Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on February 9, 2024 at 15:51

Scott, this is news to me.  New leases for existing wells of any type/formation is something I have not dealt with and find curious.  I also don't understand how a common vertical Pugh clause would force an operator to take a new lease.  To be clear, are you thinking that Chesapeake intends to drill new Hosston and CV wells?  Would these be horizontal wells where only vertical wells exist?  I also don't understand your mention of getting better at drilling "tight natgas".  I'm unaware of any Hosston production that would be considered tight.  There are some horizontal CV wells that could be considered tight but I think the difference is one of permeability.  Good perm, vertical completions are preferred.  Poor perm, horizontal completions required.  There are plenty of Hosston and CV wells shown on SONRIS depending on location.  Can you give an example by section-township-range?  If there are no existing Hosston and CV wells in the specific area, that will tell us something.  I'm going to ask Rock Man to weigh in on the geology ramifications but I think we would need an experienced O&G attorney to explain the need to execute new leases for those formations.

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Permalink Reply by Rock Man on February 10, 2024 at 10:13

I need some more info before being able to comment. Vertical wells with Pugh clauses will be holding rights from surface to 100-200' below deepest production.

Unless there is a unique original lease that also contained a shallow Pugh clause that limited HBP interval to a "window" of section associated with the actual production.

Looking forward to more details on this - including location

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Permalink Reply by Scott Walberg on February 10, 2024 at 13:15

Thanks Skip and Rock Man for responding.

Yes, Chesapeake has reached out for a new lease for the CV and Hosston zones. I have no idea if these are to be vertical or horizontal but our attorney suggested limiting them to existing pad sites. This implies using existing wells but I'm not sure.  

My "tight gas" comment was from my limited research that these were not as economical to drill and I thought CV and Hosston were in this category. Thus my comment they must be getting better $$ at extracting/drilling for tight gas.

Can they drill vertically or horizontally from an existing well? I'm curious as to the process since these zones are shallower and require a lot of fracking (per my very limited research).

We were fortunate that the lease, drawn up in 2007, reads as follows:

If this lease is extended beyond the primary term or other means for 5 years beyond the primary term, Lesee agrees to release all depth horizons covered by this lease that are not in production or completed and capable of production at the end of said 5 year period.

We are in Sec 25T12N R13W

I only found access to sonris through this url; https://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_allpmtwels2

I get an error code every time but if i try again, it goes through. Its a well permit by date.

Is there a better way on Sonrus to track permits?

How do you tell its CV or Hosston well on Sonris?

Thanks again. I appreciate your feedback!

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Permalink Reply by Rock Man on February 10, 2024 at 14:48

Looks like a great lease for that time period.

I will be looking at location and responding later.

I am no SONRIS experts - I live off ENVERUS (pay site) which is easy to find permits new or old.

CV or Hosston well depends obviously on depth - and oftentimes, the "target zone' is not noted anywhere. One may find some comments on completion forms, but easier way is to know the section based on log control.

Geologist magic! LOL

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Permalink Reply by Rock Man on February 10, 2024 at 15:04

Looked at ENVERUS - lots of historical Hosston vertical production in this area / the term "Hosston" or "Hoss' tends to be in the well / unit name.

• Only saw one Hosston well that is still producing / all others plugged out

Drilling Horizontals and frac'ing Hosston makes sense in part of the section.

• This has been done in the Travis Peak in some areas of East Texas
• Wells will just make a lot of formation water, however.

Aside from that, approximate formation tops here are:

• Rodessa @ 4850
• James @ 5400
• Pettet @ 5800
• Hosston (or Travis Peak) @ 6300
• Cotton Valley Sand @ 9500'
• Bossier @ 10,600'
• Haynesville @ ????

CHK has an active rig in this section - spud the Wansley 25-12-31 on Feb 6th.

• That is the only permitted well in this section over past 12 months.
• Vertical well permitted to 13,000' in the Haynesville.
• May be mix of science well and microseismical monitor well.

CHK also has a SI lateral that cuts thru this section / drilled 2nd half of 2023. This lateral has TVD of 11,700' to 11,800' (Haynesville?).

