Replies to This Discussion

Permalink Reply by Les Bamburg on May 8, 2009 at 16:13

VSC, what is really playing havoc is the drop in gas price plus the drying up of the capital markets. This means a company like EnCana can only spend their cash flow. Before companies could spend twice their cash flow and be more aggresive in drilling to get acreage held by production.

• ▶ Reply

Permalink Reply by VSC DeSoto South on May 9, 2009 at 1:52

2 section south of Harris 19. 31 11N 12W.
Is that too far?

• ▶ Reply

Permalink Reply by Les Bamburg on May 9, 2009 at 3:09

VSC, I think you are in there but it may just take longer to get to your section.

• ▶ Reply

Permalink Reply by VSC DeSoto South on May 9, 2009 at 2:02

The other odd thing about this is that just about 2 weeks ago Encana announced how they wanted to spend MORE money on their Haynesville Shale exploration and development. With that announcement in mind, I would think they are just looking for a partner to help drill so as not to lose leases as they expire, and hold them by production.
I would think they should just get some more rigs and get busy. There should be many available, and not that expensive, since the rig count is dropping weekly.
Why wouldn't they go in that direction instead of looking for a partner?
On the other hand, as stated earlier, maybe the southern portion is more difficult to drill, and they want a partner with more advanced experience and expertise.

• ▶ Reply

Permalink Reply by Les Bamburg on May 9, 2009 at 3:08

VSC, yes costs are coming down but only about 20%. So they still need additional capital to help over the next couple of years. You hear this story from almosr every producer and pipeline company. "Have plenty of oppotunities but need capital to grow the business".

You may be right about getting some expertise but I am not sure who has the experience of drilling horizontals in that kind of pressure and temperature environment.

• ▶ Reply

Permalink Reply by Spring Branch,mineral owner on May 9, 2009 at 4:59

Shell, being a major international, certainly has deep enough pockets to spend whatever they want to in the Haynesville to protect those leases which they deem to be long term valuable. Frankly, I have not seen any indication as yet that they are taking the Haynesville seriously. Like most major international oil companies, there are probably so many layers of management that are being transferred here and there, or are constantly retiring, half of the time the left hand doesn't know what the right hand is doing. Encana seems to be serious, but I bet Shell is holding them back. This is all just my opinion.

• ▶ Reply

Permalink Reply by VHaddad on May 9, 2009 at 8:39

When you say Southern Portion - exactly what areas are you talking about?

• ▶ Reply

Permalink Reply by Les Bamburg on May 9, 2009 at 10:23

VH, primarily referencing Sabine & Natchitoches Parishes in Louisiana.

• ▶ Reply

Permalink Reply by Les Bamburg on May 9, 2009 at 5:19

Skip, in my opinion EnCana/Shell have grouped their acreage in three categories.

Category A - Acreage E/S have developed or intend to develop without outside assistance. Northern Red River, DeSoto, Bossier & Caddo Parishes.
Category B - Acreage E/S would like to develop but with some outside assistance (new 3-party JV). Sabine & Natchitoches Parishes. Newspaper story
Category C - Acreage E/S would like to sale or swap to another party. Far Southeastern corner of Red River parish. Online auction

Category C primarily consists of sections where E/S control less than 50% of the acreage and/or Samson is operator of the unit.

• ▶ Reply

Permalink Reply by Spring Branch,mineral owner on May 9, 2009 at 5:30

Looks reasonable to me, Les.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on May 9, 2009 at 5:41

Les. I agree with your assessment with some reservation as to "C". If the goal is "sell or swap", is an on-line auction the best means to that end? Just seems a strange way to go about achieving that goal.

• ▶ Reply

Permalink Reply by R B on May 11, 2009 at 4:39

Thanks Les B for all the helpful information, a few novice questions if you have the time. Sorry for my lack of knowledge and maybe you have answered this already, but do you consider T-13N-R8W sections 8, 17, 20 to be included in Category A? What do you make of Encana letting the permit expire on serial #238858? Many thanks.

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• 4
• Next ›
• Page