Replies to This Discussion

Permalink Reply by Coonman on October 17, 2008 at 10:53

Mine disappeared..... I have no shale or gas under my property

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Permalink Reply by CMI A1 on October 17, 2008 at 10:55

Man, do we need send out a coondog gasdog to find it?

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Permalink Reply by SharonB T18N R15W S8 on October 17, 2008 at 10:59

CMI A1 - I agree. my section is 96% leased and I'm a hold out.

Coonman - where did your HS go? Up and out through a drilling rig I hope.

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Permalink Reply by Coonman on October 17, 2008 at 11:00

nope it just left.... I guess it vanished

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Permalink Reply by Grice on October 17, 2008 at 11:03

If you provide the milk jug, I will give you a gallon of mine.

PS. Bring a BIG shovel.

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Permalink Reply by JWindom on October 17, 2008 at 11:15

Here is what Aubrey said when he was attracting investors. He stated the numbers but did not get the math correct. 2.4 million divided by 6.5 Bcf works out to $0.37 mcf or chump change when he can sell the gas at the market rate prices.

Also note that per their recent conference call on Thursday October 16, 2008 session 2 the estimated ultimate reserve (EUR) for HS shale was stated in the range of 4.5 to 8.5 Bcfe for a mid point of 6.5 Bcfe. In the same document the Barnett EUR is only 2.65 Bcfe.

The question for Aubrey is why should not the higher production yield volume of the gas in the Haynesville Shale demand a higher lease price? Like 6.5/2.65 = 2.45 times the Barnett lease prices?


Aug. 01. 2008 / 9:00AM, CHK - Q2 2008 Chesapeake Energy Corporation Earnings Conference Call

Aubrey McClendon - Chesapeake Energy Corporation - CEO
Well Suvas, a couple different thoughts there. The first is that the amounts of money involved in grabbing acreage in places like the Barnett or Haynesville are absolutely staggering. To go out and buy 10,000 acres in the Haynesville today, if you could do it, would cost you over $300 million. There are just not many companies at the end of the day that can write that check, then also have the technical resources to go out and drill the wells. Having said that, to spend $30,000 an acre as Plains did for acreage from us is kind of chump change when it comes down finding costs. If you think about that 30,000 an acre on 80 acres is $2.4 million, and you're finding 6.5 Bcf in that 80 acres and after royalties, that number gets down to be about $0.50 an Mcf, so is it rational for the industry to pay $0.50 for the right to go develop gas reserves at $1.33 in the ground? Absolutely.

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Permalink Reply by Rick on October 17, 2008 at 14:48

KB, that's a good point and one worth remembering and holding on to for those that are not leased; the economy has no doubt had a big effect on these companies just like it has all companies, but one of two things is gonna happen; either the countries economy will bounce back or the country will go under completely, and so far every time things have turned sour in the past 100 yrs, the country has come back!
I think you'll see interest picking up again and probably before the economy completely recovers, there are alot of big O&G's that are most likely watching what is going on with the HS and ready to move in when the time is right. CHK & HK have leased alot of land but with the dropped leases and other factors, there is still alot to be leased in the HS footprint. This is however a good opportunity for some of the companies to try to scare folks into leasing low with the old," you better sign, you saw what happened back in October" trick. But as you reminded "A.M" made alot of statements that have haunted the landmen and the $812,000/acre was another of those; that should make it worth $406,000/acre @ $5.00 n.g. and about $609,000/acre @ $7.50 and $7.00-7.50 is a likely range for the next few months, so that's still a bunch of money and reason to continue to seek top lease bonus money.

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Permalink Reply by Carter on October 17, 2008 at 18:28

Sing it, Baby.

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Permalink Reply by Carter on October 17, 2008 at 18:31

p.s. this might very well have began as an e-mail, but AM used the exact same words during the investor/analyst presentation this week.

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Permalink Reply by Cleveland Steamer on October 17, 2008 at 16:57

great stuff from Bill Simmons on espn.com:

Insert sound of depressed Seattle fans cranking Soundgarden, smoking cigarettes, staring out the window and watching the rain fall. Black hole sun ... won't you come ... to wash away the raiiiiiiiiiiiiiiin. This is just cruel. Hey, at least you can look forward to me trashing Kevin Durant's Future Former Team during the NBA season and making jokes about Aubrey McClendon losing so much of his $2.1 billion nest egg during the current Wall Street swoon that he's being compared to the Dukes in "Trading Places." Looking good, Aubrey! Feeling good, Clay! Good times! One down, one to go. Now, we just have to wait for the Karma Police to come after Clay Bennett like those three psychopaths in "The Strangers." And you know it's coming. That's just how these things work. By the way, let's add the "McClendon Margin Calls" to the ever-expanding list of pseudonyms for the Team That Shall Not Be Named

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Permalink Reply by Cathaus on October 17, 2008 at 18:38

Well, at least you had gas for a while. Apparently, I never had any and have no hopes of getting any in the foreseeable future.

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Permalink Reply by HBP on October 18, 2008 at 2:58

what if:

-an operator begins to develop your section
-but its before the "mega bonuses" find their way back
- and the operator has enough acreage under lease to force pool those still holding out for said Mega Bonuses and/or a certain lease form.

This is not a rhetorical or loaded question, I just see this happening since the companies are basically on a 3-5 year clock right now to HBP units or else lose leases, so there may not be alot of time in some areas to negotiate the gap we have between the market bonus per acre and Mega expectations.

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