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Permalink Reply by Skip Peel - Mineral Consultant on May 26, 2011 at 11:14

J-W received a HA (Haynesville Shale) Unit order from the state for Section 29 however I do not expect them to develop the unit.  QEP is drilling HA horizontals in adjoining sections 30 and 31 now and I suspect that if those wells are good, Questar will likely develop Section 29.

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Permalink Reply by Henry on May 27, 2011 at 6:35

Skip,

Can you explain how this works?  If J-W has the unit order, how can Questar come in and develop Sec 29?  Why wouldn't J-W develop the section?

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Permalink Reply by Skip Peel - Mineral Consultant on May 27, 2011 at 6:50

A company holding a unit order from the state has the option to operate or designate the operator of their unit.  Numerous units were formed early in the HA Play by companies that controlled the leases in a section, most by HBP, but that had no intention of operating.  In fact in many instances they had neither the technical or financial capability to do so.  Acquiring a unit order just added some value in their search for a shale player to develop the HA.  Although J-W does operate some HA units, they can JV with Questar and designate QEP as the operator of their unit.  QEP is a much more experienced horizontal HA driller and has drilled the preponderance of the HA wells in this area.

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Permalink Reply by steven toms on May 26, 2011 at 16:22

Thanks skip i have heard that jw was going to try to drill for oil in our section, of course that could just be rumor

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