Replies to This Discussion

Permalink Reply by Sunny Chaw on June 9, 2013 at 3:25

Skip, if they really destroyed the casing, is it salvageable? Would it depend on the severity? With the hole SWN has dug themselves in this whole adventure, is there any other way out than exit?

Permalink Reply by dbob on June 9, 2013 at 5:42

A segment of destroyed casing may be salvagable, but it will likely require a work over rig and some other efforts.  At some point, it might get cheaper to simply drill a replacement well, but you don't know until you try.  

I think SWN will keep at it, even if this particular well is an expensive learning experience.  

Permalink Reply by Sunny Chaw on June 9, 2013 at 6:10

If the whole incident was a "good sign" of wet gas, maybe they will keep at it. Would hate to see the whole venture crater.

Permalink Reply by Skip Peel - Mineral Consultant on June 9, 2013 at 6:19

Sunny, too few details to speculate.  To the best of my knowledge all of these wells have "pilot holes".  That means that the vertical wellbore has been drilled through the entire thickness of the target formation.  This is done in order to determine just where (depth) to land the lateral. If SWN likes what they saw in the pilot hole they may "side track" (move up hole to good casing and kick off another lateral or they can plug this well and drill another.  .

Permalink Reply by shale player on June 9, 2013 at 14:15

If the casing parted or was crushed, there is virtually no way to fix it.  They would have to back up into the vertical section, set a whip stock, then sidetrack and try again - and this assumes that they have the hole size to do this.  This would be a very expensive operation and Willie seems to be getting tired of all of this. 

These problems could not be hidden from potential JV partners.  I suspect it is why the Asian company (rumored to be Asian) backed out.  They got spooked and I would have too.

Sorry, this really sucks but it is true, based on what people inside SWN have been saying at local Houston restaurants. 

They should take more care when out dining not to speak so loudly about their problems.  It is unbecoming of engineers managers and geologist to cry in their beer. 

Permalink Reply by Glenn Kadison on June 9, 2013 at 14:30

If they handle exploration the same way they handled PR about the purported JV partner, that would be reason to cry in a beer. They should go to the Hill Country to do their moaning. Too much of an audience in Montrose.

Permalink Reply by Sunny Chaw on June 9, 2013 at 15:24

Shale Player, if you mean William Way (COO), there is a reason why he could be a little miffed. He was one big officer who made a major acquisition of shares back in December. Think they are ready to cut and run?

Permalink Reply by tony allen on June 9, 2013 at 18:32

The LSBD play is not defined by the existing efforts. It is not about a few mechanical problems that exist in a few wells. It spans millions of acres. Other operators might improve on SWN's efforts in Union Parish and other areas. SWN has a minority interest in the LSBD. Fortunately, we have many more operators investing in the LSBD and other prospective formations in our area. This game is far from over.

Permalink Reply by North LA on June 10, 2013 at 8:04

SWN should be able to add some color to this tomorrow. Maybe some of the financial guys read this board and will ask some questions.

 

http://www.investorcalendar.com/IC/CEPage.asp?ID=171045&CID=

Permalink Reply by Francis Mayo on June 10, 2013 at 8:54

I am sure Investor Relations have been prepped by the Chief Operating Officer William "Willie" Way and if the whole problem can be ignored, it will. Otherwise, I am glad there is more to this play than SWN and LSBD. I will be listening and I hope Shale Player will provide comments afterward. 

Permalink Reply by shale player on June 10, 2013 at 11:21

Mayo,

If the guys in the bar are to be believed, Mr. Steve Mueller will have some explaining to do on Tuesday 6/11/13.  I'm from northern LA and have family that still lives in the area.  Unfortunately, SWN is the largest lease holder in the area they deemed to be in the best window and their wells are falling apart like matchsticks.  Bummer.

Maybe since the conference is in Canada it will be blacked out in America?!

Sorry Willie

Permalink Reply by shale player on June 19, 2013 at 12:26

Lots of juicy tidbits coming in from Conway and from the people closest to what is actually going on with SWN's operations.  Unfortunately it continues to be all bad news.  Hopefully some of the second movers in the play can show more competency in terms of actual execution.

I'll summarize the latest rumors early next week including the massive lease renewals that SWN faces going into late 2013 and 2014.  These payments, if all made, could eat up 10-12%+ of SWN's entire projected capital budget in 2014+ and there is no way Willie is going to let that happen without some Asian company picking up the tab (and we all know how that worked out).

My advice: Don't spend your lease renewal money before it's in the bank and don't count eggs as chickens.  Not all eggs result in chickens - some get eaten by Willie.  

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