Replies to This Discussion

Permalink Reply by Two Dogs, Pirate on September 14, 2008 at 10:13

They can't get caught up with the land title abstracting on the leases bought so far.

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Permalink Reply by Checkmateking on September 14, 2008 at 10:15

thats a good one

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Permalink Reply by Bobi Carr ("parker") on September 14, 2008 at 10:20

CMK,
They leased my property over a year ago. They are presently negotiating a road through my property. They told me last week that they are presently working on the abstract. (Granted they wouldn't have lost much money if they were wrong when they did their first look. I only got $200 per acre).

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Permalink Reply by Two Dogs, Pirate on September 14, 2008 at 10:25

Parker when they bought your lease they did the abstract work to buy the lease. When they drill they do a full abstract then give that to an O&G attorney for a title opinion.

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Permalink Reply by Lrb2brnot2b on September 14, 2008 at 10:18

Do you think they are out getting the capital and will be back in 30 to 60 days?

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Permalink Reply by phaco on September 14, 2008 at 11:06

None of the above. Rig shortage, pipe shortage, casing shortage, personnel shortage. Lease more and it won't get drilled within the term of the lease anyway and then they have to compete to lease it all over again. That is why they are trying to discourage expanding the shale boundaries.

Now, they are trying to expand their market (ie transportation) to increase the domestic price. If that plan doesn't succeed, I expect CHK will build their LNG shipping plant. They will pay us LO royalties at a well head price of $6-8/MCF and sell "Hillbilly Gas" to Japan for $21/MCF.

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Permalink Reply by Two Dogs, Pirate on September 14, 2008 at 11:33

You are right but you are wrong saying that none of the above are right. In the short term they have abstracting problems, in the long term they have all the problems you stated. As Americans we will ramp up in the next couple of years to meet the needs you have spoke of.

People need the clause stating that the lessor will not share in cost of transporting, compressing, treating, dehydrating, liquification etc. built into their lease.

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Permalink Reply by Checkmateking on September 14, 2008 at 15:36

They are definitely trying to raise new cap, but phaco has a great point, when I say overleased I am implynig a shortage of rigs, pipe, labor, resources etc. thats what overleased means. If you had all the resources to drill your existing leaseholds then you couldnt be overleased. There is definitely going to be a bottleneck in production, infrastructure issues will be the long run problem in the next phase of development, the big boys need a new market to make this everything it could be, the NG car needs to become a real option.

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Permalink Reply by farmbrad on September 20, 2008 at 13:12

Devon & Encana both have it in their initial offer. It's up to the Lessor to negotiate it's removal.

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Permalink Reply by Two Dogs, Pirate on September 20, 2008 at 13:27

Make sure you add language that will cover costs to liquidify and move it by ship. I don't really know what to put in on this one maybe point of sale after transport? Some one may can give an answer but I for one can't. The USA has been an importer and not an exporter for so long that I don't think the question has come up. We are building import terminals and not export terminals.

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Permalink Reply by VSC DeSoto South on September 14, 2008 at 15:31

I hope and pray that does not happen.
That would be very opportunistic.
I hope that is not the ultimate goal, and the push for increasing domestic consumption is just a effeort to say they tried. All along knowing they wanted to have the Japanese gas all along.

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Permalink Reply by qwert on September 15, 2008 at 6:24

"Lease more and it won't get drilled within the term of the lease anyway and then they have to compete to lease it all over again. That is why they are trying to discourage expanding the shale boundaries."

This is why they are creating 640 acre units. The bigger the unit, the more property the company can hold indefinitely with one well. Barnett units are much smaller -- max out around 200 to 250 acres. No one seems to care that this is happening. By law, the unit is only supposed to be as big as the area efficiently drained by one well (La. R.S. 30:9.B). With the companies planning 80 acre spacing on their wells, does anyone seriously believe that one well can "efficiently" drain an entire section? Aubrey McClendon commented on these favorable conditions in a conference call and said they can "warehouse" the rest of the property in these over-sized units and don't face the "use it or lose it" pressure they have in Barnett.

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