out for when the bottom fell, but I never got it - In fact, I wasn't able to get anything for it. The phone just quit ringing.

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Permalink Reply by Snake Stewart on October 31, 2008 at 11:21

Hello Slick 1983,

By "Artificial Market" are you saying that the well numbers arent correct or that the value isnt what it appears to be ? The O&G's basically fooled investors into buying this snakeoil ? If this is true , why arent they being investigated and or prosecuted like the Enron bunch and some of the other snakeoil salesmen ?
I sure did think incorrectly that Enron types weren't still able to get away with fleecing their investors like that.

Not trying to flame you or the Baron , but I will just have to ride this horse the only way I know how. And thats by looking out the windshield instead of the rearview mirror.I trust that ole upper level Texas Oil man of yours about as much as I do my Dallas Cowboys this weekend against the Giants. Aint lookin' good but thats why they play the game instead of letting others decide the outcome.Good luck to you and yours.Check back on us later to see how things turn out.

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Permalink Reply by Louzanne on October 31, 2008 at 11:33

Ended almost $7 today....& since CHK by way of Twin Cities, finally got our check (not draft) to us this week, I say go, go, go real or artificial mkt. as well! No pun intended.

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Permalink Reply by Snake Stewart on October 31, 2008 at 11:38

Hey KB , You are so right.These Shale plays are so bizarre because they are rewriting the books on how this all works. The old timers cant admit anything or they will have to admit that they missed it or were wrong. I dont blame them.This is a totally new set of rules and this aint the '80's. One of the main differences is OPEC cant drill more and make this all go away.

Until there is a huge amount of progress in alternate forms of energy, my minerals are still just as valuable as they were a year ago, if not more. Whether or not they can drill it all before those advances in other fuel sources are made is one thing.But since the O&G's hold most of the patents on the leading edge of technology in that field as well, I just dont imagine that they will let too much of that pipe dream out until they have expelled as much of the profit as they can from this source.That certainly seems to be many years away.

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Permalink Reply by Two Dogs, Pirate on October 31, 2008 at 12:02

I would say in July we had an artificial market. Today we are running real time. NG has been in this neck of the woods price wise for quite some time. CHK was paying big bucks in the Barnett with the price like it is now and below. They are selling that stuff off and coming to the HS. This is going to be a waiting game. The stock market made their correction for an Obama win early. The correction is built into their plan, I don't think we will see major drops anymore. Once investors are confident in whoever is elected the building of the market will begin.

Permalink Reply by Iris on October 31, 2008 at 12:22

Im voting for you Snake....about the minerals being just as important...Rec'd letter last Saturday from Twin Cities saying all lease offers were off, so I settled down for long winters nap...& then Monday I rec'd a letter Samson wants to drill ten more wells & force pool unleased folks like me. Course they may think us No. S'porters & Blanchards are ignorant hicks cause I talk that way...but I'm real stubborn in addition to being dumb. We can speculate all we want about this n that.. but why do these folks want to drill ten more wells?

Permalink Reply by Two Dogs, Pirate on October 31, 2008 at 12:25

Earl you may want to hold out and not settle for the amount of the last big lease in your area. Sounds to me like you don't need the money. I would bet the price goes much higher.

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Permalink Reply by BirdDawg, plain ole' idiot on October 31, 2008 at 15:56

Slick,
I'm glad you think your slick. I personally don't think you are near as slick as you think you are. I could be wrong, but probably not. Get flamed. No one cares. I know a lot of upper level oil men. From Texas, Louisiana, Colorado and some others I don't care to list. What is your experience in the business? What an "upper level oil man from Texas" told you? Any person really in the business knows that the HS is the real deal. Market conditions have hurt the bonus money, and it my not be the same in the near future. But you can believe this Mr. Slicker, the gas is in the shale and it ain't going no where. If you think this is an artificial market, well I don't want to finish what I want to say. YOU GO, YOU SLICK SON OF A GUN.

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Permalink Reply by BirdDawg, plain ole' idiot on October 31, 2008 at 16:12

Mr. Slick, (or so you think you are),
If you think the current prices for good Cotton Valley or Hosston leases is $150, you are even less slick than you think you are. You need to join the real O & G world. If you know where it is.

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Permalink Reply by Slick1983 on October 31, 2008 at 14:28

When I said artificial, I was referring to the huge bonuses, not the natural gas reserves, which do look good. If you think about it, when the norm by other companies are, or at least were, $150/acre for Hosston or Cotton Valley prospects, the Haynesville doesn't seem to be worth 100 times as much. I'd much rather have 100 acres in a Cotton Valley well than 1 acre in a Haynesville well, even though the bonus on the single acre Haynesville might be more.

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Permalink Reply by Snake Stewart on October 31, 2008 at 16:23

Well I would rather have a hundred too Slick, but being as I got 15 , I am much better off in the Haynesville. I think there may be some CV here as well just above my Haynesville. Heck, its probably co-mingling as we speak.(LOL)

When you look at the projections( reserves ), thats what drives the numbers up. Getting close to 7 X's bigger then the Barnett yet on fewer acres ? Come on Slick , the folks you are after have already been put to sleep.

P.S. Just for the record Slick, you just helped us build our own case without even knowing it. Just because something has been the "norm" for decades doesnt mean it was fair for the mineral owner does it ? I havent seen the numbers on many CV wells but I certainly havent ever heard of a CV EXPO either. All that leasing "norm" means is that folks have been getting hosed for a long time.

When Uncle Floyd and Uncle MAC got in a pis, urinating contest, it wasnt to benefit the mineral owner. It was to hurt the other O&G's and chase the rest away.One bad thing about them kinda contests, If the wind changes direction you may get some on your own leg ! Have a good one Slick

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