Replies to This Discussion

Permalink Reply by intrepid on August 14, 2009 at 15:37

Interesting info. Thanks for posting it. What's your take on them selling out in the Barnett and soon after buying into the HS? Looks like their leases are at 25% royalties.

Permalink Reply by ALongview on August 14, 2009 at 16:39

Looks like they paid down debt. A good move to lease in this part of the Haynesville when they could.

Dispositions in 2008

In January 2008, we and our operator-partner entered into a series of agreements to sell our interests in wells and undeveloped acreage in the Fort Worth Barnett Shale Play in Johnson and Tarrant counties, Texas to another industry participant active in that area. We owned a 12.5% non-operated working interest in the assets being sold and had 1.5 Bcfe in proved reserves at December 31, 2007. The final total consideration paid by the buyer was based on existing wells and undeveloped acreage owned by us and our partner at the time of the final closing. Our share of the consideration received was approximately $34.4 million. Proceeds received for our interest were primarily used to repay amounts outstanding under our Senior Revolving Credit Agreement (defined below) and to help finance our acquisition of the properties from Smith. Our net book value of these assets sold was $18.8 million, which resulted in a gain of $15.6 million.

Permalink Reply by intrepid on August 15, 2009 at 6:31

Thanks, I didn't see that explaination. Looks like they are very interested in San Augustine Co.!

Permalink Reply by Wilma Watts on August 16, 2009 at 3:17

More on Crimson, analyst discussion, one of the few around:

http://www.lsgifund.com/TVF/Haynesville_CXPO.pdf

These folks at LSGI apparently have a large position in CXPO, not sure if they also own minerals in the area. They also have some connection with the SMU Maguire Energy Institute it appears.

CXPO has a conf call in the morning, hope to listen. If I do I will try to post a comment on what was said.

Glad to see the CXPO presentation on their website, very informative for us Haynesville players as well as mineral owenrs.

Permalink Reply by leo bishop on August 21, 2009 at 6:07

I don't think Crimson has that good of title on their leases and they don't have that much of contiguous acreage to drill themselves.

Permalink Reply by ALongview on August 21, 2009 at 6:09

Just curious what makes you say that about their title work?

Permalink Reply by leo bishop on August 21, 2009 at 6:38

I ran some of thier lease out. they hired a lot of local people that had not done title work before who really did not understand minerals. talk to Devon...

Permalink Reply by Carter on September 1, 2009 at 15:29

Smart man, you are.

Permalink Reply by j garrett on October 18, 2009 at 5:12

They also took leases based off of old expired leases on file in the courthouse, without running title out themselves. They were in a land grab and willing to roll the dice and trust former lessees title work without running it out themselves. They would just locate and sign whoever was on a prior lease.

Permalink Reply by Wilma Watts on October 18, 2009 at 12:26

If title is bad it is a great way for Devon to increase their interest or someone else to 'bust into' what looks to be a good well.

Goldman Sachs said Devon was one of 14 companies likely to get a takeover or merger bid last week in a report - valuation is excellent and their technical expertise is second to none. And management is really sharp.

Looking forward to the Kardell test results.

Permalink Reply by Wilma Watts on August 21, 2009 at 7:26

Crimson said on the recent conference call they want to operate out here. The presentation says 200 well sites, potentially, in the Haynesville.

I got the impression like you do that their leases were spread out, makes it harder to operate and develop, but I suppose it reduces risk. I was sort of surprised they wanted to operate out here, this is not simple drilling, they talked the talk like they had the expertise.

I am suspect, but I might be wrong about this also, not an infrequent occurance.

Permalink Reply by DR on August 21, 2009 at 7:50

They put up a new corporate presentation that shows their lease locations. Check page 25. On their CC they said that they are in talks with a few other companies to form other AMI. I remember them saying that they contributed 1500-1700 acres to the Devon/Crimson AMI. Overall, I think it is a plus that several different operators are working this area and joining forces. This will lower the risk and create a shorter learning curve for all.

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