Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2018 at 10:36

Portions of Sabine have high treating cost for CO2 and H2S.  Also, the Haynesville is thinning as it enters Sabine.  So, economic Bossier wells may be the only economic pay.  Specific location is relevant.  Generally speaking, north Sabine is better.

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Permalink Reply by Mark Hughston on July 15, 2018 at 11:00

The Haynesville thins as the Bossier thickens. The Bossier has no H2S issues all the way to the southern most wells drilled today. The Haynesville is still thick enough to make excellent wells, but does have H2S to be dealt with. Both Vine an GEP are preparing to permit stacked laterals across all of 8N-12W with 5 or 6 7500 laterals in each unit. They will drill mostly Bossier wells first. They say that they can drill one Haynesville well for each 4 Bossier wells, and blend the gas without any additional infrastructure to treat the H2S. Watch the level of drilling down there over the next year. There has been no southern limit (economic) for either the Haynesville or Bossier. Both companies have proven up both zones in their southern most drilling.  all recent

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Permalink Reply by Skip Peel - Mineral Consultant on July 16, 2018 at 6:15

Mid-Bossier is the better reservoir in Sabine.  I'll reserve judgement on what is "proven" until there are more wells with longer production histories.  IMO there is insufficient data at this point.  I expect that there will be enough results to better define the southern economic limit in the next twelve months.

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Permalink Reply by Mark Hughston on July 16, 2018 at 11:26

You are right that we will know a lot more in 12 months. But after watching the wells they drilled about a year and a half ago Vine and GEP are forming units and preparing to drill a large number of wells in 8N-12W, with many of those at the southern margin of the area drilled to date. Attached are the new units and planned wells that we have seen over the last 6 months, with both Haynesville and Bossier locations. A total of 62 new wells. The wells drilled in Sec 1 of 8N-13W and Sec 36 of 8N-12W started producing in 12/2016, and have each produced over 5 BCF and continue to produce at plus or minus 10MM/Day.  The operators believe they will have EURs between 10 and 15 BCF. The more recently drilled wells are significantly better than those. We are mineral owners and have access to current production numbers etc. Much info that is not yet in the public record. I don't believe we are able to share all that we know, so all I would like to do is ask for you and others who might be interested to watch closely what is going on down here. I don't blame you or anyone for being skeptical, but please keep an open mind and watch for the results. The southern most wells are at about 12,000 for the Mid Bossier. The Mid Bossier Section gets only about 1500' deeper before you start back up on the west flank of the Sabine Island.  The two deep tests drilled on the Sabine Island in 7N-11 and 12W both had the Mid Bossier Section present, thick and loaded with gas at a depth comparable to or shallower than the current Vine and GEP drilling. In fact, when SWEPI owned these assets (pre -Vine), they shot 3-D, assembled a large acreage block, and permitted a Horizontal Mid Bossier test in Sec 6 of 7N-11W.  Their 3-D interpretation confirmed a large, relatively unfaulted section of Mid Bossier at a depth of 12,000 feet or less. And their geologic work / log analysis suggested a thick, productive section of Mid Bossier present in the Chevron and Shell wells drilled down there in the early 80's.  The well was permitted in 9/2011 but was never drilled. This area begins almost 6 miles south of the most southern Mid Bossier well drilled to date.  Interesting.

 

Attachments:

• Sbizhub118071616170.pdf, 4.3 MB

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Permalink Reply by Mark Hughston on July 16, 2018 at 11:37

I spotted an error in my recent post.  The current drilling in the southern part of 8N-12W is at about 13,000 ft, not 12,000.

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Permalink Reply by Skip Peel - Mineral Consultant on July 16, 2018 at 13:08

That far south, the eastern edge of the Haynesville Basin is 1500 to 2000' deeper than the western edge.  A downdip from west to east.  I appreciate your exuberance but think you are getting a little ahead of the observable data.

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Permalink Reply by Mark Hughston on July 16, 2018 at 13:20

Just telling you what I can see on 3-D and on SWEPI's interpretation.  Be happy to show you sometime if your interested  In Sec 6 of 7N-11W, (SWEPI's abn loc), the Mid Bossier is no deeper than it is in Sec 2 of 8N-12W, where GEP just drilled a fantastic new well. You are correct in that from about a mile east of there the whole section dives off dramatically to the East-Southeast, dropping down a series of expansion faults.

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Permalink Reply by Skip Peel - Mineral Consultant on July 20, 2018 at 12:41

Mark, by linear feet of perforated lateral, the majority of the Mid-Bossier wells approved for spacing in these applications are in 9N, not 8N.

