I am curious to hear the opinions of anyone out there on how long you think it will take to develop the Haynesville Shale? In the core and maybe in tier 1 to get to 6 to 8 wells per unit? I know we only have a limited amount of information and nobody knows what will happen in the future in terms of gas price, productive areas etc. but take a swing at this just for fun. Also what affect will the multiple productive zones have on the overall length of the development of these areas? I think that the answers may be especially important for anyone who is being approached to SELL their minerals.
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?
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.
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.
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.
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.
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.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More