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Permalink Reply by Real Simple on April 28, 2018 at 7:58

That is certainly my hope...would like to see an organization with past experience in the Cotton Valley...May be Nadel Gusman

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Permalink Reply by Skip Peel - Mineral Consultant on April 28, 2018 at 8:22

Nadel & Gussman might like to operate the Terryville Complex but I think it is too big a bite financially without some capital backing.  N&G is currently drilling their last live CV permit in Lincoln Parish, there are no others at this time.  Most of what I have noticed N&G doing lately is related to the Haynesville Shale.  It is easier to drill and a lot of open acreage is now seen as economic.  I expect they will drill in Caddo Parish in the near future.

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Permalink Reply by Real Simple on April 29, 2018 at 13:07

In your opinion, how likely is purchase of the Terryville field and/or other assets from Range? Do you think at a 4.4 billion dollar price point the asset that Range purchased worth that price, Or will they have to accept a much lower offer to sell? Memorial was turning heads with some of their completions right up to the sale...Range managed to shed a bad light on the prospect of the Terryville field.

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Permalink Reply by Skip Peel - Mineral Consultant on April 29, 2018 at 13:30

I think Range's poor performance has materially depressed the value of their north Louisiana leasehold.  There are several problems.  We need to keep in mind that the CV sands in Lincoln are tight but conventional reservoirs meaning they are not consistently productive over a large areal extent like the shale.  Attempts to expand the economic area have not been a success to date.  The core of the Terryville Complex is highly developed and recoverable hydrocarbons are largely depleted.  I'm unsure of how many dependable new locations exist for horizontal wells. 

MRD/Wildhorse's attempt to expand the Terryville footprint to the east was unsuccessful.  I think part of that failure is the fact that the horizontal wells drilled in the Choudrant Field lack liquids and are less productive as to gas.  In a period of prolonged depressed natural gas prices, this is a problem.  The MRD/Range attempt to expand the economic area into Jackson Parish seems to have been unsuccessful and Range is no longer drilling new wells there.

I am not a geologist nor reservoir engineer so you can take my opinion with a grain of salt.  It is informed by following new spacing and unit applications and well permits.  Not long ago Range was running four rigs and they are now down to one.  Subtracting the well being drilled now, there are 8 live well permits with several expiring in June.  Everything I see leads me to believe Range is winding down its drilling program while it markets its assets.

The one unknown that may have some potential value for a new operator might be the rock under the city limits of Ruston.   There are few wells drilled further south than the northern suburbs of the city.  If that rock is good and there is a way to develop it, that might be enough to attract a buyer.  As time goes on, I think the perceived value of the Terryville Complex is moving lower.

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Permalink Reply by Bradley McWilliams on May 12, 2018 at 1:25

Sorry, I'm a little late to this discussion. I thought MRD or who ever they were had a hugely successful operation there. This turn out to not be true?

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Permalink Reply by Skip Peel - Mineral Consultant on May 12, 2018 at 2:15

MRD, and Wildhorse before them, had very successful wells as long as they were drilling in the Terryville Complex (Terryville, Hico-Knowles and Ruston fields).  Neither company was successful in expanding the economic footprint outside of that limited area.  Wells to the east in the Choudrant Field were below the Terryville average in gas and liquids as were the wells to the south in Jackson Parish.  As we have mentioned on numerous occasions, the Terryville Complex is not the shale.  It is a conventional reservoir, not an unconventional one although it is "tight", low permeability.  Therefor it is limited in its areal extent.  The good rock in the Terryville Complex has been drilled.  Step out wells have been a disappointment.  If Range finds a buyer, it will likely be at a very deep discount to what they paid.

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