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Permalink Reply by Birdsview on September 8, 2020 at 15:58

Hello everyone 

Has anyone Heard if comstock oil and gas co. is going to take over other sections in the 14 n 14 w  area in desoto parish.

I was courious if they were going to obtain other sections such as 17 /18 /19 /20 and others. According to a very large map i purchased a while back it shoes 9 or more sections all connected side by side where 18 and 19 14 n. 14 w. are which it shows Gep owns but now comstock now has their name and company number at the top of the page on about 6 sections or more  in the middle of the adjoining group of sections Gep owns ..This also is where comstock took over 6  sections in that area.Maybe  comstock is going to drill half of them and Gep are drilling half of them. who knows but it would nice to know anything more. I know that both companies are good people. it also looks like comstock has more drilling rigs in the desoto parish area that Gep.   Gep has one rig drilling and comstock has 4 rigs in that area.  All i can say about both companies they both are capable to drill massive amounts of wells and it doesn’t matter to us who does them but it would be nice to see something happen in November or sooner like folks are saying that things will start up some drilling activity in the near future.   I  have only one thing to say and that is  DRILL BABBY DRILL  and let me see you impress me Lol.

Everyone have a nice and blessed day and good luck to us all.

Hey Skip maybe you or Keith or someone else that knows more could tell us more.

Thanks to all that can contribute any info.

Thank You

Kenneth Bird

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Permalink Reply by Skip Peel - Mineral Consultant on September 9, 2020 at 2:22

There is nothing in the public data currently concerning Comstock development plans for the near future regarding these sections.  Comstock would have to apply to the state for alternate unit well spacing before the company could apply for a permit to drill, so a couple of months at the earliest.  I suspect that new wells will have to be drilled relatively soon owing to the low production volumes in most of these units placing the leases at risk for a "production in paying quantities" lawsuit.  Likely GEP Haynesville didn't want to drill so they off loaded the units with a requirement that Comstock drill wells to protect the HBP status of those sections.

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Permalink Reply by Birdsview on September 11, 2020 at 17:19

Thank You Skip for your good input on my information. I follow your answers of folks questions for quite a long time now and you and Jeff seem to have a lot of knowledge of the oil and gas business. 

I had gotten a hearing letter last year about our section 19 14n 14w  and it had the usual map with it showing what future plans were for our section and i was wandering if you would mind  taking a quick look at it and tell me your opinion of it. I been filling this page and you  and Jeff since 2009 when the first gas was drilled and i do understand and have learned a lot of oil and gas information just from everybody on here and especially you two guys responses over time and i have self taught myself quite a bit and it has always been interesting to me but there are a few things i don’t know and i was interested in seei got what you guys interpretation was of our map on section 19 . 

We our family among 6 grown children 50 to 70 years of age own minerals of about 70 to 80. If you don’t mind i can put it on here or private message you.   I believe it shows besides the one well from 2009 looks like they plan 4 or 5 new wells or 4 and one refractions of the old well that is almost depleted which is down pretty low money wise now.

I would like to send it if you have no problem with that and i really appreciate you all helping us out as yaw have done for so many other folks in the past years.  Also in your recent reply to me the other day you said comstock was taking over some of our company Geps wells in the holly field very near us that you thought comstock was getting these section to do Held by Production ( HEP ) but i went back and looked at those 6 section the Gep traded or sold and they all already have at least one and or two wells HPD so Gep didn’t need to get rid of those sections to put a we’ll to hold the section.  I  have heard from some folks that at the first of this November beginning forward there will maybe be more drilling activity in the holly field and other areas to due to oil prices and shutting down oil wells around the world and natural gas prices creeping up and staying fairly steady. Do you know any future plans of things maybe about to happen in that area coming up? It would be nice for everybody.  I have also noticed on all the oil and gas hearing letters and the internet map that for future drilling plans our company Gep and other drilling companies they are planning for 4 , 5 to 6 wells on almost every section in desoto parish. so i feel they are planning something big coming up in the future.  The right way would be for any gas company to drill these wells would be to help the property owners by producing only about one or two wells each year or every other year because otherwise big checks bring big tax bill with them if done all at once but any and everybody are in need of some extra funds or want it all at once if possible. LOL

I was guessing that all those companies drilling was drilling and shutting in wells and maybe when prices got a little higher they could lock in those wells already drilled with hedging prices and then suddenly turn all well already drilled and they would be making a fairly good profit of those wells already ready for production. I understand that from research that they can turn on or off wells by typing on a keyboard and computer from anywhere in the world which is a pretty neat way they can do that very interesting.

