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Permalink Reply by sesport on July 19, 2009 at 16:48

Les - That's a lot of units applied for compared to the number of wells spudded. Is there a backlog of unit applications?

Thanks :0)

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Permalink Reply by Les Bamburg on July 19, 2009 at 18:32

Sesport, the majority of those units have been approved but there continues to be additional applications. Using an average of 640 acres per unit these units would cover ~ 868,000 acres which is probably less than 50% of the Haynesville Shale play in Louisiana.

In the southern portion of the play, there have been many units formed but very few wells permitted.

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Permalink Reply by sesport on July 19, 2009 at 19:06

Les - I guess what I'm wondering is whether enough wells can/will be spudded by current leasees to hold all those units? Or will we be seeing some of those listed at auction? Just seems like more units have been approved than current rate of spudding can catch up with.

thanks again :0)

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Permalink Reply by Les Bamburg on July 20, 2009 at 3:24

Sesport, just keep in mind a large percentage of the leased acreage was already held by production so no new drilling required. Also, the current drilling time per well has gotten shorter. This may allow a rig to drill 9 wells per year rather than 6. Based on 70 rigs this allows 630 wells per year or ~ 400k acres per year. It will be close but this may allow the operators to retain almost all the currently leased acreage. One indication of the attempt to hold acreage was EnCana's doubling of their 2009 capital budget to support their "acreage retainage" plan.

I do see some limited acreage expiration and/or auction because there are just too many leases expiring in mid-2010 in the southeast region.

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Permalink Reply by sesport on July 20, 2009 at 3:44

Much appreciated, Les & Jay. :0)

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Permalink Reply by Bobi Carr ("parker") on July 20, 2009 at 3:56

Les,

I just wonder how much of the 694 million from the Bonavista sale will be deployed in the HS by EnCana?

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Permalink Reply by Les Bamburg on July 20, 2009 at 4:22

Parker, I am going to guess a large part of these funds are going to debt retirement. But EnCana already plans to spend $580MM on the Haynesville Shale in 2009.

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