Bossier shale in 2010
Exploration and production companies are starting to direct capital into the Bossier Shale, a shale formation located above the more famous Haynesville Shale in East Texas and North Louisiana.
Get Free Stock Analysis By Email The nomenclature of this shale can be confusing. Several years ago, before the Haynesville Shale became a prominent play, the shale on the Louisiana side was called the Haynesville Shale, while the shale in East Texas was known as the Bossier Shale, although it was the same continuous formation. Later, operators started to refer to the shale in East Texas as the Haynesville Shale so that investors would understand that it was indistinguishable from the shale in Louisiana. (Find out how to take advantage of this market without having to open a futures account in A Guide To Investing In Oil Markets.)
The Bossier Shale also is referred to as the Lower or Middle Bossier. The Upper Bossier Shale is located to the southwest and composed of sands. Some operators even refer to the Bossier Shale as the Upper Haynesville Shale. One company that already has tested the Bossier Shale with a well is Chesapeake Energy (NYSE:CHK), which has produced at a rate of 9.4 million cubic feet equivalent per day. The company described the results as not as "robust" as the Haynesville Shale.
Comstock Resources (NYSE:CRK) stated during its third quarter earnings conference call held in November 2009 that 60% of its acreage in the Haynesville Shale had Bossier Shale exposure. This would amount to 45,000 net acres. The company plans several test wells in 2010.
Petrohawk Energy (NYSE:HK) has acreage prospective for the Bossier Shale and plans to drill a test well in early 2010 on its 122,000 net acres. Petrohawk Energy says that the estimated ultimate recovery of the well should total approximately 5.5 Bcfe and cost between $8 million and $9 million.
Forest Oil (NYSE:FST) also has acreage prospective for the Bossier Shale in an area it refers to as the Middle Bossier. In 2010, Forest Oil will assess its potential with test wells.
Although exploration and production companies are hawking the Bossier Shale, no one really knows the potential of the shale since so few wells have been drilled into it.
Bottom Line
Investors will hear more about the Bossier Shale in 2010, as several exploration and production companies with acreage in the Haynesville Shale plan to test this formation. Even if the Bossier Shale is not as good as the Haynesville Shale, it still will be economical and provide more upside to companies. (Before jumping into this hot sector, learn how these companies make their money in Oil And Gas Industry Primer.)
Buck
Get Free Stock Analysis By Email The nomenclature of this shale can be confusing. Several years ago, before the Haynesville Shale became a prominent play, the shale on the Louisiana side was called the Haynesville Shale, while the shale in East Texas was known as the Bossier Shale, although it was the same continuous formation. Later, operators started to refer to the shale in East Texas as the Haynesville Shale so that investors would understand that it was indistinguishable from the shale in Louisiana. (Find out how to take advantage of this market without having to open a futures account in A Guide To Investing In Oil Markets.)
The Bossier Shale also is referred to as the Lower or Middle Bossier. The Upper Bossier Shale is located to the southwest and composed of sands. Some operators even refer to the Bossier Shale as the Upper Haynesville Shale. One company that already has tested the Bossier Shale with a well is Chesapeake Energy (NYSE:CHK), which has produced at a rate of 9.4 million cubic feet equivalent per day. The company described the results as not as "robust" as the Haynesville Shale.
Comstock Resources (NYSE:CRK) stated during its third quarter earnings conference call held in November 2009 that 60% of its acreage in the Haynesville Shale had Bossier Shale exposure. This would amount to 45,000 net acres. The company plans several test wells in 2010.
Petrohawk Energy (NYSE:HK) has acreage prospective for the Bossier Shale and plans to drill a test well in early 2010 on its 122,000 net acres. Petrohawk Energy says that the estimated ultimate recovery of the well should total approximately 5.5 Bcfe and cost between $8 million and $9 million.
Forest Oil (NYSE:FST) also has acreage prospective for the Bossier Shale in an area it refers to as the Middle Bossier. In 2010, Forest Oil will assess its potential with test wells.
Although exploration and production companies are hawking the Bossier Shale, no one really knows the potential of the shale since so few wells have been drilled into it.
Bottom Line
Investors will hear more about the Bossier Shale in 2010, as several exploration and production companies with acreage in the Haynesville Shale plan to test this formation. Even if the Bossier Shale is not as good as the Haynesville Shale, it still will be economical and provide more upside to companies. (Before jumping into this hot sector, learn how these companies make their money in Oil And Gas Industry Primer.)
Buck
Views: 192
Replies to This Discussion
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Permalink Reply by ALongview on -
I have noticed that the fields identified on permits on the Texas side vary quite a lot. The Northern part of the shale (Harrison, Panola, Northern Shelby) identify it as the Haynesville while the Southern part of the shale (Nacagdoches, San Augustine, Southern Shelby) all target the Bossier shale. Anything to that or just two ways to identify the same formation?
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Permalink Reply by jffree1 on
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ALongview I have seen a couple of references to a "proposal to combine the Carthage, N. (Bossier Shale) and the Waskom (Haynesville) fields into the proposed Carthage, N. (Haynesville) field". If this gets done it will go a long way to ending the confusion over field names.
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Permalink Reply by DJG on
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Jffree, although the Bossier and Haynesville are distinct strata formations, I have read elsewhere that as you move further west their boundries tend to get a bit muddled. Does that match up with your own understanding as well?
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D.G., We would need someone familiar with Texas geology to answer that question. Central Texas appears to me to be more as you describe but I wouldn't know where it makes that change.
