Replies to This Discussion

Permalink Reply by Les Bamburg on June 11, 2009 at 2:59

Skip, units do not necessarily translate into wells. The permit for one of Diamond's wells expired in April.

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Permalink Reply by Skip Peel - Mineral Consultant on June 11, 2009 at 3:07

Les. I'm aware that units don't translate into wells. Just look at Samson Contour. They have over 100 unit applications and, last time I looked, 3 HA wells drilling. They may have some additional permits by now but they are certainly not rushing to put a well in all their units. And a number are not legacy leasehold held by production. Diamond may not drill another well in their units but I wager that HK will in theirs.

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Permalink Reply by Les Bamburg on June 11, 2009 at 4:05

Skip, it depends if there is any expiring leasehold in their unit. Even if there is - Petrohawk may drill a vertical well for science (ie full core). At this depth and pressure I would guess they could knock one down in 20 days for say < $2MM.

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Permalink Reply by Skip Peel - Mineral Consultant on June 11, 2009 at 4:19

Certainly a possibility, Les. Unless I miss my guess, much of their leasehold in this area of the play is recently acquired so there is no rush to drill from that standpoint. HK is moving forward with development to the south and a test well to the immediate north would be a logical step before committing any capital to infrastructure in that area.

Permalink Reply by Skip Peel - Mineral Consultant on June 11, 2009 at 3:24

The north Caddo wells had both lower porosity and lower permeability in comparison to wells in the core area of the play. Permeability can be address to some degree by the design of the frac. The porosity can not.

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Permalink Reply by Les Bamburg on June 11, 2009 at 8:32

Skip, I think the real issue is pressure and quartz content. The low quartz and high clay content make the shale less brittle and more difficult to fracture. Lower pressure reduces the initial IP rate and the original gas in place.

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Permalink Reply by Les Bamburg on June 11, 2009 at 3:36

Skip, the following two wells have been drilled in the Bellevue Field but there has been no test flow results:

Diamond Oil, Oxy 11 #1 Well, Serial #238690, S11-T19N-R11W
Diamond Oil, Lodwick 35 #1 Well, Serial #238990, S35-T20N-R11W

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Permalink Reply by Skip Peel - Mineral Consultant on June 11, 2009 at 3:42

Les. I'm aware of the Diamond wells. Diamond reminds me somewhat of Southern Star. They both tout their HA prospects but don't appear capable of development. They seem to be advertising for a jv partner. Or some investment capital. It's just a tough time to accomplish either of those tasks.

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Permalink Reply by Taylor on June 11, 2009 at 3:47

What caught my attention was Petrohawk's NE movement at this particular time-- maybe they will drag their feet, but so far Petrohawk has drilled what they said they will drill. Has PK let any permits expire in the HS? Just hoping for good news this way!

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Permalink Reply by Les Bamburg on June 11, 2009 at 4:01

Taylor, the issue is Petrohawk has not permitted a well in this part of the play. Currently there is only one permitted well by Diamond.

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Permalink Reply by Taylor on June 11, 2009 at 4:32

Les, Wrong wording--I apologize for getting ahead of myself. PH has submitted the paperwork for a unit in this part of the play. I just think Petrohawk will not "play" with the paperwork like Samson has. If they have in the past, please feel free to let me know as I'm still trying to learn all I can. Thanks!

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Permalink Reply by The_Baron on June 11, 2009 at 8:20

Hk is probally just looking to drill a test well...they probally won't file for a permit until closer to the hearing if not after.

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