Thats what i kind of thought by the gas companies mapping out and drilling a lot of well in that area then put a hold on the well till price a bit better then turning them on. I think that why any of those drilling are doing a head of time then payday comes a short time later after they lock them in then they can start recovering some expenses right away.

I have read that now day they drill everything in the section and then move to another section that after they start drilling they don’t even take down much of the drilling rig and then they hydracially drive it a couple hundred feet over in the same section and start another well and they reall save a ton of money by not breaking down the rig and then moving elsewhere and i read just recently that they now like to frac new wells something about all at the same time to save even more money. I think that way they can save big and keep drilling etc. and come out good later.

Sorry for the long information just reply back whenever you get some extra time because there is no hurry or rush.

Anyway as always thanks for the input.

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Permalink Reply by Skip Peel - Mineral Consultant on September 12, 2020 at 1:57

You're welcome, Birdsview.  I reviewed the wells you posted to see the most recent production volume.  They are all largely depleted as you have noticed from your royalty payments.  Although there is a producing well in each of those sections and they currently serve to HBP the leases, some are now, and all at some time in the not too distant future, vulnerable to a mineral owner filing a law suit under a legal concept called "production in paying quantities". The regulation in the mineral code and the supporting case law prohibits a well operator from keeping a non-economic (money losing) well flowing for the sole purpose of maintaining the lease rights.  Go to SONRIS and look at the wells and you will see which ones are the most depleted. 

Comstock has been aggressive in acquiring wells and associated leases from a number of LA Haynesville operators:  Enduro, Chesapeake, and Indigo come to mind in addition to GEP Haynesville.  Comstock has a good reputation among mineral lessors and drills good wells.

The letters that your receive as an "Interested Party" should be viewed as "spacing applications".  The state requires that horizontal wells be subject to set backs from unit boundaries and from adjacent horizontal wells.  Approval of the application results in a Field Order but it does not constitute a well permit to drill.  Each well must receive a permit for its "slot" in the unit.  Although the state allows eight wells per standard governmental section, the standard has become six for all the Haynesville operators since they transitioned to high intensity fracks.  It is more efficient and cheaper to make one application for all the wells a company plans to drill in a unit.  That doesn't mean that they will drill all of those slots nor does it signal how many they may drill at a time. 

Although there is much anticipation for higher natural gas prices, it is impossible to know the internal decision making process of the individual operators.  Some have already "hedged" significant volumes of future production which is common practice.  Those hedges generally have been bringing a better sales price than the prices we see published.  Therefore an increase in price for un-hedged volumes isn't a help and once it becomes higher than the hedge price, it is a disincentive for operators to drill more wells as it means they are selling at a price less than the un-hedged market price.  That is an over simplification of the process but gives an idea of how complicated pricing can be.  Operators may very well be planning a different hedging program for 2021 with the expectation of better prices.  The only information that we the public can see is what is published by the publicly traded companies:  Chesapeake, Comstock and Goodrich.  The other companies are privately held and do not publish that type of information.

I hope this answers your questions.  A long answer for a long question.  Good luck with new wells.

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Permalink Reply by Birdsview on September 12, 2020 at 13:25

Yes Skip it does answer many of my questions quite a bit and i really appreciate you taking time out of your day to answer those questions for me and my wife and family.

I will pass this info to my brothers and sisters that own the remaining mineral interest.

Have a pleasant day.

Thank you

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Permalink Reply by Skip Peel - Mineral Consultant on September 12, 2020 at 13:27

You're welcome.  Take care, stay safe.

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