Replies to This Discussion

Permalink Reply by JeffNParis on November 20, 2009 at 1:31

Thanks Jay.

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Permalink Reply by Spring Branch,mineral owner on November 20, 2009 at 9:52

The SRLT 29H #1

Permalink Reply by DJG on November 6, 2009 at 3:04

I've posted this on a previous discussion re: Mr. Berman, but my speculation is that he has a secret identity as "Frosty The Coal Man" from the American Clean Coal Coalition's PR Campaign from last Christmas season:

http://www.youtube.com/watch?v=x8Gy-kgL8yA

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Permalink Reply by CB on November 6, 2009 at 2:19

Time will tell, the jury is still out my friend. Yeah I know, you're not my friend.

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Permalink Reply by Les Bamburg on November 7, 2009 at 4:05

CMK. this was my 3/10/09 comment concerning Mr Berman and my opinion has not changed.

"I have stated previously that I tend to disregard most of Mr Berman's statements as his research and methods seem to be sloppy at best. Last year he wrote about how the Barnett Shale was already in decline based on his review of Texas RRC information. As almost everyone in the industry understands the TRRC information dramatically understates the most recent months due to late reporting by operators. This fact is well known and readily apparent when someone does proper research. Instead, Mr Berman boldly (and incorrectly) publicized the Barnett Shale production was in decline despite the high number of new wells being drilled.

Now, Mr Berman has quoted EUR's for Haynesville Shale wells that are dramatically lower than any of the operators' based on his expert analysis.

I am sure Mr Berman has much expertise in geology but probably should avoid reservoir engineering and economic analysis."

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Permalink Reply by Les Bamburg on November 7, 2009 at 4:20

This was my 11/3/08 statement regarding Mr Berman.

"I will have to discount Mr Berman's credibility some due to his following statement:

"An unexpected and disturbing realization emerged from this re-evaluation of the Barnett Shale: production is in steep decline. Production fell 20%in the third quarter (Q3) of 2007 through Q2 2008 (300.8 to 239.6 Bcfe)*. The probable cause is a decline in drilling: well completions dropped 44% in Q2 2008 (358 wells) from Q3 2007 (641 wells). The US Geological Survey and industry analysts estimate nearly 30 Tcfe of recoverable reserves from the Barnett Shale. On June 1, 2008 cumulative production was 4.4 Tcfe, and it seems unlikely that the Barnett play will reach 6 Tcfe based on the pattern of decline observed over the last eight months."

Anyone that is familiar with the Barnett Shale or takes a little time to properly research TRRC data knows there is a lot of late and delayed reporting of production information for the Barnett Shale. Barnett Shale production is still growing and likely exceeds 4.5 Bcfd. Something Mr Berman would have known if he did his homework before writing such a misleading statement."

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Permalink Reply by Dion Warr, CPL on November 9, 2009 at 7:25

I am not sure about the pressure placed on World Oil, but in the so-titled Berman's last article (link here) referenced here, it appears that he has apparently never been on the 'front end' of any new play, either. The so-called 'braille method' as he employs it in the article is in fact exactly what happens when geophysical theory initially meets the field. The economics (particularly the commodity price(s) of the resource(s) to be explored / exploited generally drives the 'bubble', or lack thereof. Leasing activity in the Barnett for years prior to the 2007-08 'bubble' showed that bonus prices were fairly restrained yet increasing as the play proved out prior to the price spike in first and second quarter of last year.

Lease accumulations (sometimes pursued to rather overblown ends) generally will occur in all directions of prior reason along the extent of a proposed trend as part of the first phase of exploration. Eventually the economic margins and 'sweet spots' are delineated through empirical data and analysis chiefly made available by the drillbit. This happens routinely today and historically (although the availablility of 3D seismic has certainly resulted in an increase in 'bright spot' drilling and bypassed pay projects with tight prospect boundaries, IMO it is a different aspect of E&P); the fact that Berman is seemingly oblivious of this despite decades of 'experience' leaves me shaking my head.

One example that comes to mind was the initial posits made on the Austin Chalk play in Louisiana. There were more than a few wells through the Chalk from which to draw some drillbit and log analyses. There were the broad brush theories as to the geographic and geologic extent of the fairway. Eventually, 3-D seismic and the drillbit did much to dispel the hype and pinpoint the real ‘sweet spots’ of the play, and the correct drilling and completion techniques applicable to the local and regional geology, but not before hundreds of thousands of acres far and wide were leased by O&G companies and speculators big and small. One wonders in what little room that Mr. Berman was sequestered while those five years of leasing by ‘braille method’ was going on.

One could say much the same thing about the emergence of the Hosston, CV and LCV trend drilling that occurred in the mid-to-late 1990s, which turned some small fields into quite large ones, enlarged the margins of other fields (some by leaps and bounds), and reawakened so-called ‘old reliable’ historical fields which had been steadily depleting since the 60s and 70s. Although somewhat slower in development, this ‘expansion’ certainly did not proceed at a stately pace, either, and was marked by an initial leasing phase (and fairway) that may have been well-reasoned, but still left some speculation as to how well newer techniques (and newer thinking) could be employed in many areas that ‘seemed like good spots’ in theory.

One thing is for certain: though less common than in previous decades, the industry still counts many with a pioneering, wildcatter spirit in its number that have made the jump from dowsing rods and crystals to 3D seismic and advanced geophysics, and still push the envelope. Contrarians like Mr. Berman would find little in common with these folks. Maybe this was more his problem than a single nameless HK executive with access to World Oil’s ‘red phone’.

Just my two cents.

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Permalink Reply by Checkmateking on November 9, 2009 at 11:54

Very strong post Dion, you are an excellent writer.

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Permalink Reply by Roger Edmonson on November 9, 2009 at 8:39

Mr. Berman lists IHS as the source of his data in his column.

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Permalink Reply by LC on November 19, 2009 at 18:43

I thought the post on http://www.hornrivernews.com made some good points. You can find it here http://tr.im/Flii

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