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Permalink Reply by Skip Peel - Mineral Consultant on July 8, 2013 at 3:20

Township 13N-12W: Section 7

Township 13N-13W: Sections 1, 3-6, 8-10 & 12

Township 13N-14W: Section 1

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Permalink Reply by Henry on July 8, 2013 at 12:11

It looks like they are planning for a total of 6 wells/section in those sections they got from CHK.  We always hear about 8 wells/section for Haynesville sections.  Do you have any thoughts on why XCO thinks 6 is the right number?

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Permalink Reply by Skip Peel - Mineral Consultant on July 8, 2013 at 12:25

Not the slightest.  XCO can always go back to the state in the future to down space.

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Permalink Reply by jffree1 on July 8, 2013 at 14:28

Henry,

I know that Exco has done spacing tests in Nacogdoches Co. and I feel fairly certain they have done similar tests (5,6 wells vs 8 wells) in La. so they probably decided that six wells would do the job. Why spend an additional $20+ million if you don't have to and can still recover about the same volume of gas?

If, as Skip said, they want to add wells later they can still do that.

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Permalink Reply by kittycatmama on July 9, 2013 at 15:11

Skip, do you think Exco is going to do 6 wells per section in sections they already control in Desoto Parish

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Permalink Reply by Skip Peel - Mineral Consultant on July 9, 2013 at 15:53

I don't know.  For other operators the trend seems to be toward CULs (Cross Unit Laterals).  EXCO could have a different take on how to produce the most mcfs for the lowest cost by drilling 6 instead of 8 wells per unit.  Pressure pumping technology may provide the ability to create larger frac cylinders which would make fewer wells possible.  We see little in the way of public statements regarding frac design other than number and length of frac stages and volumes of water and proppant.  State set back requirements are based on a theoretical frac cylinder radius of 300'.  The brittleness of the shale would also be a significant factor and we now know that it varies across the basin.

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Permalink Reply by kittycatmama on July 9, 2013 at 18:29

I wonder when the applications to the state will start showing up? I can't remember reading when the whole CK to Exco deal is due to close

 

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Permalink Reply by tc on July 10, 2013 at 1:39

It depends on whether EXCO adds 3 more rigs to the Haynesville.  The CEO in the conference call was hedging that call, but I think he wants to add the rigs.  I think the deciding factor will be financial and whether their Haynesville partner, BG, takes a stake in the new acreage and what price they get for their TGGT asset they are trying to sell.

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Permalink Reply by Bailey on August 6, 2013 at 10:03

I have minerals in the red sections and was contacted by a surveying company.

If Exco moves forward she said I will be contacted by a landman.

Dumb question: Is this a chance to negotiate a new lease?  What about the existing lease with CHK?

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Permalink Reply by Skip Peel - Mineral Consultant on August 6, 2013 at 10:16

The existing lease remains in force and will be assigned from CHK to EXCO.  EXCO as successor to CHK must honor all the terms of your lease.

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Permalink Reply by tc on August 6, 2013 at 10:26

This statement from EXCO earnings call.  Haynesville shale acquisition - "Our  development plans are to run up to three additional drilling rigs in  manufacturing mode on recently acquired drilling locations by the end of  2013."  Good/Bad news depending on your opinion of drilling at such low NG prices.

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Permalink Reply by john goodday on August 7, 2013 at 4:18

With rapidly retreating Nat. Gas prices ($3.25), EXCO & KKR will need alot of luck to make these wells profitable. Break even number after royalty is 5-6 BCF - not sure what EXCO has left after that!

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