Replies to This Discussion

Permalink Reply by Les Bamburg on August 30, 2009 at 6:57

AL, I will say 30-50 years to drill ~ 20,635 wells in Northwest Louisiana.

• ▶ Reply

Permalink Reply by Jaybird on August 30, 2009 at 7:55

If this works like the price is right showcase...and I'm still alive...I am going with 31-51 years to drill - 20,636 wells in Northwest Louisiana. :o)

• ▶ Reply

Permalink Reply by Parkdota on August 30, 2009 at 8:29

If they are drilling on an individual's property right now and say they hit an average to average plus well what time frame might it be to get to the other 6-7 potential wells assuming prices are decent/good? I was guessing a new one being drilled every year or so. Maybe it would take around 16 years +/- to drill them all?

• ▶ Reply

Permalink Reply by BirdDawg, plain ole' idiot on August 30, 2009 at 9:30

Logan,
I think you are being extremely optimistic. In most areas it will probaly be several years before alternate unit wells are drilled. Granted some units are already getting their second well, but I believe this is the exception, not the rule. There are too many units that need to be proven, and not enough market for the gas at the present. Just my opinion, put a nickle with it and you will have a nickel.
Check Les B's comment at the top of the replies, he knows of what he speaks.

• ▶ Reply

Permalink Reply by Parkdota on August 30, 2009 at 10:39

Yeah, I had the same thought as you. I think a lot of it depends on so many variables with some being price (biggest), proven (maybe just as important if not more), company one is with, where your minerals are located in the play, energy legislation, demand, economic factors, hedging, etc. I've tried to study this thing to death and in some findings there is pessimism and in some there is optimism, so I really don't know. I do know that there is a mad rush to retain/prove wells so it would stand to reason that in the next 2-3 years there could be a move to drill the alternate wells as prices are predicted to get better, although I don't know how much of an effect, if any, extensions will play in to this theory. If it does take a long time many of us may not be around for the full show.

• ▶ Reply

Permalink Reply by little ole 1st grade teacher on August 31, 2009 at 3:26

If it does take a long time many of us may not be around for the full show................
Oh, don't say that.....I need some money to retire on.......I can't draw Social Security (not even my husband's) because I am a teacher....I only have TRS which is not a whole lot....
I guess TRS is better than nothing.....and I'll keep hoping and praying.

• ▶ Reply

Permalink Reply by Parkdota on August 30, 2009 at 13:05

Well, if they hedge correctly then poor prices aren't as big an issue. Many companies are making a KILLING right now due to the difference between prices and what they hedged which was aided by the 2008 heightened price era. Many of these companies have also hedged well through 2010. The interesting thing is going to be when they get the opportunity to set new contracts. I would imagine these contracts will come down significantly. From what I can tell, though, many companies hedge around 50% of their production and 50% not to insulate themselves from price ranges from 2008 to current. In 2008 you sold what you didn't hedge but now you sell what you did. Maybe they can make good money either way. However, I believe the poor current prices will affect these hedge contracts which will have an affect on their potential returns for a long time. Basically, I think they can make money either way but how much is the question. Will it be enough to drill all the wells in a section? It's so complicated that I suppose only time will tell. It drives me crazy.

• ▶ Reply

Permalink Reply by BirdDawg, plain ole' idiot on August 30, 2009 at 16:05

If an operator has a large number of units they need to drill, then even higher gas prices will not be enough reason for them to drill all of the wells in a unit.
Perhaps a smaller operator may drill more unit wells quicker, but I doubt why at the current prices.

• ▶ Reply