O.K. Newbie here so cut me some slack if I screw this up. I just noticed there's no discussion group for my parish and communication among our residents is sketchy and patchy at best because we are VERY new to the oil play, so we don't have any collective wisdom here. Any comments, insights, or even heresay welcome here. What I have to contribute is just information on lease rates and the areas they are concentrating in right now. (Averaging $150 for first three, varying for next two. From 1/6 to 1/5 royalties.) Devon is about a month into drilling it's first Tangipahoa well just a little north of me in Fluker, Louisiana. I have friends who are part of the unit but they are not hearing much of anything. Security at the site is TIGHT with our local sheriff's office maintaining 24 hour presence a couple of hundred yards from the rig itself. They ask you your business and write it all down. I think it's called a "tight hole" or something like that. They are also going to be buying all the pond water nearby. I don't know how much they are paying but will ask around.I have heard that our state is limiting the drilling of wells for water but I'm not sure of that. It was just hearsay from a friend. Well that's it for now.This is a great site. I've learned tons here. Amelia Resources has been a great help as well. Keep up the good work people.
Devon is hardly a little guy, with a $24.5 Billion market cap and Billions of cash on hand. The question for them is whether the play is commercial versus say the Cline Shale in West Texas, or one of their other shale plays.
Why do you think Devon is going so slowly in the trend if they have all of this capital and a farm-in partner that's carrying them? There are rigs available. Why not move some more in and get to drilling? Just don't understand. They seem to be acting like a little guy.
I just read Devons latest investor presentation. They have upped their acreage in the Mississippian to over 500K. They have over 650K acres in the permian, the Cline that SB mentioned. A whole lot is said about the Jackfish heavy oil project in Canada. Not a mention about the TMS, other than a general operations map that shows all of their properties. I would guess that it's not Devon thats the "little guy", but instead its the TMS that doesn't stand up with the big guys. It may be a great play some day, but right now must not measure up.
As Andrew stated, Devon has plenty of options for their drilling $$$'s in other liquids rich shale plays. I don't believe they have given up on the TMS yet, but I don't think they are fully committed yet either. They are gonna be willing to go slow and let Encana and Goodrich help them de-risk the TMS, which Encana is doing a pretty good job of so far.
Devon's results here haven't been encouraging competition for their investment dollars, which still have SOME limit despite their size and JV. Nobody in their right mind would allocate much money to the TMS until every acre of Mississippian is derisked and HBP'ed - that play is the operator's dream. Encana and Goodrich don't have the good fortune of being able to make that sacrifice.
That's not to say the TMS is a dud by any means, but rather that $2.5 million wells and 600 boe/d IPs are just too compelling to ignore.
Hopefully, Devon will drill in northern Tangipahoa Parish within the next 3-5 years.
To go farther I don't think Devon, etc. has the expertise or the capital to go much further. They are just protecting lease positions that they currently have. Its probably going to take companies like EOG, Hilcorp, XTO/Exxon, etc. to really get things going in the lower section of the Trend.
Thanks to all of you for the informative posts. Some of the abbreviated terms you're using are above my layman's head, but gradually I'm getting it! :) Anyone have a list of oil term abbreviations? Looks like the concensus is that Devon has started gathering enough leases to get Tangipahoa Parish started into the play, but that the HUGE corps with more stroke & capital will have to come in with their knowledge to make the play more interesting. Seems like they're leasing so much property around here to be putting out such so-so reports that it leaves me hanging. I'm pretty sure that I'm sitting on top of blackgold here and just biding my time waiting for the truth to come out. Rasputin, glad to see you back on the blog. Miss your posts! Dig thru those samples and let us know what you discover!
There are many lists of oil industry abbreviations online. The one from Wilkipedia looks like a good one.
Bear in mind that there are variations in acronyms used in scouting/drilling reports between different operators.
As to the "so-so reports", I suppose it is typical for lease buyers to make these while they are still buying to keep the bonuses from escalating. Do you know how much per acre they are now offering for say a 5 year lease with 20% royalty?
I took a ride up Hwy 51 north this morning. Two 18 wheelers carrying what to looked to me like oil field type equipment passed me going south (One of them looked like some kind of platform with yellow stairs going up it) I'm not saying for sure that's what it was but there's nothing but cows in the north end of this parish and this didn't look like an agricultural thing to me. I turned around and followed a little ways. They turned onto Hwy 10 going west, passed over I-55, passed by the Soterra access road, and accelerated out towards St. Helena parish. I rode back to Kentwood and the drilling rig is still standing but there were several extra sheriff's cars there waiting, presumably to escort something large.
On another note, residents of Fluker who are in the Soterra production unit have received a letter asking them to send a cancelled check to someone whose name I didn't catch. One of the residents was told the money was coming soon and would be sent electronically.
I just took another little leisurely ride up north. The Thomas rig north of Kentwood is gone. The ladies at the local convenience store in town said that the sheriff's office shut down the intersection for some "great big thing" to come through today. It turned onto Hwy 38 heading west which would take it to I-55 north or south, or if it stayed on 38 it would have been headed into St. Helena parish.
Where to the West did the rig from Thomas 38-H go? Oklahoma?