Could someone please enlighten me on what is all the activity happening in Panola County. How long could this last? Is this the start of another "gas boom"? If so what is the opinion on when it will really take off?
What is the opinion for Shelby County? Is because of higher drilling cost? If so what does natural gas have to be for operators to make a profit of the wells drilled?
Excuse my ignorance, i am still a novice when it comes to this and am still trying to figure this out. As a business owner (inherited) in this OILFIELD workers (all ranges) account for 90% of the business. How can I learn more about this industry that is not so technical (if there is a resource out there)?
I would like to employe a successful sales strategy to help grow the business and get more in touch with clientele of this market segment.
There are currently 10 rigs drilling in Panola County: Andarko 4, BP 1, Classic Operating 1, Petroquest Energy 1, Memorial Resource Development 1, XTO 1 and Indigo 1. The general reason for this level of interest and activity is the presence of wet gas, both Haynesville Shale and Cotton Valley Sands. The bulk of the drilling is "in-fill" in nature meaning that the formations have been drilled for a number of years, the productive area generally defined and the economics are within profit requirements of the companies drilling. You can ask Julie (jffree1) more about Sibley County but Haynesville Shale with liquids is relatively rare because most of the HS is dry gas thus the economics of Panola wells does not extend much outside of that county. The Cotton Valley Sand is a conventional reservoir and as such is not continuously productive over a wide area. That's why Panola has a good bit of activity while other E TX counties have little or none.
Other county rig counts: Rusk 7, San Augustine 4, Shelby 1, Harrison 1, Cherokee 2, Anderson 1.
The term, "tight", indicates low permeability. If you have long life, vertical wells, they are not producing from a tight formation interval. An unconventional reservoir may exhibit variable permeability over relatively short distances. Wherever the permeability is too low for a commercial vertical well, it may be a candidate for a horizontal well. Of course the horizontal well bore is used to created multiple frac stages to stimulate the formation and induce artificial permeability. In areas where the gas produced is "wet" the economics (profit) are better than where the gas is dry owing to the value of condensate and Natural Gas Liquids (NGL).
A tight formation may produce oil, wet gas or dry gas. So tight does not necessarily mean wet. It simply means low permeability. Tight formations produce different combinations of hydrocarbons in different locations. Panola just happens to be an area of sufficiently tight rock (for horizontal wells) and gas wells that also produce liquids which make them more profitable than dry gas. Reworking existing wells at the same perforation depth won't change what they produce. They would have to be re-completed at a different depth for the hydrocarbon produced to be different. In general, the deeper the dries. And the more shallow, the wetter.
There is activity in Panola County but it does not constitute a new 'boom'. There have been around 10 rigs in the county for the better part of two years so there has been drilling there even as it stopped in counties to the south. We may never see another Haynesville type boom in my lifetime.
There are many, and I mean many 100s, of conventional vertical or short directional wells in Panola but there are now over 100 horizontal Haynesville wells there now thanks to Anadarko, XTO and a couple of other operators, as well. There will be some activity in Panola as long as there is any market at all for natural gas. It is the beating heart of the gas industry in East Texas. As such, the people who work there year round have settled there and have a place to live.
Hotels/motels are needed when there is an influx of people from land companies, seismograph and pipeline crews and the sales people for the companies who provide specialty services & equipment to drillers and operators. Rig Data sends out a directory once a year called Rigs & Drillers | A Buyer's and Seller's Guide To U.S. Land and Offshore Drilling Rigs. If you have a subscription to one of their weekly newsletters when they send this out... you will get one. It is worth the price of subscription just for the Contractor Directory with Complete Contact Information for anyone who hopes to sell into this industry.
I do not work for Rig Data.
what are you thoughts about once exports start to happen from the Sabine Pass facility.
Wouldn't that increase demand substantially? If so wouldn't it make sense if the gas came from local sources?
LNG export companies will purchase the cheapest gas they can source. It doesn't matter to them where it comes from. Even with the cost of transportation Marcellus natural gas can be sold for less than $2.50/mcf and still provide a profit to the producer. That will put a limit on how much gas is sourced from LA & E TX fields. Only the low cost producers will be able to compete.
Is there pipelines in place so the gas can be transported? If not, transport via rails or trucks could add to the costs of $2.50/mcf-Right? Plus a freezing facility would need to be available on the east cost?
What would you say is break even cost for Panola County? Shelby County? Rusk County?
I have heard that the cost can vary from county to county.
My questions are more a result of my ignorance and not to question your reply. In the process I learn more. So thanks again.
Natural gas can only be transported by pipeline. And yes there are pipelines to connect Marcellus gas to Gulf Coast markets with more being built as I post this reply.
Paul, economics are based on formation characteristics, not counties. Geologic zones do not conform to county lines.
Thanks for the enlightening me.
Paul, what you are after is business. Short of some new discovery or an unexpected jump in the price of natural gas or oil your local market is unlikely to change. However your part of E TX has always had oil and gas activity and will continue to have new wells drilled. Those new wells will require certain field services and materials. What I suggest you do is find some local field service businesses, network with them and see if there are specific needs they have, or know of, that you can fill.
Can you give me a name of a field service company.
Like Key Energy? Or a rental facility that rents equipment to these oil & gas companies