Energy companies switch focus from signing leases to drilling
By JIM ROBERTS jroberts@ktbs.com
Created: September 18, 2008 03:27 PM
Modified: September 18, 2008 03:27 PM
The early rush to lease land for drilling in the Haynesville Shale could be over as energy companies step up drilling for the lucrative gas field.
Billions of dollars have been raised and spent by companies to buy leases this year. Now those same companies have to drill wells and get production and money flowing.
Leases are still being negotiated and signed -- but with so much money tied up in leases, energy companies like Petrohawk and Chesapeake have to start turning those leases into producing wells.
Petrohawk, one of the shale's big players, has leased some 300,000 acres with gas producing potential. They have three years to get much of that land in production or the leases will expire.
Petrohawk said it plans to have 140 operating wells by the end of next year.
"Companies with a substantial amount of acreage are going to want to drill those prospects," said Don Briggs of the Louisiana Oil and Gas Association. "They're going to want to get those wells drilled.
As more gas wells are completed, that will free up equipment and crews for new wells.
"I believe the leasing will continue," Briggs added. "I can't say at what rate. I certainly don't believe it's leased up."
Petrohawk said it plans on spending nearly $1 billion drilling and producing natural gas in Northwest Louisiana this year.
Briggs said that while lease bonuses get the headlines, the biggest economic impact is from drilling and production.
Created: September 18, 2008 03:27 PM
Modified: September 18, 2008 03:27 PM
The early rush to lease land for drilling in the Haynesville Shale could be over as energy companies step up drilling for the lucrative gas field.
Billions of dollars have been raised and spent by companies to buy leases this year. Now those same companies have to drill wells and get production and money flowing.
Leases are still being negotiated and signed -- but with so much money tied up in leases, energy companies like Petrohawk and Chesapeake have to start turning those leases into producing wells.
Petrohawk, one of the shale's big players, has leased some 300,000 acres with gas producing potential. They have three years to get much of that land in production or the leases will expire.
Petrohawk said it plans to have 140 operating wells by the end of next year.
"Companies with a substantial amount of acreage are going to want to drill those prospects," said Don Briggs of the Louisiana Oil and Gas Association. "They're going to want to get those wells drilled.
As more gas wells are completed, that will free up equipment and crews for new wells.
"I believe the leasing will continue," Briggs added. "I can't say at what rate. I certainly don't believe it's leased up."
Petrohawk said it plans on spending nearly $1 billion drilling and producing natural gas in Northwest Louisiana this year.
Briggs said that while lease bonuses get the headlines, the biggest economic impact is from drilling and production.
Views: 32
Replies to This Discussion
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Permalink Reply by Kassi on
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Very true, the O&G Companies have to get some drilling done or they will be re-leasing property they already leased once. There are new players coming into the game though, Shell is in South Desoto now. They have not been onshore in a play that I can think of in many years.
Leasing has slowed but not stopped. That is a good thing in a lot of ways. Now people can take a breath and make wise instead of rushed decisions. Look at more than a dollar sign and have responsible leases negotiated.
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Permalink Reply by Spring Branch,mineral owner on
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Shell has been in northern Sabine and South Desoto for a good while, now. In addition they are a 50/50- partner with Encana.
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Permalink Reply by Bobi Carr ("parker") on
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SB,
Is Shell doing any projects on their own? I was aware of the partnership with Encana, but have they started anything on their own that you are aware of?
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Permalink Reply by Laman_71106 on
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I believe we will see cycles of off and on leasing. Even at higher and higher bonus payments. Case in point: http://www.blognetnews.com/energy/go.php?http://feeds.feedburner.co...
Ft Worth and Barnett Shale still cooking!
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Permalink Reply by SL on
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Does it affect those leases that are already signed, and waiting on drafts? Or is it just new leases they are slowing down on?
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Permalink Reply by Landowner on
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I believe that if they start drilling and hit some good wells, it will encourage a lot of new players. Petrohawk and Chesapeake needed to stop leasing and start drilling. You have it right Kassi, people needed to take a breath and make wise decisions and I am one of them.
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Permalink Reply by bagger on
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How do you find out if they will be drilling in your area in the near future? People are very tight lipped in this part of Sabine Parish for some reason. It's very hard to find out any information.
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Permalink Reply by Landowner on
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If you are leased, then go to that companies web site and send them an email or give them a call.
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