Western Haynesville Play (Texas) - Robertson, Leon, and Freestone Counties

The following is a lightly edited cut-and-paste from another main page discussion.  I think this topic is interesting and deserves its own discussion thread.  I've assumed that the members posting in that discussion will not object to my moving their replies to this discussion as there was good detail concerning this emerging play.  I will remove any of those replies upon request.

Skip

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Western Haynesville Play (Texas) - Robertson, Leon, and Freestone Counties.  

Reply by Alan Herrington on December 3, 2022 at 18:36

Comstock also is busy extending the Haynesville play deeper into East Texas.  Actually, it should be considered Haynesville "equivalent", as the target formation appears to be Lower Bossier.

Based on a review of lease and assignment filings in the counties, it appears that Comstock has established a leasehold approaching 125,000 gross acres, located primarily in Robertson, Leon, and Freestone Counties.  

To date, Comstock has permitted six horizontal wells in Robertson County.  They have publicized their first well in the play, the Circle M Allocation 1H.  That well has produced 4.8 BCF of gas in its first 167 days of production and has not yet exhibited any significant monthly decline.  Comstock reported that they expected to bring their second well into production during November.  They are now in the process of drilling the remaining four wells in Robertson County, and just submitted a permit request for their first well in Leon County.  They have two rigs working.

In addition to Comstock, other companies appear to be pursuing Lower Bossier as well (but I'm not certain yet).  Thorp Petroleum has recorded lease memos covering more than 7,000 acres in Leon and Freestone Counties.  Vanna Production LLC (leasing entity associated with Vanna Oil and Gas) has recorded lease memos covering more than 12,000 acres, primarily in Leon with some in Freestone.

It will be interesting to see how this all plays out.  Here's an image showing the surveys in which acreage has been leased by the listed firms.  Note that the distance on the map from Oakwood down to Franklin is 53 miles.

 

Thanks for posting this, Alan.  Rock Man and I have followed this but haven't started any dedicated GHS sub groups because a)  It's outside of our traditional geographic foot print for HA/BO, and  b)  the Bald Prairie Field may not be directly related to the Haynesville/Bossier play in NW LA & E TX but certainly might be a depth equivalent which I will leave for Rock Man to weigh in on.  No doubt, there are some impressive early wells in that footprint.

 Rock Man on December 4, 2022 at 13:10

This Comstock play in Robertson and Leon County area is stratigraphically equivalent to Bossier / Haynesville section seen in NW La / NE Tx.

Same age rocks - just the other side of the basin (i.e., on the western side of the E Tx embayment)

 w.r. frank on December 5, 2022 at 14:07

What is vertical depth and what is the length of lateral perforations?

  Alan Herrington on December 5, 2022 at 14:27

The completion report for the Circle M Allocation 1H shows a TVD of 15,981 feet and a producing interval of 7,861 feet.

For the other five Robertson County wells and the one Leon County well, we only have the estimates provided in the W-1 permit submissions:

Cazey Black A:  16,000 TVD  8,365 PI

McCullough Ingram A:  16,500 TVD  10,000 PI

McCullough Ingram C:  16,300 TVD  8,315 PI

Campbell B:  16,000 TVD  13,280 PI

Campbell C:  16,000 TVD  13,000 PI

Dinkins:  18,000 TVD  10,023 PI

 Skip Peel - Mineral Consultant on December 5, 2022 at 14:32

 

Thanks, Alan.  Those TVDs seem exceptionally deep.  Are pressure readings available for these wells?

 

Rock Man on December 5, 2022 at 14:36

In excess of 0.85# per foot pressure gradient

Expensive wells

 

Skip Peel - Mineral Consultant on December 5, 2022 at 14:40

 

So, > 15,000 psi for a 18K TVD.  Expensive and dangerous.  The bottom hole temps must be crazy also.

Bottom of Form

 Alan Herrington on December 5, 2022 at 15:42

For the Circle M well:

Bottom Hole Temp:  320 degrees

Shut In Wellhead Pressure:  11,900 PSI and 100 degrees

Test Run Wellhead Pressure:  9,488 PSI and 213 degrees with 28 choke

 

 Skip Peel - Mineral Consultant on December 5, 2022 at 16:14

Thanks, Alan.  I would have suspected a temp closer to 400 at that depth.  Good pressures make good wells.

 Alan Herrington on December 7, 2022 at 9:49

So there's a new twist in the story of this new play...

I mentioned above that Vanna Production had recorded some leases in Leon County (60 to be exact).  Vanna immediately assigned those leases to Sabana Royalty Partners, which I thought seemed a little odd.  An internet search didn't turn up much about Sabana, but it did find the officers:  Dan and Farris Wilks.  These two brothers got into hydraulic fracturing when by starting the company Frac Tech back in 2002.  In 2011, they sold their 70% share for $3.5 billion, becoming billionaires in the process.

