Replies to This Discussion

Permalink Reply by George Willey on January 19, 2023 at 6:32

I wonder what the future of this section has in store?  The well is barely holding on producing less than 100 mcf per month.  The section is between some active drilling by Azul and some production by Southwestern Energy.  I wonder if it is more likely that XTO would come back in and refrac the well or if Azul, Southwestern, or another player would buy out XTOs ownership of the section?

Permalink Reply by Skip Peel - Mineral Consultant on January 19, 2023 at 6:51

First off, if you and other mineral lessors in the unit wish to force the issue, get an experienced O&G attorney to send a "demand to develop" as the well no longer meets the "production in paying quantities" test.  Be fore warned that attorneys or firms that XTO will know and possibly have past experience with will want a commitment to pursue litigation if XTO refuses the demand.  Filing those types of demands and not following up with a suit leads the O&G companies to ignore demands from those lawyers and firms in the future.  XTO does not prioritize the Louisiana Haynesville fairway.  They may just sit on Section 17 if they don't get an acceptable offer or no one forces their hand.

Azul is the most aggressive operator in the general area.  Keeping in mind that all companies wish to drill long lateral, multi unit horizontal wells, Azul could acquire 17 and then create an HA unit for Section 20 to the immediate south.  The other possibility that appears likely is Tellurian. The company has drilled some short lateral wells in Section 8 to the immediate north but could change and drill longer laterals by acquiring 17 from XTO.

Permalink Reply by George Willey on June 26, 2023 at 14:23

Spoke with a man from Azul and he said Section 17 and 20 are faulted at both the Haynesville and Bossier levels.  I'm not sure if they discovered this when the Faye Benning well was drilled or through the 2010 seismic work performed in this area.  Does this mean these sections will likely never be in play for Haynesville and Bossier formation drilling?  Someone told me that if the price of natural gas increased it might be profitable for them to drill parallel to the fault.  

Permalink Reply by Skip Peel - Mineral Consultant on June 26, 2023 at 14:36

George, the geologic sequence on and in the immediate vicinity of Natchitoches Island is a puzzle.  We know that the Steadman 28 in the section immediately SE of Section 20 was a dry hole and XTO reported that the Haynesville was "faulted out" meaning it did not appear in their borehole.  I think this may be different than the typical fault situation your reference.  The displacement of a fault is called the throw.  That's how much displacement difference there is for a formation from one side of the fault to the other.  Yes, a fault can be drilled from either the south or the north now that cross unit laterals are approved.  However if the Haynesville is not present as I think "faulted out" may mean in this case, there would be no way to drill it.  It doesn't exist on that slope of the island. 

Permalink Reply by George Willey on August 2, 2023 at 9:50

I'm still confused as to why the landman from Azul stated that their records showed Section 17 faulted at both the Haynesville and Bossier levels.  The Faye Benning well was in Section 17 and was a descent producer based on the drilling and fracking processes they had in 2009.  If the section was faulted at the Bossier level, I would think that they would have been unable to drill a productive well in the section at that time.  

Permalink Reply by Skip Peel - Mineral Consultant on August 2, 2023 at 11:05

George, the map I use doesn't show a fault in Section 17 and the #2 well was a moderately good well for the location and the drilling and completion design in use at the time.  I'm not sure how Azul has come up with their assessment.