Replies to This Discussion

Permalink Reply by HBP on August 9, 2008 at 1:09

I agree that there will continue to be deals cut to raise capital. However, the money never was, and will not be, a bottomless pit. Some of the posts on this forum like to suggest that the companies are holding back money or that everyone in every area should wait for 30k/acre bonuses. All I can say is that it will be a rude awakening. This play is so new, and there is real risk involved. I will find it hard to believe that this trend buy will continue until the reserves prove up more. And no, Aubrey Mclendon's claims do not magically make the reserves true - they magically move stock prices and coax financing. Multiple proven wells in an area that stay online at 10m+ a day for longer than a day - that is the only truth.

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Permalink Reply by M. Mcwilliams on August 9, 2008 at 1:42

I think what you just said is very important. I've been telling people that this is not a sure thing. The fact that the Barnett Shale grew in scope over the last 3 - 4 years doesn't automatically mean that the Haynesville Shale leasing practices will continue on the exact same path. Yes, looking at the similarities of the plays gives a road map, but it doesn't foretell the future. I remember around 1984, when the last boom went bust, lots of people in oil & gas related jobs were suddenly out of work, office buildings that had sprung up here, in Lafayette and Houston & New Orleans sat empty, drilling and leasing stopped. I'm no expert, and I know that there are vast differences between then and now, but I keep saying to people that anything can happen. Just two years ago real estate speculators, mortgage companies, and the like had people believing that housing values would NEVER go down. How ridiculous was that, in hindsight? (actually it should have been obvious that such absolute statements are rarely true. . .). My point, of course, is that nothing in the world is a sure thing.

Lease bonus prices don't have to keep going up. It might not just be an evil oil company ploy if the acquisitions slow down - it could be a very real reaction to market forces or any number of factors. We can't tell the future. Nothing is certain.

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Permalink Reply by bullbayou on August 9, 2008 at 3:17

I can assure you that there is some truth to that. The days of paying big money for any leases anywhere, are coming to an end, at least for now. To get big money, your land will have to be where they really want to be, and real close to the rigs. Therefore, if you have minerals that are unleased, don't get mad at the oil companies if they choose not to pay what you want for it. There are plenty of other places they can go spend their money.

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Permalink Reply by CMI A1 on August 9, 2008 at 3:43

Good grief. Enough is Enough. It's obvious that a lot of you guys have found a site that a lot of land owners are on and reading, so you spew your retoric here. I guess it's not enough for you guys to go around with your deceiving message door to door any longer.

Let me just say to the landowners, that if you hear this type of retoric- assume that is it a lie. Yes, it's fun for them to talk about the Barnett Shale, because it is smaller and the well's are not XXX monster wells like we have in the Haynesville Shale. It helps them devalue your land, which is their game plan.

If you have unleased land that is sitting on the Haynesville Shale- don't let the tactics of Sean, bullbayou, HBP and many others scare you. They have also read the words of Chesapeakes CEO stating that these wells in the Haynesville Shale are beyone comparison of those in the Barnett. They also know the production of what Petrohawk is releasing from their wells. All of this just solitifies what we have and it is their job to get you to sign as soon as possible and for the least amount.

Listen- If I was trying to sell a car that I own, I could go to a blue book and find out the value because there are other vehicles out there like mine and the value has been established.

With the Haynesville Shale - the "blue book" is still being written. If our Shale is 5 to 6 times the size of the Barnett Shale and our wells are XXX monsters (according to O & G CEO's), then guess what... my land is worth a TON OF MONEY. If they are getting $27,000 for a Kia, then I want Mercedes Benz money since that is what I have according to O & G.

Mineral Owners- Don't buy the lies these peddlers are selling. Your land is worth a lot of money and they know it. If you build your knowledge, strengthen in numbers, and have patience, you will see huge dividends in the future.

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Permalink Reply by M. Mcwilliams on August 9, 2008 at 3:58

You used the example of a blue book value of a car. Look at the auto industry. They kept pumping out SUVs - our GM plant was full-steam ahead on production of the Hummer3 as its flagship product. Now what is the blue book value of an SUV? The blue book can't keep up with the falling values of those things! And it all happened virtually overnight. That's the only point I'm trying to make - it's not a sure thing. Yes, the product may be there, but lots of different forces can be at work to change the landscape and the money. Just don't depend on ever-rising prices and payments. Every boom may not go bust, but at some point it levels off.

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Permalink Reply by Snake Stewart on August 11, 2008 at 14:06

I agree. 6 months into a 20 year play isn't that point would you really think ?

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Permalink Reply by shelby on August 9, 2008 at 4:11

I agree with CMIA1, and hope you're correct in your opinions. It seems to me that we are really only about six months into the play, atleast as far as the general public/landowners being advised there was even a "Haynesville Shale". Comparing this newly active play, to the oil boom bust during the 80's, or the Barnett, which has been in the works for years, "is not" logical analysis, there is a different time line in play here; like comparing a thorn to a spike. Additionally, the mergers are bringing in big money to the main players like CHK, but, don't count out the stock market, with domestic and international investors to flood the up and comers with the cash they need to buy into the play; acres mean big dollars just having it in their land portfolios. I am sure the foreign companies/investors would love to get a percentage position in our natural resources. I don't think anyone is running out of money, at least, not in the immediate future.

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Permalink Reply by kfly on August 9, 2008 at 3:43

Seems to me that if the play gets bigger (larger geographic area), that increases the available land to lease and therefore drives down the lease bonus per acre... supply & demand.

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Permalink Reply by kfly on August 9, 2008 at 4:12

It's just supply and demand. Like gasoline... if people slow down buying and the supply goes up, there is more gasoline available than people are buying, the price goes down. That's why we've seen gasoline prices drop a little lately.

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Permalink Reply by kfly on August 9, 2008 at 5:13

I know this is going to start something!

Do you realize that Exxon's profit margin is less than 10%? even in these best of times for them.

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Permalink Reply by Mit on August 9, 2008 at 10:03

Exxon's most recent quartly report was released in July. The report covered April, May, & June. Gas prices at the pump and the price of a barrel only started going down in the last couple of weeks.

More wells do equal more money, but over a wider geographical area. I think klfy's point was that money would be distributed over a wider area, and possibly lower or slow the lease payments.

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Permalink Reply by Snake Stewart on August 11, 2008 at 14:10

I agree as well but as distribution widens the amount of value in your land doesn't decrease! You still have the same 150bmcf per section. No matter how many acres are added.

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