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Comment by Les Bamburg on December 8, 2008 at 8:33

Skip, attached is a listing of HS acreage holders I compiled. Let me know if you have any questions.

Company HS Acreage Positions 12-8-08.pdf

Comment by Skip Peel - Mineral Consultant on December 8, 2008 at 2:35

Hello, Cheerleader. I am unsure if your reference of a "big operator" is from this blog post or some other discussion topic on Nov. 24. The current shale player that is often overlooked is the Encana/SWEPI operating partnership. That is one of the significant facts to be gleaned from the ranking. Another dynamic is the amount of HS acres underlease, HBP or unleaseable as compared to the current projection of the total acres within the boundaries of the prospective HS. The fact that those remaining acres are in large part non-contiguous and/or located on the outer edges of the current boundaries makes it highly unlikely that any new "big operator" will enter the play in such a way as to bring bonus offers back to their summer levels. Any new major player can only enter the play at this time by buying out or joint venturing with an existing operator or operators. It is my assessment that baring any significant expansion of the boundaries, the circumstances do not exist for one or more new players to substantially recreate the dynamics of competition that drove the escalation in bonus offers.

Comment by Cheerleader on December 7, 2008 at 19:47

Skip,
On Nov. 24 you referenced a "big operator" entering the play.. can you share who you have heard the "operator" to be?

Comment by Skip Peel - Mineral Consultant on November 30, 2008 at 16:26

Mattie. Can you give me the serial # of the Harris well? Or a section/township/range? Encana has unit applications scheduled for 20 drilling and production units in three different fields prior to the close of the calendar year. That's 12,800 acres of leasehold and tends to confirm my projection that as other operators have scaled back development activity, Encana would begin to stand out. Not only within the townships they have been previously associated with but also into new areas of the HS core area. As to their past success with the drill bit, Shell was the one playing possum. Shell (SWEPI) has applied for 53 D/P units in the last 30 days (five different fields/33,920 acres)). If they were not having success, they would not have become this active.

Comment by Mattie on November 30, 2008 at 16:05

Skip,

Has SWEPI/Encana had better success with the drill bit lately? In particular, what's the latest on their Harris well.....heard rumors they've filed for more units in the immediate area...not necessarily an indication that they'll continue to drill in the same area right away, but curious as to recent success or failure in completing their wells??

Comment by Skip Peel - Mineral Consultant on November 29, 2008 at 7:45

No. Auglaize. As I state in the introduction, I am unable to do so at this time. The reports from which the acreage positions are taken do not give the specific location, just total leasehold in the HS play as of the date of the report. There is extensive leasehold HBP in both E. Texas and NW. LA.

Comment by Craig Cooper on November 29, 2008 at 6:08

Skip, do your estimates include the Texas side of the play? BP and others have quite a lot of HBP acreage and are active.

Comment by Skip Peel - Mineral Consultant on November 24, 2008 at 13:11

GS. I think so. And have hinted at such in previous posts. Particularly my previous blog on the chronology of the early HS Play. Encana was onto the play from the very beginning. And their relationship with SWEPI is significant. Shell is the only Major O&G involved in the play at this time. I doubt that Shell has a problem, as other well known HS operators do, with cash to invest in the development of the play. If Shell believes in this play, I expect that they will move to buy out others or become a major JV partner.

Comment by Skip Peel - Mineral Consultant on November 24, 2008 at 11:50

Two Dogs. I am just scrapping the surface here. There is much info not public record. There has been speculation about a big operator entering the Play and pumping bonus offers back up to summer levels. I got to thinking about the unleased acreage remaining out of the 3.5M Chesapeake claimed. I am thinking that leasehold is approaching the 3.0M level. I doubt there are any large, contiguous unleased areas left for a major new player. Any major would only enter the Play by acquiring the leasehold of one or more companies with significant existing acres under lease or HBP. It's bits and pieces from here on out. I was gratified to see the Questar announcement today on their two latest completions. Good wells. And they stated their current leasehold at 31,000 acres. My estimate was 30,000. Not bad, huh?

Comment by Two Dogs, Pirate on November 24, 2008 at 9:00

The Evans boys leased 26968.64 acres to CHK in Sabine Parish a while back. They also leased in other parishes but those may not be of record.

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