landowner

"Haynesville Shale Activity Continues to Decline"

 

Very worrying article today in Investopedia........here is the link:

 

http://stocks.investopedia.com/stock-analysis/2011/Haynesville-Shal... 

 

I've always worried that things would come to a grinding halt just when they reach the boundary of our pooled acreage! Hope this isn't the case!

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Oil & Gas ProPermalink Reply by Les Bamburg on August 23, 2011 at 15:30
Mike, initial exports of LNG will not occur before 2015 and operators of these projects have stated the exports will not have a material impact on US natural gas prices. 

Oil & Gas ProPermalink Reply by Robert on August 23, 2011 at 2:02
There is more to come on the Haynesville Shale. A little birdy told me that a certain company is bringing a  number of rigs back to the play.  Can't go much deeper than that at the moment.

landownerPermalink Reply by Spring Branch,mineral owner on August 24, 2011 at 10:47
I agree.

landownerPermalink Reply by Rozzy on August 24, 2011 at 12:25
BHP is right... I agree as well... :)

landownerPermalink Reply by VHaddad on September 8, 2011 at 4:48

what do BHP, HA and HP stand for?  Just sitting here with a broken leg and nothing else to do but wonder....

 


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on September 8, 2011 at 5:04

BHP Billition:            http://www.bhpbilliton.com/home/Pages/default.aspx

 

HA:   Louisiana Department of Natural Resources/ Office of Conservation official abbreviation for the Haynesville formation.  Generally speaking, the HA as defined in drilling & production units also includes the Bossier Shale.

 

Not sure where you got HP, VH.  If you mean HK, it's the stock symbol and oft used abbreviation for Petrohawk.


Oil & Gas ProPermalink Reply by John on August 23, 2011 at 5:40
I believe the article on http://www.investopedia.com is not entirely accurate. They state... "Petrohawk Energy (NYSE:HK) has also cut its rig count sharply and is currently operating six rigs in the Haynesville Shale, compared to an average of 11 rigs during the second quarter of 2011." That seems to be a fraction of their activity. I think the reporter was using a very large paintbrush to paint this picture in his article. I know they are operating many more rigs than 11. How would you explain HK's attractiveness to BP??? To purchase Petrohawk for 12 Billion with operation of only "6 rigs?" That is reckless ascertainment. The facts seem very, very loose. Plus, that news is on the ticker on the stock application I have, so it is in wide release.

Oil & Gas ProPermalink Reply by The_Baron on August 23, 2011 at 7:34

BHP bought HK for far more than their HA acreage and activity. Personally, I beleieve that while the proven reserves in the HA looked attractive to BHP, it was HK position in the Eagleford, and Permian Basin that made the deal (liquid rich plays). HK has steadily moved rigs westward to these plays as they have HBP the HA.

 

Now I have heard rumours about more activity by HK in the HA, but only time will tell.


Oil & Gas ProPermalink Reply by Les Bamburg on August 23, 2011 at 15:35

John, the article's statement regarding Petrohawk's rig count is fairly accurate as their rig count in the Haynesville Shale was dropped to 7 rigs in mid-July.

 

Much of Petrohawk's activity is in the Eagle Ford Shale where they are operating 14 rigs.  The value is in current production and prospective acreage rather than in the number of drilling rigs.   


landownerPermalink Reply by MKM on August 23, 2011 at 9:36

 

Thanks for all of your input.........I feel a little better, and appreciate your thoughtful answers.


landownerPermalink Reply by Hopeful About Natural Gas on August 23, 2011 at 10:39

The GOOD news is that BHP has tons of cash from its gold operations.  But, it seems like they wanted the expertise of Petrohawk.  That is worth a lot.  BHP has the cash to let Petrohawk sit on leases waiting for higher prices or they could develop the leases faster - but they don't have to since they have the money to float HK for years (think of how gold prices have risen) 

 

They bought Petrohawk for their brains not just their leases.  I expect HK to become very powerful with BHP - but that does not mean they will drill holes right away. They have the cash to sit and wait.


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 23, 2011 at 11:12
Although Petrohawk has a large acreage position in the Haynesville Play, their drilling & production units are scattered and non-contiguous to an extent much greater than their competitors.  This is a big problem that I expect they will move to correct with BHP funding.  The great advantage of an unconventional reservoir such as the HA/BO is the shared infrastructure system that will serve multiple wells over an extended period of development.  Early on the analogy was that development of the shale would be more akin to manufacturing than to traditional exploration and production methodology.  Petrohawk's early capital problems caused them difficulty in building consolidated operational blocks of units that would allow them to take advantage of concentrated infrastructure.  I called them "stranded" units in the early phase of development and a quick review tends to confirm that the situation still exists.  It's not too late for HK to improve their long term position.  I hope they move aggressively to do so.

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