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Permalink Reply by DJG on
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By the way, there's a new permit submitted by Exco today for Harrison, Co for their Jobe Shale Unit 1-H. Horizontal with 12,000' completion depth and listing both the Waskom/Haynesville and the N.Carthage/Bossier as seperate target formations.
http://webapps.rrc.state.tx.us/DP/drillDownQueryAction.do?fromPubli...
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Permalink Reply by DJG on
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Agreed that we will all be hearing much more about the Bossier Shale in 2010.
In fact, the lion's share of the last quarter 2009 deep well permits for E.Texas region in Shelby, San Augustine, Nagodoches, etc have all been listing the Bossier Shale as the primary completion zone target.
Considering that Devon's record breaking 30.7 mmfcd IP on their Kardell 1-H well in San Augustine is listed as a Bossier Shale well also gives a pretty stark counter argument to CHK's assessment that the Bossier is "not as robust" as the Haynesville. Perhaps that might be true in the section in LA where CHK tested their Bossier Shale results, however we will start having quite a bit more data on the East Texas side of the river coming out in 2010 as Devon's, XTO's, EOG's, SWN's and other's E.Texas Bossier Shale permits get, drilled, completed and announced.
Should be an interesting ride in 2010 and beyond!
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Permalink Reply by Terry L. Antee on -
Although exploration and production companies are hawking the Bossier Shale, no one really knows the potential of the shale since so few wells have been drilled into it.
The Bossier Shale lies on top of the Haynesville Shale so there have been a lot of wells drilled thru it.
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Permalink Reply by Spring Branch,mineral owner on
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Terry, way before many Haynesville wells were drilled, Chesapeake predicted 4 1/2 to 8 1/2 BCF reserves per well in the core. Looks to me like that is going to hold up pretty well and may be a little on the conservative side. They have drilled through and logged many Bossier Shales and produced a few. I'm betting the 5 BCF per well number which would be the mid point of a range of 4-6 Bcf per well holds up for the Bossier. Time will tell. Hope you and Theresa have a Happy New Year. Say hi to Percy for me.
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Permalink Reply by JeffNParis on
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On the site www.haynesvilleplay.com I found a post about the Bossier shale that I have a question about. I've copied and pasted the entire post below for reference.
At the bottom of the post, they have a map indicating areas where Petrohawk is going to do Seismic testing in 2010. It looks like it includes south Caddo Parish. Does that mean they think the Bossier Shale might stretch into South Caddo? Or is it a proven fact that it doesn't?
Here's the map I'm referring to:
http://1.bp.blogspot.com/_Z-ev1rkZfqY/S1YbVg7KpxI/AAAAAAAAA_4/1Z-zO...
Here's the entire post:
TUESDAY, JANUARY 19, 2010
Petrohawk Adjusts its Mid-Bossier Shale Estimated Boundary
I was interested to see a recent Petrohawk investor presentation that showed yet another estimate of the boundaries of the Mid-Bossier Shale, the shale formation above the Haynesville Shale. The top picture below comes from the January 2010 presentation, while the lower image comes from a November 2009 presentation. You can gauge the changes yourself, but it seems as though the Texas side seems most different.
New estimate: (click link to go to map)
http://4.bp.blogspot.com/_Z-ev1rkZfqY/S1YYg9uM2DI/AAAAAAAAA_w/QaxB-...
Old estimate: (click link to go to map):
http://4.bp.blogspot.com/_Z-ev1rkZfqY/S1YYH89I7II/AAAAAAAAA_o/SvgBJ...
The presentation had a couple of other interesting nuggets:
Total production from its 64 operating wells is greater than 500 Mcf/day.
The company estimates its Haynesville Shale wells will have an estimated ultimate recovery (EUR) of 7.5 Bcf.
2010 well costs for both Haynesville and Mid-Bossier wells will be $8-$9 million per well.
The company will drill its first Mid-Bossier well in Q1 2010.
Estimated EUR for Bossier Shale is 5.5 Bcf, but this estimate has little actual data behind it.
The company is actively involved in acquiring 3D seismic data, both through its own efforts and by purchasing data from third parties. The areas on the map below shaded in green are the company's 2010 targets:
POSTED BY ROBERT HUTCHINSON AT 2:53 PM
LABELS: HAYNESVILLE SHALE, MID-BOSSIER, PETROHAWK, WELL ECONOMICS
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Permalink Reply by Parkdota on
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There is a post in the Desoto Parish group discussing some of this. It appears that there is massive seismic research in order to find out where the BO actually is, starts, and ends. Chesapeke, Petrohawk, and Encana are all paying/conducting these seismic tests in our area of 14n 14w Desoto Parish. I guess we'll know in time. I am of the opinion, though, that even if it is in our/your area that it will be some time before the BO is tapped as the HA wells are taking care of the HBP and it theoretically has a better ROI than the BO due to the estimated production numbers being half in the BO as projected well costs appear to be similar in both the BO and HA. I would imagine that once prices increase then there might be more emphasis put on the BO.
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Permalink Reply by Les Bamburg on
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Parkdota, seismic surveys will help identify boundaries of both the Haynesville and Bossier Shale plays but the higher value may be in identifying the presence of faulting that must be avoided during drilling. Realize that the more significant factors for the shale formation are porosity, permeability, clay content, natural fractures, etc which require actual drilling to gather information for an area of the play.
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Permalink Reply by kittycatmama on
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Les, I have heard that there is a major fault line running in very norther part of 14/14 Desoto and then going heavily into 15/14. It is affecting where the laterals can go.
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