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Permalink Reply by Bobi Carr ("parker") on February 4, 2009 at 22:05

Petrohawk seem to keep posting those BIG numbers.

It makes you wonder what they are doing that is so much different than the others.

Will those longer laterals pay off in the long run?

And what if they decide to produce with those long laterals and drill 8 wells per section.

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Permalink Reply by Jay Murrell on February 5, 2009 at 1:32

Completion design has improved as more wells have been drilled. Exco has done pretty well too. See Oden Heirs well in Section 30 (14-13)

Current thinking is that it will take up to eight laterals to completely develop a governmental section.

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Permalink Reply by VSC DeSoto South on February 5, 2009 at 8:16

How long would it take to full develop 8 Wells per section?
1 year, 5 years, 10 years, longer?

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Permalink Reply by Jay Murrell on February 5, 2009 at 8:48

I'm buying proven undeveloped reserves here.

I don't really care how long it takes to develop because the asset (natural gas) is probably going to be worth more next year than it is today.

You should talk to your investment advisor.....I'm not one. I'm just an oilman.

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Permalink Reply by Bobi Carr ("parker") on February 5, 2009 at 9:15

Jay,

Are you buying for yourself or for a group of investors?

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Permalink Reply by Jay Murrell on February 5, 2009 at 10:22

For myself

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Permalink Reply by Jay Murrell on February 5, 2009 at 5:52

I am a landman in Shreveport, LA. with 30 + years of experience in the exploration and production business in NW Louisiana. I know the geologist that generated this prospect. I know the reservoir engineer that made the volume projections in the press releases.

We have and old saying that pertains to the relative veracity of statements made by certain individuals.

For example, a person with little authority might be called “top water”, or “lite in the loafers.”

That is not the case here.

These folks are the real deal.

If these people say its Easter, I paint my eggs.

I’m painting eggs by actively buying MNLU


Sentiment : Strong Buy

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Permalink Reply by Jay Murrell on February 5, 2009 at 12:29

Then, there's the CV & HOSS:

PRESS RELEASE
Report Shows Proved Undeveloped Reserves (PUD) of 2.143 BCF Gas From Hosston/Cotton Valley Zones on Mainland Resources' First Desoto Parish, Louisiana Well


Last update: 9:15 a.m. EST Dec. 16, 2008
HOUSTON, Dec 16, 2008 /PRNewswire-FirstCall via COMTEX/ -- Mainland Resources, Inc., a Nevada corporation (the "Company") (MNLU:mainland res inc com
News , chart , profile , more
Last: 5.68+1.68+42.00%

3:59pm 02/05/2009

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MNLU 5.68, +1.68, +42.0%) reports that it has received a Reserve Report prepared pursuant to U.S. Securities legislation by T.W. McQuire & Associates, Inc, Petroleum Consultants based on data from its Griffith 11 #1 test well currently being drilled.
The Reserve Report places Ultimate Recovery for the Hosston Package at 1265 MMCFG and for the Cotton Valley Package at 878 MMCFG, for a total of 2143 MMCFG (2.143 Billion cubic feet of gas) from a single future twin to the current well. This estimate is based on 40-acre well spacing.
Mainland Resources, Inc. holds a 100% working interest in all rights above the base of the Cotton Valley formation in approximately 2,695 net acres in De Soto Parish, northwest Louisiana. The Griffith 11 #1 is located in Holly Field, and will extend the field on the east flank. It is adjacent to producing sections located to the north and west, and is the first and only Hosston/Cotton Valley well drilled in Sec 11-13N-14W.
The Hosston and Cotton Valley wells are being drilled on a 40-acre spacing. One unit equals 640 acres (or one section), so there could be up to 16 wells drilled per 640 acres. This approach has been successful in the adjacent Holly Field and the nearby Bethany Longstreet and Kingston Fields. Sections of the Holly/Bethany Longstreet/Kingston Field areas that do not have 16 wells drilled are expected to eventually reach that number of well density. Earlier wells were only drilled to the Hosston, therefore, there are numerous infill wells being drilled to the Cotton Valley depth (which is immediately below Hosston).
Company President, Mike Newport states, "This Reserve Report places the Total Proved Undeveloped Reserve at 2.143 BCF gas for a single 40-acre spaced well on our DeSoto Parish Leases. That's currently worth approximately USD $10,715,000, based on $5 gas pricing. Mainland's net revenue interest is approximately 75% covering our leasehold, which would net a potential $8,036,250 profit per well, less the applicable drilling/completion costs and production costs. There is room for at least 64 such wells on our leasehold interest, which calculates out as a potential profit of $514,320,000, less applicable drilling/completion costs and production costs from the Hosston/Cotton Valley formations alone." Newport adds, "There is no guarantee that the Company will achieve any such results or profits and the figures provided herein are estimates of management based upon analysis of the data."
"This development is important because it gives our current reserves significant value, regardless of the Haynesville shale gas production, which is the next target we are drilling to," states Newport. "

One more thing..............

The McQuire firm is known to be VERY conservative. (They press their underwear...:-)

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Permalink Reply by Bobi Carr ("parker") on February 5, 2009 at 13:14

Jay,

Based on the released information, what would the EUR be per section in this particular field?

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Permalink Reply by Jay Murrell on February 5, 2009 at 14:10

What's EUR?

JM

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Permalink Reply by Jay Murrell on February 5, 2009 at 15:18

2.1 Bcf per well on the CV/HOSS duals on 40 acre spacing over 2700 acres. ....do the math.

Who knows on the Haynesville...reservoir is new ... I have no idea, check the engineering data available form Deutch Bank and others.

Return is pretty front loaded...IP's are high but decline curve is steep

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Permalink Reply by Bobi Carr ("parker") on February 5, 2009 at 15:21

Why are you buying if you have no idea of the return on your investment?

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