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Permalink Reply by Mark Hughston on July 23, 2018 at 7:47

Your exactly right Skip.  The Mid Bossier has only been tested in the northern couple of miles of 8N-12W - 13W, but the results so far are very encouraging.

A little about me. I am a geologist and partner in a couple of companies that have been active in Eat Texas and North La for many years. Those companies are Brazos Gas Company and San Saba Royalty.  The Brazos Group is also part of the GP for Olympia Minerals, the mineral owner beneath Vine, GEP and others active in Sabine Parish.

We are very familiar with the Haynesville Bossier play by virtue of our relationship with our lessors, Vine and GEP.  Those companies, of course control properties originally leased to Shell (SWEPI) and Encana.

By virtue of the terms of our lease we are kept up to date more than an average lessee might expect, and have had a great working relationship with our lessors from the get go.

The productivity of southern part of 8N-12W and on into 7N was a project Shell did independent of Encana. In fact it was work done by a separate group within Shell....not the group that was drilling all the wells in 9 and 8N 5 years ago.  That group caused the southern area to be shot and leased on there own 12,000 plus acres from Olympia. That group integrated Shell data recovered from the two deep  wells drilled in that area in the early 1980's. Those wells are the Chevron Davis and Shell Sibley. Both wells encountered pressure and gas in the Mid Bossier causing them to set intermediate casing and build their MW to 16+ lbs.

Using the 3-D data to map structure, and the geology from those two old tests,  Shell assembled a large acreage block and permitted a well in Section 6 on 7N-12W in 2011.  Shell shared their interpretation with us and in fact showed us 3 other spots where they planned to drill additional wells. These wells never got drilled due to internal fights over budget. Twice Shell came to Olympia and extended the lease term, once by two years, then again by one year. It was their intention to drill a well and test the area right up until the time they decided as a company to sell and exit the play.

So, that is a long way of saying that you are exactly right in your analysis of what is proven economically in the play at this point in time. We are very impressed with the results of the new wells drilled by Vine and GEP in the northern part of 8N-12W, and we know from visiting with both companies that they too are very bullish at this time. I believe that the number of new locations, both Mid Bossier and Haynesville, that are being prepared by those two companies, and by Comstock as well, is an endorsement of their exuberance for the southern part of the play.

Skip, I would enjoy meeting you and discussing further either in person or by phone. If you go to the San Saba Royalty Website you can find my contact information.

I really appreciate your comments and observations. I think you are doing a great service to your clients and all those who are interested in following the play. Vine is drilling two wells as we speak in 8N, one in sec 25-36 of 8N-13W, and one in sec 28-33 of 8N-12W. As of this morning both wells were about 5000 ft out in their horizontal legs.....having spud within 3 days of each other.  Keeping our fingers crossed.  Thanks Skip, and thanks Doob for the comments

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Permalink Reply by Skip Peel - Mineral Consultant on July 23, 2018 at 8:13

Mark, I pegged you, and Doob, as knowledgeable industry members and likely in possession of some non-public information.  I enjoy interacting with other GHS industry members but tend to make replies with the many laymen members who are the backbone of GHS in mind.  When you offer positive opinions on the prospects of "middle Sabine", I find that encouraging but I like to temper the expectations of land/mineral owners until there are wells turned to sales.  I look at spacing applications and permits every day.  I maintain tracking spreadsheets of every section/unit in my AOIs.  I get the weekly rig reports.  So I tend to see where Haynesville operators are headed, hence my July 1 discussion, "LA HA Drilling Activity Moving South".  I have a mid-stream client that has provided me with general statements of H2S and CO2 concentrations regarding Sabine Parish.  Without any further specific data, I tend to be conservative in my assessments of economic viability.  Yes, 9N looks prospective from the amount of development planned and ongoing.  I have suspected that if treating costs didn't screw up economics that the rock would be good down through the north half of 8N.  I run Hwy. 171 a good bit and noticed the Cactus Rig #159 with surface location in 1-8N-13W.  Of course it is drilling north and will produce from Sections 25 & 36.

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Permalink Reply by Doob on October 10, 2018 at 5:39

Proven is not a judgement call. If hydrocarbons are producing with a positive cash flow they are proven.

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Permalink Reply by ken hatcher on July 16, 2018 at 7:24

Skip, would still ne interested in your opinion of the refract on Evans #242014 spuded 2010 and refraced last Dec (Vine)8-4-13

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