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Permalink Reply by Skip Peel - Mineral Consultant on February 10, 2024 at 15:09

Scott, many times the reason for a SONRIS error message is the use of a pop up blocker.  If you have one, disable it for SONRIS.  That is an interesting depth clause but my bigger question is why Chesapeake seems to have interest in HOSS or CV rights in this specific location.  Chesapeake was a CV driller prior to the advent of the Haynesville Shale play but has not drilled any shallower formation wells since as far as I recall.  I'll post a SONRIS link below for a Search By Section-Township-Range.  Leave the section box blank and just fill in 13N and 12W.  That brings up all sections in the township then scroll down to Section 25.  Note that there aren't many HOSS wells although Pinnacle Operating does have one producing.  Keep in mind that every entry in blue is a link that will take to additional database data.  Suggest you explore the data by doing that.

https://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_sectwnrng1

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Permalink Reply by Skip Peel - Mineral Consultant on February 11, 2024 at 4:22

Scott, your situation is interesting and we would appreciate any further details you can share.  Can you identify the "test well" that Chesapeake (CHK) drilled that you associate with the company's interest in the Hosston and Cotton Valley zones?  At a guess, I would think that CHK thinks that both formations are sufficiently tight in your area to be economic with horizontal well development.  Now here is a question for Rock Man.  Any existing pre-Haynesville Shale gathering systems would likely be low pressure,  small diameter lines.  Would horizontal HOSS and CV wells be compatible with those systems?  Would those older systems require upgrades? Or would those HOSS and CV wells be compatible with the high pressure Haynesville gathering systems?  Wouldn't both formations create produced water challenges?  Considering the large number of remaining undrilled well locations for both Haynesville and Mid-Bossier shale wells, why would CHK want to create increased supply concerns in a low price period?  Scott, your family obviously had an experienced O&G attorney when that vertical Pugh clause was inserted in your lease.  I think you should be talking to that attorney or another is he/she is no longer available.  I can refer you to my O&G attorneys if you need help.

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Permalink Reply by Scott Walberg on February 12, 2024 at 12:08

Skip, the test well coring was likely done with Wansley 25-12-13 #1 back in August /Sep 2023 not 2 years ago as I previously mentioned.

Your questions are professional versions of mine; ie how do they use existing wells, vertical or horizontal, etc, etc.

The original attorney is long gone and we do have a new one. I believe the original attorney was Jack Gamble Jr. I would like to know who you would refer though.

 Thanks all!

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Permalink Reply by Skip Peel - Mineral Consultant on February 12, 2024 at 16:07

Chesapeake currently has a rig on the Wansley 25-12-13 #1 in Section 25.  That may be a test well as it is a vertical permit.  We don't see many of those these days but it could be useful for logging and coring the HOSS and CV sections there.  Chesapeake can always amend the permit to go horizontal.  The previous Wansley wells were all horizontal completions with the exception of the Wansley 25&24 #2-Alt which experience mechanical problems in the vertical section and was Plugged & Abandoned 1/9/2023.  The simple answer to the question of what type of well to drill is that formations with sufficient permeability and porosity (conventional reservoirs) are drilled with vertical wells.  When the rock has low permeability, a horizontal completion with hydraulic fracture stimulation is required (unconventional reservoirs).  I do not recall any horizontal Hosston completions but there are areas where CV vertical wells work and areas where horizontal wells are required because the rock is too tight (low perm).  Yeah, Jack Gamble Jr. could very well be the source of that Pugh clause.

I have used all the attorneys at Davidson Summer APLC in Shreveport.  The firm has a lot of O&G/Mineral clients but is somewhat unique because they do not represent the industry.  They specialize in representing land and mineral owners.  The firm has dealt with and sued Chesapeake on multiple occasions.

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Permalink Reply by Steve P on February 11, 2024 at 11:17

I have the same vertical Pugh clause as Scott.  All rights except for the HA were released after the primary term.

Pinnacle drilled a Hosston well, I think in 24-12N-13W, back around 2006, that had an extraordinary unit configuration - quarter sections from 4 contiguous sections.  Previously, 30 years ago, Jeems Bayou had a Hosston well on Mamie Rascoe's property, maybe Section 14, that produced for many years. 

It will be shocking (and wonderful) if there's a productive CV formation in this area.

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Permalink Reply by Skip Peel - Mineral Consultant on February 11, 2024 at 17:25

Any idea who the attorney was that used that specific depth clause?  It may not be as rare as I first assumed.

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Permalink Reply by Steve P on February 12, 2024 at 6:36

don’t know.  My brother had it and used it in all of our leases.

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