Replies to This Discussion

Permalink Reply by Alan W on March 5, 2009 at 22:53

It's going to be like selling refrigerators to the Eskimos around here. They should leave it in the ground and let the current leases expire for a second round of bonuses!

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Permalink Reply by CB on March 6, 2009 at 1:36

Hate to rain on your parade, but days of hjgh bonus for this play is over. This shale play is uneconomical unless nat gas $ is over $8. Decline rates are very high, well costs high, water availability low, and pipeline problems among other things doom this play at the present time.

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Permalink Reply by Bobi Carr ("parker") on March 6, 2009 at 2:00

CB,

Petrohawk stated in their last conference call that they are making money on the HS EVEN at $4.00.

I agree we would all prefer $8.00 or above but tell me one sector that is doing as well as they were last year. It appears to me that things are tough right now for most entities.

I have faith that we will pull out of our present economic problems.

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Permalink Reply by adubu on March 6, 2009 at 2:18

most E&P cost to drill and produce NG is in the $1.50-$2.75 range. Revenue not great at $4 but enough that the primary core 1 area of the play thru out NE La. and East TX will be drilled at least one well per unit to HBP the leases untill the future market improves and who know when that maybe. Next few years or next decade??? Just think crude was below $10 and NG $1 in 1999. Great wealth for lots of people was made when unbelivable NG trader above $5-6 in 2001. Unless the USA is converted to total socialism by Obama the play will return and lease bonus in 500-1000 range will be paid but area limited to core. The money will be made over time by good lease terms and royalty in 20-25% range producing great "mail box" income for years. Drill cost will decrease in next 1-3 years when all the long term contract expire and rig have been laid down for time. So if your lease expires and you are in core be patient and not greedy sign with E&P that has strong balance sheet and know how to drill a H well like EOG HK CHK CRK XTO DVN,etc I understand this list could change and some of these E&P maybe merge to survive

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Permalink Reply by herefordsnshale on March 6, 2009 at 3:08

Which parishes and counties would you call the core area?

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Permalink Reply by Catfish on March 6, 2009 at 3:34

http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3m.htm

I got this link off of the East 80 site looks like the gas price has always been fairly stable and gradually increased over years. I think the industry does a good job of managing this and we should expect this to continue with few big swings like we saw in 2008.

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Permalink Reply by Les Bamburg on March 6, 2009 at 4:33

Catfish, if you are interested attached is a graph of the historical Henry Hub gas price for the past nine years.

Attachments:

• Henry Hub 3-6-09.pdf, 79 KB

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Permalink Reply by Bobi Carr ("parker") on March 6, 2009 at 3:40

herefordsnshale,

I pulled up the Questar report. Great map in the report.

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Permalink Reply by J. A. on March 6, 2009 at 3:48

where's the link?

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Permalink Reply by Catfish on March 6, 2009 at 3:52

http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3m.htm

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Permalink Reply by Bobi Carr ("parker") on March 6, 2009 at 3:53

I just pulled up the discussion that was posted by Earl.

Lazy this morning, sorry.

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Permalink Reply by J. A. on March 6, 2009 at 3:56

I See it now- Sorry I am still asleep????
Thanks Catfish and Parker

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