Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on September 18, 2021 at 2:41

I hear a lot speculation about buying on inside information.  I personally know of one company that does because they own a large mineral position and a close working relationship with the operators that develop their acreage and suspect there may be a handful of others but in my experience, with dozens of companies that acquire minerals, their acquisition strategies are not informed by inside information.  There are plentiful sources of data, public and private, that can inform where companies make offers.  Inside information is not required as there are no dry holes in the Haynesville Shale.

Permalink Reply by Thomas C. McKowen, IV on September 18, 2021 at 6:28

But we would not know the extent of the Haynesville Shale until wells were drilled on the outskirts.  And I don't think such wells will be drilled in the present environment.  There are too many better locations.

Permalink Reply by Skip Peel - Mineral Consultant on September 18, 2021 at 6:38

The periphery of the play is where the action is currently.  Those areas provide opportunities to lease and develop minerals not previously included in the defined fairway or in areas where improvements in drilling and completing wells have supplanted the non-economic early play wells.  An example of the of the first is the far south end in of the fairway in north Sabine Parish.  A couple of examples of the second is USG Properties, first with operating partner Comstock and now with Trinity Operating, in north Caddo and Indigo along the flanks of Natchitoches Island in the NW corner of Natchitoches and adjacent Sabine parishes.  There were early wells drilled in all those locations that were not that impressive.  High intensity fracs and long reach laterals have made those areas economic.  There are plentiful locations and many wells to come but a company is limited to where they hold development rights.  USG and Indigo had those later hot spots to themselves.  The operators in the SE corner of the fairway had little competition as Vine and GEP Haynesville often acted in concert to hold lease terms down.  At this time it is relatively easy to judge competition by the royalty offer.  Many thought we would never see 3/16ths. royalty fractions ever again.  Now they are quite common.

Permalink Reply by Thomas C. McKowen, IV on September 18, 2021 at 7:10

Any thoughts on the southwestern part of Harrison County, Texas?

Permalink Reply by Skip Peel - Mineral Consultant on September 18, 2021 at 7:36

Only from a landman's prospective.  The E TX Haynesville map I am using currently depicts a northern edge of the fairway south of Marshall and just south of I-20 that extends from the LA line about to Hallsville.  Anything north of I-20 and west of Hallsville is out of the play at this time.  Going south, development picks up a good bit when you get to Hwy. 2625

Permalink Reply by Thomas C. McKowen, IV on September 18, 2021 at 8:28

We're just north of 2625 and southeast of Hallsville; so, I guess we have a chance.  Thanks for your thoughts.

Permalink Reply by Mister Sunday on September 20, 2021 at 4:11

Makes me think of a "darkrock" kinda company...

Permalink Reply by Thomas C. McKowen, IV on September 20, 2021 at 5:22

What is "darkrock" ?

Permalink Reply by Rock Man on September 16, 2021 at 8:41

I have attached a PDF with a 2011 Petrohawk slide showing the HV prospective area. The schematic (which is based on a lot of subsurface work on historical deep wells in NE Texas as well as HV results up to that point) clearly shows the "Shelby Trough" SW extension that runs thru Shelby, part of northern San Augustine and SE Nacogdoches Counties.

Any reputable mineral buying group is mining historical (and public) data like this plus watching industry permit and completion trends via various services. It is easy to outline and AOI to start to carpet bomb mineral owners with with offers to buy minerals.

I have never worked in a mineral buying group but know enough of these people to know that their "success" rate for purchasing minerals in the range of their offers only needs to be a few percent for them to consider it to be successful.

Then they are set to reap the benefits of future drilling and the subsequent 20+ MMCF per day HV wells.

Attachments:

• HV Shelby Trough .pdf, 198 KB

Permalink Reply by Skip Peel - Mineral Consultant on September 16, 2021 at 8:45

The Petrohawk maps from the early years of the play were quite good for the data available at the time.  With some minor modifications, they are still good.  I use them to this day.

Permalink Reply by Bill R on April 6, 2022 at 7:29

Wonder when Aethon is going to have some additional Drilling Rigs brought in to start spudding some more wells in the County?

Permalink Reply by Rock Man on April 6, 2022 at 7:40

Considering the cost of drilling, I would not expect a big uptick in rig numbers for any operator. Keep drilling on a steady basis and not try to increase number of wells too much.

And there is always an issue in getting frac crews to complete any new lateral - having a lateral sit there and not being able to frac it is just leaving $$ in the ground that is losing value on discounted basis.

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