Replies to This Discussion

Permalink Reply by Cathy Pender on September 8, 2015 at 13:18

Hi Charles,

We spoke to a person in the Owners Relation Office for Sanchez Oil and Gas in Houston.

 

He said that they are working on the Division Orders this month and hope that they will be sent out by the end of September for our signatures.  This is good news.

If you haven't already done so, I'd call them.

I'll let you know when we receive ours.

I can't wait to see what we're looking at here.

Cathy

Permalink Reply by Joe Aldridge on June 10, 2015 at 1:57

So you are saying a lot of acreage is going to come open. What will that do for the lease price? I would assume that it will remain low or will it move more to the $400 to $1000 an acre that Kirk was forecasting before the drop? Are any majors interested in the TMS? That is what really got the Eagleford prices going. 

Permalink Reply by Skip Peel - Mineral Consultant on June 10, 2015 at 2:34

I think you'll hear the term, "high grading" a lot by the current TMS operators in the near future as leases expire.  If any major or mid-major companies have interest in the TMS they could acquire Halcon or Goodrich.  I imagine that Encana would be willing to consider a sale.  The problem is lack of well control over much of the suspected play area and the amount of acreage that will become available in prospective areas. 

Besides variance in rock quality across the play area there remains the looming specter of well cost.  I haven't found evidence to support any of the statements about well costs approaching the $10 to $12 million range.  The average for the twenty or so wells I can find costs on is ~ $18,275,000.00.  Although the cost to drill and complete any horizontal well has come down as drilling declines with the drop in crude prices, those costs will go right back up as the price improves and more rigs go back into the fields.  The TMS probably needs a combination of well costs below $12 million and crude prices above $85.  That could make development wells sufficiently profitable to cover the near break even costs of drilling lease capture wells.

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