Swepi (SHELL OIL) and their phenominal Haynesville Shale track record!

This has been touched on a little bit lately, but I believe it deserves a great deal more attention. I have seen Chesapeake and other operators cussed and discussed on this web site hundreds, maybe thousands of times. However, the one operator that few people talk about, but should probably have more disdain by the mineral owners of Northwest Louisiana IMHO is Shell Oil, you know......ROYAL DUTCH SHELL.......one of the largest international oil companies in the world.......probably the company with the deepest pockets of any company operating in the Haynesville....you know......that company operating under the code name SWEPI ( if I had their track record, I'd want a code name to operate under too) We have 10,000 or so members on this web site. I'd like to pole the membership to find out how many members (and non-members too for that matter) have actually received a royalty check from this company. I would like to know how many members are proud of leasing to
Swepi. I would like to hear from the folks who are happy with the way Shell Oil is developing their mineral estate. I would like to hear from people that think taking over a year to lay a pipeline to a well in their section is a bit much since the other operators seem to be able to do it in a matter of weeks. I would like to hear from folks who think it is rediculous to take 4-6 months to drill a Haynesville well, while he other operators have cut the time to drill down to 40-45 days. I would like to talk to a mineral owner who doesn't think that Sir whatever his name is over in Europe should fire the whole team in charge of the Haynesville and replace them with a group who has some idea what they are doing. My personal perspective is that Shell (SWEPI) should either get serious about developing the Haynesville or sell it to Encana and get the hell out. Who out there even knows where Shell's Field office is anyway? Do they even have one? I've never walked a picket line in my life, but in an effort to embarrass this large International Oil Company based on their incompetence, I'd be willing to walk that one!..............if I knew where they were!

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They will prob use the lack of pipeline as their fallback position, even though Palmer, Camterra, J-W and some of the other smaller operators manage to get pipelines built to their wells in a very reasonable period of time. Somehow Shell can't or won't.
Parker, untimely shut-in payment no matter how small an amount indeed will terminate the lease. Period.
Ha! My shut in royalty is $1 per acre per year.
But, are you getting it? If you are shut in, this payment must be made to keep the lease in force.
Even if the lease is paid up? The lease extension runs out this year. So I guess we will see.
I'd recommend looking at the language in the lease itself. Normally shut-in payments are only for lack of a market and not because the market price is not what the producing company wants to receive for its production. If there is a pipeline and SWEPI is not producing the well, then it is probably in breach and may actually lose the lease. As I say, look at the language in the lease.
it says should Lessee be unable to operate said well because of lack of market or marketing facilities or governmental restrictions...looks like they have 90 days to pay up after the extension of the primary term expires. I have the day marked on my calendar!
So they just don't build the pipeline!
There is no way this turns out well for the mineral owner. Two reasons: they have demonstrated incompetence in the actual drilling process. Their first well had to be junked because of stuck pipe and many of the 20 or so wells that they have drilled have had stuck pipe, stuck coil tubing, or stuck something. As slow as they go drilling wells, it looks like they could do it without sticking something. If their ability to complete wells compares to their ability to drill wells and build pipelines, their royalty owners are in deep trouble. 2) You know, there is a time value to money! If they intend to drill Haynesville wells on 80 acre spacings, and possibly Bossier wells on 80 acre spacings too, exactly when do they intend to start? If they started now (which they basically haven't) they would be drilling wells for the next 30 years. We act like the price of natural gas now is the most important consideration. Actually in the big picture it is relatively unimportant if you look out over possibly 16 wells in a section and a 30 year period to get them drilled. If they haven't already made the arrangements, where are they going to get the rigs to "start" their drilling program???
The truth is their interest in the Haynesville is like a flea on the back of an elephant. They are just not taking it seriously. We all love our kids to death and I personally want my son to inherit everything I have after I'm gone. In the meantime, I'd like a little royalty income from Swepi for my wife and I!!!!
With the right bad publicity campaign, they could possibly be embarassed into doing SOMETHING! By the way , the price of gas was $2.40 in September.......it's $5.80 now. That is a pretty rapid changein price. Based on their track record, how long do you think it might take Swepi to gear up their operations to reflect the higher price. I'm not very optimistic.
If I were the other operators, I'd be trying to top lease everything Swepi has. Who would want to re-lease to them? Encana ought to be embarassed to be associated with them! As Jay has stated, they have one producing well, the Murray well which was completed a year ago and has cumulative production of about 202 million cu. ft in that time. It will be hard pressed to have a 2 billion cu ft EUR. About like a good Cotton Valley well! Nice job, Swepi. It would be great if we could get Vickie Wellborn with the Shreveport Times to do a story on Swepi. That would turn some heads!
The (Shreveport) Times does not publish negative articles concerning companies that purchase their ads. They avoid any controversial subject matter that could possibly impact their revenue.
In these economic times, I guess I can't blame them.
Some journalism huh? No wonder print is going the way of the dinosaur. That's the way it was before the recession!


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