Replies to This Discussion

Permalink Reply by JeffNParis on December 21, 2010 at 3:56

Yes, Les B. I was just referring to your post about many units getting multiple additional wells. Just wondering where that was happening. I assume a lot is happening in Desoto because of the higher mmcfs. Guess it's too early to tell how that will ripple out to the rest of us.

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Permalink Reply by Les Bamburg on December 21, 2010 at 3:47

SB, just realize some of these "oily" plays are really NGL and condensate plays and still produce significant natural gas (Eagle Ford Shale, Granite Wash, Cana Shale, etc).

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Permalink Reply by Dion Warr, CPL on December 16, 2010 at 11:47

Cocodrie:

 

I would point out that Dr. Scott's statements probably reflect a "big picture' economic POV which would take in all phases of E&P in the HS Area.  The direct investment in the area has already starting to reflect a downturn in activity (rig counts have peaked, leasing activity has been off since 4Q '08 with some infill leasing going on in certain areas and other local hotspots thru '09-'10, and of course bonuses have been down significantly from their 2Q-3Q '08 highs).  The trickledown from that activity will also draw down the local economic activity (less influx labor means less spending in local economies as their dollars travel elsewhere, less bonus monies results in less spontaneous purchases of goods, etc.  Also, as the play becomes more production and royalty driven rather than leasehold acquisition/HBP driven, many owners and residents will begin to budgetize their income, and look to pad their personal households against the stagnating or moderately improving economic conditions (ie, paying down or paying off debt, saving, etc), which in the short to moderate term will not serve to increase local and regional economic activity.

 

On the E&P side, after the HBP phase is more or less complete, drilling will become more governed by supply and demand, and wells will be drilled either on strictly economic merits or to preserve leasehold.  With gas spots in the 4's and oil spots in the high 80s, NGL-rich plays (e.g., Eagle Ford, etc.) make more sense right now.

 

That's not to say that everyone is going to pull up and leave town anytime soon - far from it; however, what we will see (my POV) will be an economically efficient drawdown of the reserves over an extended period of time.  In light of that, any comparison to the previous three years of surge of activity is going to seem less than enthusiastic; but it doesn't change the reserves in place, which as they are drawn down and reduced to possession, the proceeds will work their way into the economy in the long term.

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Permalink Reply by ken hatcher on December 16, 2010 at 12:23

Look who won the elections, see who supported who. Look who the coal lobby backed. The EPA is already easing up. Some things may never change.

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Permalink Reply by Clyde T. Williams on December 16, 2010 at 12:32

Remember where BO came from - coal yes...but the same groups doing shale gas usually does coal seam gas.  Today there was a CO2 coal cleaning and underground storage webnair presentation...for us techies...bottom line the coal plants are getting ready for CO2 regs and are being supported by both sides of the aisle earmarks for developing a cleaner coal system BUT it is going to be expensive and will drive the delivered power costs from coal to gas but NOT FOR 5-10 years, not this month or even this new years....

The text is becoming too techie for me and I am going to take my nap...

Tom 

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Permalink Reply by Judy Jones on December 16, 2010 at 12:26

Why is nobody discussing the Cheniere plan to start processing LNG and shipping it to Latin America and Asia?  They already have approval to sell to countries that are trade partners and are seeking to sell to anybody.  Encana has given letter stating they stand behind Cheniere to try and get the necessary gov't. ok.  This could help the demand/supply situation immensely, seems to me.

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Permalink Reply by John Michael McConnell on December 16, 2010 at 13:13

Here are three problems with the esteemed economist's opinion:  Weather, economy, and politics.  First, he can't predict the weather, not next week and certainly not next year.  Extreme temperatures in either direction will result in more gas usage and less storage volumes.  Secondly, the economy, no one can predict when it will turn around and it appears to be trending upward as of late.  That will mean more factories building more products; factories use lots of natural gas.  Lastly, politics can change everything.  Nothing Washington does at this point will hurt natural gas prices, but if they continue down the "green" path with a clean enery bill that punishes coal users, the usage and price will spike.  Sounds like the professor wasn't fortunate enough to still own the mineral rights on his land and is trying to rain on the parade........

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Permalink Reply by Landman of the Apocalypse on December 17, 2010 at 5:49

We should remember that Scott, being in South Louisiana, has a bias toward offshore drilling.  If you google his name and "moratorium," you will see that he has ballyhooed the economic disaster which the moratorium would cause.  Evidence thus far suggests that his predictions, along with those of others from LSU, are unfounded.  Nevertheless, to entertain that onshore production could rise successfully to supplant (or at least significantly reduce) the need for offshore would disrupt his great chain of being.

 

Now that "Big Oil" has entered the Haynesville in a big way, there is some hope that federal energy policy will sensibly move towards replacing diesel and gasoline with CNG.  One can only wonder (says LOTA with tongue planted firmly in cheek) why Scott, Jindal, and other state leaders do not more forcefully advocate for replacing offshore  with onshore production.  This would create more state revenue and more jobs in Louisiana.

 

But hey, I'm a landman, not a seaman.

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Permalink Reply by Marc Schulz on December 17, 2010 at 9:32

Predictions, particularly from Economists are only predictions. In fact, there were very few predictions that predicted the onset of the Haynesville Shale. So, by rights, if they couldn't predict the success, how can they predict the future.

Read "The Black Swan" to get a valid opinion of predictions. It is applicable because, in my opinion the Haynesville is a "Black Swan" to begin with.

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