Angelina County Shalers,
For general information - Goodrich has just released (as in mineral lease terminations) a major portion of their acreage in Angelina County. These leases were "old money" leases associated with the Angelina County Lumber Company heirs, including ACLCO Agency and Henderson / Winston families. The leases had two primary term extensions over the last three years, and I'm assuming Goodrich's poor financial conditions didn't allow for further development or lease extensions. This excludes their HBP properties located along HW 103E (near Etoile). I expect further releases on the smaller tracts as these leases term out.
Surprising, EOG and Blackstone Minerals are retaining their lease holdings in this area (so far).
Thanks for the update, Mike. I'm sure GDP would like to hold these rights but can not afford to do so. EOG and Blackstone are financially capable of maintaining their undrilled rights for the remainder of their extension periods hoping that the price of natural gas improves sufficiently to HBP their positions. I suspect that would require a price north of $3.50 but I have not seen any announcements of well costs on which to base an opinion.
Mike, my mention of well cost is based on the TVD of the wells in that area. The Marcellus is a good deal less deep. That not only makes for lower well costs, it also includes liquids in the production mix. The value of the liquids means that the operators can sell their tailgate gas at a deep discount. I don't think any Haynesville Shale wells will approach the market price of Marcellus/Utica gas until a lot more pipelines are built to open markets more profitable than the Gulf Coast. A lot of Marcellus gas will be coming our way over the next two to three years. And it will be cheap.
At close on 11/19/2015 natural gas was $1.66 MM/Btu (spot price) for delivery in the Mid-Atlantic region. Earlier this week gas in storage reached an all time high at 4.0 TCF. The injection season has lasted well into what has been the traditional withdrawal season owing to milder than normal weather. Even extreme weather no longer moves the price much or for long as evidenced by the Polar Vortex in Feb. 2014 ($5.557).
You're welcome, Mike. I think you'll get another bite at the apple in a couple of years. I would have loved to see more wells drilled in Angelina before the bottom fell out of the Haynesville Shale Play.
Mike, to be clear, is Blackstone offering leases (they are the lessee)? Or leasing their acreage to EOG or another energy company (they are the lessor)? If the second, do you know what company they are leasing to?
Up until about a year ago Black Stone Minerals acquired and manged mineral interests. They leased to a number of different operating companies when the Haynesville Shale Play reached SE TX. EOG appears to have stop taking new leases for natural gas plays back in 2010 or 2011 when they began to focus exclusively on oil plays. Although they moved away from natural gas basins they continued to hold and operate their LA Haynesville acreage. It was not extensive. You can never rule out EOG making an exception but I suspect that they are not interested in drilling natural gas wells. That's why I asked for the details on BSM. Once BSM acquired the SWEPI half of the JV Haynesville acreage with EnCana and formed their own operating company, Vine O&G, I suspected they might also operate in SE TX.
EOG hasn't released any of their LA Haynesville acreage either as far as I know however they stopped drilling wells there years ago.
Thanks for the detail. I hope near term natural gas prices will support development regardless who what company or companies it turns out to be.