If they are indeed chasing Lower Bossier like Jerry Jones is, we now have three billionaires involved!

 Rock Man on December 7, 2022 at 10:03 

Interesting playing field for sure

 

Alan Herrington on December 20, 2022 at 18:41

Comstock filed a completion report today on their second Lower Bossier well in Robertson County, the Cazey Black A 1H.  Here are some stats:

TVD:  15,927 feet

Producing Interval:  7,912 feet

24-Hour Test Gas Volume:  42,215 MCF with choke at 30 (this production is about 15% higher than for their first well)

Shut In Pressure:  12,150 PSI

Test Run Pressure:  10,097 PSI

Shut In Temp:  100 degrees

Test Run Temp:  259 degrees

Bottom Hole Temp:  320 degrees

 

 Skip Peel - Mineral Consultant on December 20, 2022 at 18:48

Good well. Impressive.  Thanks, Alan.

 Alan Herrington on January 11, 2023 at 13:24

Cazey Black A production during its first 24 days:  711,908 MCF.  

29,663 MCF per day.

 Rock Man on January 11, 2023 at 13:30

Any way to find out if Comstock is hedging gas out here?

Big drop in gas prices since they started producing up here / big impact on economics

Side comment - I have seen D&C costs for horizontal drilling really take off over the past few months

Cost of diesel, steel, crews, etc.

Rig rates running over $35,000 per day

Good crews at a premium

For both drilling as well as frac jobs and other operations 

An example is D&C on 12,500' laterals (TVD 7500') in the Eagle Ford - over $12,5 Millon

These deeper and higher-pressure wells will have higher costs too - and with dropping gas prices, what is the bottom price threshold for drilling?

Just putting this out there / open for all comments as usual

Niel Loeb on January 23, 2023 at 9:30

Are these good numbers, i.e. is it producing a large amount?

 Rock Man on January 23, 2023 at 9:38

Great numbers in my opinion - especially when one considers the minimal apparent production decline.

Basically, no decline for first 6 months of production. 30 MMCF per day.

EUR's here may be larger than the HV in NE Tx / NW La.

Niel Loeb on January 23, 2023 at 16:28

Thanks

 Joshua S. Huckaby on January 23, 2023 at 15:11

Rumor mill that I’ve been hearing deep bossier is 6bcf per 1,000’ of lateral.  No matter I still believe both Comstock and Aethon are going way over their capex for these wells.

 

 Rock Man on January 23, 2023 at 15:44

As a geologist, I believe that this is Lower Bossier target around 16,500' TVD. Some others think Haynesville section. Really a moot point - deep, high pressure, dry gas with huge volumes post frac.

I am sure their D&C numbers have changed dramatically since they started drilling out here.

Wonder if they are hedging their gas??

 Alan Herrington on January 23, 2023 at 16:18

According to their Q3 2022 report, they have natural gas collar contracts in place for calendar year 2023:

Volume(MMBtu):  128,925,000

Average Price Per MMBtu:

   Ceiling  $9.85


   Floor  $2.98

 

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Replies to This Discussion

Permalink Reply by Alan Herrington on July 9, 2023 at 8:49

Current low gas prices combined with an apparent glut of gas coming out of this region are killing the economics of these very productive wells.  For example, the Henry Hub spot price for gas in April 2023 was $2.16/MCF.  However, Aethon obtained an average price of $1.57 for the month, and Comstock was slightly lower at $1.53.  In addition, treatment and transportation costs are high:  $0.58/MCF for Aethon and $0.79/MCF for Comstock.  As a side note, Comstock royalty owners who did not exclude post production expenses from their royalties saw their royalties cut in half.

Comstock's Campbell EO B 2H well produced 1,025,532 MCF during April.  At $1.53/MCF total revenue for the month was only $1,572,132.  Marketing costs at $0.79/MCF reduced revenue by $806,125, leaving $766,007.  Assuming royalties equal 10% of the gross revenue, net revenue after royalties and marketing costs equaled $608,794 ($0.59/MCF).

That implies a long payback period given the cost of these wells (D&C estimated to be in the $20 to $25 million range) and the production decline over time..  I would not be surprised to see Aethon and Comstock pause drilling if current low prices continue much longer.


Permalink Reply by Skip Peel - Mineral Consultant on July 9, 2023 at 9:18

Thanks.  Brings up the question of how much leasehold is currently not HBP?  How many wells will the typical unit accommodate?

Permalink Reply by Alan Herrington on July 9, 2023 at 9:32

The 60,000 net acres that Comstock acquired from Legacy Reserves is all HBP.  In addition, in some of the deals that Comstock has done they acquired rights to the Haynesville/Lower Bossier depths in existing HBP leases.  For example, they acquired rights to 14,000 acres from Ovintiv using this approach.  However, some percentage greater than 50% of the total gross acreage is not HBP.

