Replies to This Discussion

Permalink Reply by Bobi Carr ("parker") on February 15, 2013 at 15:42

I wonder if they are looking for liquids in their existing wells are going drill to hold new units?

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Permalink Reply by Skip Peel - Mineral Consultant on February 15, 2013 at 16:16

ECA must be coming back for that "oil below the Haynesville"!  Disclaimer:  Not Really!  Their statement concerning the ability to make an acceptable profit at $3.00 mcf gives me the chills.  The market doesn't need any more dry gas.  And taking into account deductions for treatment and transportation I don't think $3.00 would thrill many royalty recipients.

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Permalink Reply by Andrew on February 15, 2013 at 21:14

Agreed. I'd much rather they leave it in the ground until the price comes up another dollar or two.

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Permalink Reply by Bobi Carr ("parker") on February 16, 2013 at 3:07

I was hoping more for condensate above the Haynesville, and no I will not be happy with $3.00 gas.

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2013 at 6:02

No, not "The Oil Below The Haynesville!  Say it's not true, Kathy!  :-)

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2013 at 7:13

Yeah, the O-U-T-H rumor in E TX got tied to the events you mention which I think tended to make it seem more plausible.  Over here in N LA the rumor was based on laymen opinions of why seismic shoots were being conducted in areas already leased and producing for the Haynesville. Which in turn was supported by industry field personnel whispering about deep oil.  And laymen misconceptions that operators were drilling pilot holes in Haynesville wells down into the Smackover Formation or deeper.  I never found anything that would tend to connect the seismic to any formation other than the Haynesville.  I don't know if the industry members believed the rumors or just got a misguided kick out of spreading them.  The pilot holes to the Smackover were commonly drilled no more than about 50' to 100' into the formation which was to ensure that the vertical wellbore had penetrated the entire extent of the Haynesville, not to test the Smackover.  A number of operators in the southern reaches of the Play had already make public statements or filed reports with the state that indicated the increasing vertical depth of the wells were resulting in Bottom Hole temperatures approaching 400 degrees F.  It was common knowledge by then that the Haynesville in all except the most northern fringe was quite dry.  It just didn't make sense to think that any deeper hydrocarbons would be "wet" much less oil. 

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Permalink Reply by adubu on February 16, 2013 at 8:16

I am very surprised they would drill dry gas Haynesville at $3.75 gas price for a 30% ONLY ROI I thought most operators wanted expected possible 3-4 to 1 ROI to drill any well oil, gas or wet gas with liquids or what ever they drilled because nothing is for sure especially with a $13-14 million investment on drilling these type wells.

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Permalink Reply by Bobi Carr ("parker") on February 16, 2013 at 8:39

I am the eternal optimist, but I gotta think they are after something other than dry gas.  This is Encana we are talking about not Chesapeake.  

Unless Aubrey has landed some advisory role at ECA, they don't usually try to sell the Koolaid.  IMHO.

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2013 at 8:48

Not that it makes that much sense to me but ECA's well costs in the TMS are quite high and do not seem to be coming down as the progress of the play is quite slow.  I do believe they have much more reasonable F&D costs in their HA wells and know what they will produce per completion.  When you have rigs under contract you must have something for them to drill. They must think the HA economics are significantly better.

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Permalink Reply by adubu on February 16, 2013 at 9:33

SP-- guess like you say --drill em or lose it

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Permalink Reply by Bobi Carr ("parker") on February 16, 2013 at 9:44

At $3.00 gas, I would think it would be better to lose them.

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2013 at 9:50

Cash flow from less than optimal operations required to service debt.  The long and still lingering Haynesville hang over. 

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