Does anyone know if any rigs are running in S.A. County?  The permits have dried up... Thanks

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Thanks, Chad.  I am unfamiliar with the number of SWD wells in the E TX Haynesville Shale fairway.  Your right, in the heart of the LA Haynesville there was significant existing Cotton Valley production and plenty of injection wells, hundreds in fact.  The Cotton Valley is notorious for large produced water volumes.  I am hoping that the SWD well in San Augustine is a leading indicator of intent to drill new wells in that SA/Shelby country line area.

I know things have slowed down (like XTO and BP have gone dormant), but I still don't see why the private equity money is continuing to pour huge amounts of $ into drilling super-expensive wells, when Henry Hub prices are WAY below - - even - - $2.  Almost all permits to drill new (grass-roots) wells are being permitted by Aethon, Comstock, Rockcliff, Sabine, Tanos, etc... could it be that they are able to hedge future production at prices that are better than Exxon or BP?  - or  -  is it they believe that gas prices are going to double right away?  

One conundrum is that they are drilling HBP acreage, - when they don't have to -.  Chesapeake went broke... are they NEXT?

In many cases, yes they do have to.  Aethon has an operating agreement with Black Stone Minerals that requires a drilling schedule. BSM is footing the bill to develop their acreage and Aethon gets a cut for acting as operator.  Not much skin in the game for Aethon, so little risk.   Rockcliff and Comstock are drilling "deep rights" acquired from existing shallow production operators.  Those "deep rights" assignments also include drilling commitments.    Sabine and Tanos may be in the same boat but I have no first hand knowledge on them.  The big money for those shallow operators holding old one eighth royalty leases is in production more so than upfront cash.  They wouldn't do the deal without a commitment to drill a minimum number of wells on a set schedule.  If a company does not meet the drilling commitment, they lose the lease rights.  Pretty straight forward.

XTO (XOM) and BPX (BP) are completely different situations.  They have many options for where to focus their operations and the Haynesville/Bossier play just doesn't suit them at this time. 


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