Permalink Reply by Skip Peel - Mineral Consultant on July 9, 2023 at 9:40

Thanks.  Time to bite the bullet and keep drilling.  Many of us here on GHS can remember going through the same phase in the early years of the Haynesville land rush.

Permalink Reply by Rock Man on July 9, 2023 at 9:43

A lot of that older HBP acreage is associated with shallow production (Travis Peak / Cotton Valley Sand) that has no Pugh clause depth severances.

Word to the wise on all new leasing - ALWAYS get a Pugh Clause / depth severance in any new lease.

Plus engage an experienced O&G lawyer to help you.

I did some VERY rough math on this play and potential mineral owner revenues - for every 1 net mineral acre in a 640-acre production unit, a 30 million cubic foot per day of gas production equates to about $750 per month new (post taxes and LOE) to the mineral owner assuming $2.50 per MCF net gas price.

Not chump change!

The key here (among other things) is NOT the lease bonus but instead is the royalty.

Expect 5-year terms or 3+2 due to the long time frames associated with getting these wells drilled and hooked to sales. Operators will need some latitude to expand the time frame for operational efficiency. 

Getting a good no cost lease here will be very very difficult based on what I am hearing - third party charges for gas handling, marketing and processing are going to passed through to the operator - and in turn to the mineral owners who have been leased.

Not leasing while you are trying to get a full "no cost" lease may leave you in a position where you are faced with a Working Interest position decision (non-consent or participate) on a $30 Million well.

Permalink Reply by Alan Herrington on August 6, 2023 at 10:48

Comstock Circle M Allocation 1H - Monthly Production

Here are the numbers for their first Robertson County well:
4/2022:  364,027 MCF (14 days)
5/2022:  922,044
6/2022:  860,637
7/2022:  917,901
8/2022:  876,040
9/2022:  866,324
10/2022:  9,444 (shut in while Cazey Black A being frac'd)

11/2022:  765,624
12/2022:  897,632
1/2023:  659,888
2/2023:  564,271
3/2023:  474,212
4/2023:  105,816 (wonder what caused the four-month decline?)
5/2023:  672,495
6/2023:  879,398
440 Day Total:  9,835,753 (22,354 MCF/Day)
6/2023 production is bigger than 6/2022
EUR should exceed 50 BCF, maybe reach 70 BCF.  

And this is the first well in the new play!
Permalink Reply by Skip Peel - Mineral Consultant on August 6, 2023 at 10:55

Impressive.  Thanks, Alan.

Permalink Reply by Alan Herrington on March 26, 2024 at 10:36

Comstock filed a 10-K in February 2024 in which they disclosed their land acquisition in their Western Haynesville play (Robertson, Leon, and Freestone Counties in Texas).  During the 2021 through 2023 period Comstock acquired 234,111 net acres at a cost of $210.6 million ($900 per acre).

Most of the leasing during that period was in Robertson and Leon Counties (the bulk of it in Leon), but their leasing focus is shifting into 
Freestone County in 2024.  So far this year, Comstock (and their primary leasing agent Surprise Valley Resources) have recorded more than 500 new lease memo in Freestone County.

Permalink Reply by Alan Herrington on March 26, 2024 at 10:42
Here's the 24-hour test info for each of Comstock's Western Haynesville wells so far:
Robertson County:
Circle M Allocation 1H  36,709 MCF with 2.625 inch orifice
Cazey Black A 1H  42,215 MCF  3.5 inch orifice
Campbell EO B 2H  36,205 MCF  3.5 inch
McCullough Ingram A !H  42,460 MCF  3.5 inch
Cazey MS 1H  33,820 MCF  3.0 inch
Leon County:
Dinkins JG  1H  35,786 MCF  3.5 inch
Lanier CW 1H  35,339 MCF  2.5 inch
Neyland MMM 1H  31,293 MCF  2.5 inch
Great wells, but they're not making any money given current gas prices.
Permalink Reply by Skip Peel - Mineral Consultant on March 26, 2024 at 11:31

Thanks, Alan.  I hear the wells are quite expensive.  Have any well costs been publicized?

Permalink Reply by Alan Herrington on March 26, 2024 at 11:56

Rock Man will know more than me, but I've heard $25 to $30 million for the deeper wells they are now drilling in Leon County.

Permalink Reply by Rock Man on March 26, 2024 at 15:23

Considering the depths of these laterals (some now over 16,000' TVD), long casing strings (close to 9 miles of total casing), oil-based drilling fluids, close to 400-degree temps and need for exotic / high-cost proppant, well costs are almost definitely over $30 million D&C

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