Replies to This Discussion

Permalink Reply by Les Bamburg on February 15, 2010 at 18:55

Parker, it was a good post and good to know what the pessimists are saying.

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Permalink Reply by Bobi Carr ("parker") on February 15, 2010 at 18:57

Thanks. I don't like to post things like this, but I'm always afraid I might miss something if they are right in any way.

I feel better when those with experience shoot them down.

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Permalink Reply by adubu on February 16, 2010 at 1:11

I think he must have a big short position in the stock market. These guys are all over the message board of different stocks. They cry the sky is falling in attempt to get the uninformed to sell.

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Permalink Reply by lerad skrap on February 17, 2010 at 13:25

>

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Permalink Reply by Henry on February 16, 2010 at 1:37

Parker,
Les B is right. It's always good to hear both sides of the story. One can get a bit overly enthusiastic by reading only the good news.

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Permalink Reply by Spring Branch,mineral owner on February 16, 2010 at 8:58

An analyst's flawed opinion can be left out as far as I am concerned. Just give me the facts and let me make up my own mind.

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Permalink Reply by Les Bamburg on February 16, 2010 at 10:08

Parker, I read a copy of the 2/8/10 Bernstein report and offer the following comments. Some of these will be repetitive to earlier comments by other posters.

1) Dramatically understates the size of the economic portion of the Haynesville/Bossier Shale play
- Excludes all the play in Texas including area where Devon tested a well at > 30 MMcfd
- Left out 18 townships in Louisiana that complied with their screening criteria which would have doubled the size in Louisiana
- Test results have not been posted for many recently completed wells
- My analysis indicates the economic portion of the play covers at least 47 townships in Louisiana

2) Much of the southern edge of the play area has not been evaluated and likely to be included once drilled

3) No consideration given to the Bossier Shale play that lies immediately above the Haynesville Shale in the southern region

4) Overly conservative and slated statements regarding well initial production rates with no consideration given to:
- Reduced rates related to infrastructure issues
- Operators (Petrohawk & others) experimenting with reduced IP rates to increase well ultimate gas recoveries
- “Other” operators (Exco, Questar, Comstock, Forest, El Paso, EnCana, etc) began with excellent test results and did not have to catch up. In fact, 12 different operators have tested wells at rates above 20 MMcfd over five different parishes and one county

5) There is some potential to further reduce drilling costs as operators eventually move into a pad development mode

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Permalink Reply by Spring Branch,mineral owner on February 16, 2010 at 16:54

Les, in addition to your above, well thought out comments, the Bernstein analyst indicated that he thought the frac improvement had gone about as far as it could. I would add that Comstock has just indicated that they are going to 16 stage fracs, and in a recent well this had added 25 % to the IP and significantly to the flowing pressure. Many, many, of Chesapeake's wells have ten (10) stage fracs. I have to believe that more frac stages and proppant will improve Chesapeake's results significantly. Additionally, in Texas, where the wells are not limited to the square mile boundary, the horizontal laterals will ultimately be well over a mile in length with who knows how many frac stages.

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Permalink Reply by Bobi Carr ("parker") on February 16, 2010 at 17:03

I'm looking forward to hearing the results from Petrohawk's Hamel well also since the unit encompasses 2 sections.

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Permalink Reply by DJG on February 16, 2010 at 18:35

There are already quite a few recently approved well permits here in TX where the laterals are upwards in the 7,000-8,000' range.

It's going to very interesting to see how these wells fair with respect to IP and EUR rates once they ultimately end up getting drilled and production put to sale in the not too distant future....

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Permalink Reply by Linda Blunt on February 17, 2010 at 2:45

Les,
Could you explain what you meant by pad development mode? Thanks in advance for your help?

LP

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Permalink Reply by Les Bamburg on February 17, 2010 at 4:01

Linda, currently most operators are drilling a single well in a section and then moving the rig to a new section. This entails a few days to rig down (disassemble) and rig back up at the new location.

In a pad drilling mode, when a well is finished the drilling rig is skidded a few feet and drills another well thereby eliminating the lost days in moving the rig. It is thought that there will be as many as 6-8 wells drilled from a single pad but we need to see if this actually occurs. There could also be efficiences gained in frac'ing and well hook-up in this mode.

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