EnCana - Haynesville Shale Conference Call (11/7/11)
Attached is EnCana's presentation from their Haynesville Shale Conference Call.
Some points of particular interest are as follows:
Page 5 - EnCana confirms they discovered the Haynesville Shale in early 2006. This occurred with the drilling of three vertical wells (AF Walker #1, Martin Timber #1 & Adcock #1) in Red River Parish and contradicts Chesapeake's position they discovered the Haynesville Shale. EnCana plans to retain 250,000 net acres.
Page 6 - EnCana produced a record 200 MMcfd from a single section (S27-T14N-R11W) utilizing 10 new Haynesville Shale wells. The east half of the section was developed on 40 acre spacing to gather information for reservoir simulation work.
Page 9 - EnCana has begun utilizing a "slowback" completion process on some wells. This involves limiting the drop in surface flowing pressure to a maximum of 25 psi per day. EnCana is testing the development of some sections with 6 wells (106 acre spacing) utilizing larger fracture stimulation treatments.
Page 12 - EnCana is working to delineate the Mid-Bossier Shale and plans to drill 20 wells in 2011. Expect that EnCana will have 200,000 acres that will be productive in both the Haynesville Shale and Mid-Bossier Shale. The Mid-Bossier Shale trend extends into the Amoruso area in Robertson County, Texas. EnCana drilled the Hoyt 2H horizontal well in this area in late 2010 and the flow performance has been strong.
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Permalink Reply by Hopeful About Natural Gas on -
Skip,
Again thanks for the specifics of the drilling permits. I seem to recall my landman saying it was Petrohawk who announced the shale but that several companies were on the verge of announcing and PK jumped first. That's when lease prices really started skyrocketing.
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Permalink Reply by Skip Peel - Mineral Consultant on
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It was a crazy six months from April to September. A perfect storm. In September '08 Cadillac sales in Shreveport/Bossier were up 85%! And of the total Haynesville Shale economic impact for the eight months in 2008 of $1.3B (yes, that's a B as in Billion), $900M were direct payments to mineral owners in the form of bonus checks. Now that's economic impact!
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Permalink Reply by OnionLoops on
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Take a look at doc #2162041 from the Caddo Parish Clerk of Court. In particular look at Section D on page 2 where it states that CHK shall commence the drilling of a horizontal well to a depth sufficient to encounter the shale zone beteen 11,284 and 11,455 in the CHK SRLT 29-1 by June 15, 2007. To me, this horizontal well (SRLT 29-2) is when the true potential of the Haynesville was determined. As I understand it, the parties involved had to give up some of thier override, 3%, in order to get the horizontal well drilled in section 29 16-15. There's actually quite a bit of history going back well into 2004 that ultimately lead to the drilling of SRLT 29-2.
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Permalink Reply by Les Bamburg on
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OL, vertical wells with full cores and flow tests provide sufficient information to be classed as a discovery. As far as true potential, that didn't occur until multiple wells were drilled across the play in mid 2008.
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Understood. I'm just sticking with SRLT 29-1 (the vertical well) being the discovery well. And that SRLT 29-1 & SRLT 29-2 were not only the beginning of the Haynesville but the culmination of many years of work. Short of a pride thing, who cares which well was technically the discovery well. I'm pretty greatful for the end results. As I'm sure many on this site are.
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Permalink Reply by Les Bamburg on
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OL, I am sure EnCana may take exception since their verticles tested the Haynesville Shale almost a year before Chesapeake.
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Permalink Reply by Les Bamburg on
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Hopeful, the rumor was Petrohawk leaked the information before Chesapeake could get any more cheap acreage. The leak had little impact on EnCana/Shell since they had already acquired most of their acreage in previous years. Petrohawk did not realize at the time that the Haynesville Shale extended substantially to the south and southwest over open acreage or that good quality Bossier Shale existed in other areas.
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Permalink Reply by DrWAVeSport Cd1 on
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HANG,
LOL...Great storyline. I'd buy that book anytime! Don't reveal the "truck driver" just yet. You can work it into your "sequel." And, don't forget your movie rights! You could make more money off your "books" than your minerals.
Again, thanks Les B for the info, as always.
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Permalink Reply by Hopeful About Natural Gas on
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Les, thanks, that's the sequence of events I remember. It was Petrohawk.
Yes, who was that truck driver? And ... has Skip revealed if the two engineers were gay or straight? We have a better chance of a NY Times best-seller if they are gay.
Seriously, the April-Sept period was intense. Someday books will be written about the Haynesville Mania of 2008. It was really something to have a seat in the back of that fast car :)
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Permalink Reply by Robert Duke on
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Hi Les,
Thanks for this report. The two interesting things to me:
1) Seems that their Haynesville Shale maps have not changed much, and the Bossier Shale map looks roughly the same as the one put out by PHK roughly a year ago, right? I would also think that the Bossier Shale has gotten pretty well delineated by all the HS drilling, since they had to go through the Bossier to get to the HS?
2) They say they will punch 20 Bossier Shale wells in the next year. I guess if I were doing this, I would be inclined to drill in areas where HS has not been sufficient incentive to hold lease, but the Bossier Shale may be? I know this is more of a view toward investing in the future and delineating the best leasehold, as opposed to an immediate profits approach, and I also understand that these companies have to be careful to not get overextended.
I am of course always wondering what is happening in the area where I am leased - the SE corner of RR Parish; I'd appreciate any thoughts you might have on the Bossier Shale development though. That area still is mapped as "highest quality core" for both plays, despite "a bit of difficulty" with production in some of the HS wells.
With the acquisition of PHK by BHP Billiton, I have not seen any more interesting big tech releases by them, complete with great maps of the plays. Are they not doing this any more, or did I just miss them?
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Permalink Reply by Les Bamburg on
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Robert,
1) There has not been much reason to make any significant changes to their Haynesville Shale map. EnCana has always had a much better Bossier Shale map than Petrohawk since they have more data and their map has remained virtually unchanged from a year ago. They still need to drill and complete some Bossier Shale wells to properly assess the formation.
2) I believe EnCana just needs to assess both formations over their leasehold to tweak development plans.
Operators are focused on driving down development costs and will continue to be reluctant to release any detailed maps.
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