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: 188
Replies to This Discussion
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Permalink Reply by Parkdota on
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Les.....Ah, I see....I guess there's a tremendous amount of value via the seismic activity. I suppose either way it's a good thing. :)
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Permalink Reply by kittycatmama on -
I believe that Chesapeake is addressing the Bossier in Sec. 8 of 16/14 (south Shreveport). I have a friend who has acreage in that section and said that Ches. had modified its initial permit to include HA and Bossier. I will try to get that confirmed. There is probably a site on DNR to verify that, but I don't where to find that info
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Permalink Reply by Linda Blunt on
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Jeff,
You might want to add this. The key for these maps are: pink = HS, red = HS & BO, yellow = Petrohawk wells & green area to be drilled in 2010. Thanks for the maps. These maps came from a Petrohawk presentation on Jan. 11, 2010.
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Permalink Reply by JeffNParis on
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Linda,
Thanks! I didn't see a key for the maps on the haynesvilleplay site so this really helps. So Petrohawk is saying that they think southern Caddo has both the Haynesville and Bossier?
Thanks to all who've responded to my post. It'll be interesting to see how it all develops.
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Permalink Reply by Linda Blunt on
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Jeff,
If you want to read the entire presentation go tohttp://www.petrohawk.com/ and look at the investor relation at the top of the page then go to Presentations & Events on the left. Click on January 2010 BMO Energy Conference.
You are correct when you said, "It'll be interesting!"
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Permalink Reply by DJG on
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The full Jan 2010 Petrohawk presentation is in the attached file below
- Attachments:
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Permalink Reply by DJG on
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That first map posted is actually relating to only the HS with the following key info:
Red: Petrohawk's evaluation of HS Core area
Pink: Petrohawk evaluation of HS present and profitable under proper NG market conditions
Yellow: Petrohawk Leasehold acreage
Green: Seismic planned for 2010 and beyond
Attached below is a different map with their evaluation of of Bossier/Haynesville overlap potential
In this second map, the key is as follows:
Red: Petrohawk's evaluation of HS Core area
Pink: Petrohawk evaluation of HS present and profitable under proper NG market conditions
Yellow: Petrohawk Leasehold acreage
Dotted Black Line: Acreage inclosed withing dotted-line boundry shows Petrohawk's evaluation of where Bossier Shale is present and shows where it intersects with HS Core and present areas
Hope this helps clarify. - Attachments:
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Permalink Reply by Spring Branch,mineral owner on
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The Chesapeake interpretation of the Bossier is not nearly as gererous as Petrohawk's in the northern part of the play. South Caddo, South Bossier, and Northern DeSoto are not prospective (commercially) per Chesapeake. It will take some completions to find out the truth. No one has drilled more wells than Chesapeake so their interpretation would be backed by more evidence to date.
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Permalink Reply by JeffNParis on
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Oh well, one can wish.
But as my grandfather used to say, 'spit in one hand, wish in the other and see which one gets full first'!
Thanks to everyone for your contributions to my question.
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Permalink Reply by kittycatmama on
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Jay, last fall an encana person told me that the Bossier was in 14/14 Desoto. Also in Sec. 8 of 16/14 (Caddo), a friend of mine who has acreage there said that Chesapeake had applied for the Bossier and Haynesville in that section. I don't know how to get that confirmed, but it may show on DNR.
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Permalink Reply by DJG on
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CHK's Jan 2010 Investor Presentation is in the attached document.
Page 11 - Attachments:
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Permalink Reply by DJG on
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And for some additional balance, here is the Jan 2010 presentation from Devon in the attached file....
- Attachments:
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