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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2011 at 15:33

Not enough information is provided to answer your question, Jamie.  You need a township and range to go with the section 26 or a physical description of the location that can be found on a map.  There are many section 26s in Red River Parish.  In fact one in each township.

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Permalink Reply by Jamie on June 17, 2011 at 15:47

Sorry I am new at this - still tring to learn everything.  Hopefully this will help

Section 26, Township 12 North, Range 9 west

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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2011 at 16:00

Jamie, this is the place to learn the basics and find out what is happening in the area of your mineral interest.  Section 26 - 12N - 9W is an EnCana drilling unit.  There is no well currently permitted for this section.  What do the pipes you refer to look like?  Size and length?  And do I understand correctly that the well pad has been constructed but not rocked?

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Permalink Reply by Jamie on June 17, 2011 at 16:08

The pipe lines were put in and buried about 6 months ago.  The pipes where long and probably about a foot in diameter.  (not sure on specifics)  They all connected with pipes from other sections, I believe, that were already producing.

 

They came in cleared a site area (it had pine trees) flattened the land, and put up bigger electricity equipment (believe transmitters).  We were told the that the night before the rock was suppose to be delievered to the site for the well drilling - it was all canceled. 

 

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Permalink Reply by Les Bamburg on June 17, 2011 at 16:38

Jamie, the pipeline was part of the Centerpoint Energy Field Services gas gathering system installed for EnCana/Shell.  Information over the last 6-9 months indicates EnCana/Shell have suspended further drilling activity in this region for various reasons.  Eventually activity could return but timing is unclear at this time.

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Permalink Reply by Jamie on June 18, 2011 at 3:37

Ok thanks for the information!!!

 

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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2011 at 16:41

EnCana abruptly changed their development pattern shortly after the first of the year.  I suspect that it is a corporate decision driven by economic realities rather than any problem with the prospective nature of the shales in your section.  EnCana has more Haynesville Shale leasehold than they can say grace over and enough well locations to drill for years to come.  They announced in the Spring that they were allowing 12,500 acres of leases to expire in the southern and southeastern areas of the Play.  From your description it appears that S26-12N-9W may fit this scenario.  Until the price of natural gas improves companies will be forced to spend their drilling budget in other areas prospective for oil, condensate and liquids or drilling alternate unit wells in sections that are already developed as EnCana is doing now in NW. LA.  I hope you are in a position to be patient as it may take a few years for the expansion of the Play to get back on track.

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Permalink Reply by Jamie on June 18, 2011 at 3:37

thank you for clearing that up for me!!  I greatly appreciate it!

 

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Permalink Reply by Checkmateking on June 18, 2011 at 9:05

Skip, 

 

What is Encana's reasoning behind spending drilling capital on alternate unit wells when they are letting leases expire? This just doesn't make any sense to me. 

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Permalink Reply by Skip Peel - Mineral Consultant on June 18, 2011 at 9:15

The cost to produce the gas is less per mcf.  In other words, they are not building any more roads or pads, not acquiring any more leases or rights-of-way, not building any more pipelines, etc., etc.  And they are drilling where they know the rock.  As stated in their last webcast, they had stepped out so far south that their wells were beginning to experience challenges associated with depth (temps and pressure) and faulting.  EnCana allowed/is allowing 12,500 acres of leasehold to expire.  I think a conservative estimate is that number would equate to somewhere in the range of 35 to 45 sections.

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Permalink Reply by Mark Tobey on June 18, 2011 at 14:58

Hi Skip,

 

I'm new to this as well and wanted to ask if you may have knowledge of lease extensions in Section 8, T18N, R15W. My dad's lease expires in November with an option for an extension at $2,000/acre (approx. 150 acres) with Chesapeake.

 

With what I've been reading on other threads, I can't get a grasp as to how I should advise him. My understanding is that this part of the play is allowing a fair number of relatively large parcels to expire. Any information you could provide would be greatly appreciated.

 

Thanks and kind regards.

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Permalink Reply by Skip Peel - Mineral Consultant on June 18, 2011 at 15:27

Hello, Mark.  Chesapeake hasn't extended any leases in 18N-15W that I am aware of.  For all practical purposes they pulled out of this area of the Play almost two years ago.  I am unaware of any interest by other companies in leasing this area at this time.  It will likely be some years before development interest returns and we get a better idea of the prospective nature of the shale in the Cross Lake area.

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