Western Haynesville Play (Texas) - Robertson, Leon, and Freestone Counties

The following is a lightly edited cut-and-paste from another main page discussion.  I think this topic is interesting and deserves its own discussion thread.  I've assumed that the members posting in that discussion will not object to my moving their replies to this discussion as there was good detail concerning this emerging play.  I will remove any of those replies upon request.

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Western Haynesville Play (Texas) - Robertson, Leon, and Freestone Counties.  

Reply by Alan Herrington on December 3, 2022 at 18:36

Comstock also is busy extending the Haynesville play deeper into East Texas.  Actually, it should be considered Haynesville "equivalent", as the target formation appears to be Lower Bossier.

Based on a review of lease and assignment filings in the counties, it appears that Comstock has established a leasehold approaching 125,000 gross acres, located primarily in Robertson, Leon, and Freestone Counties.  

To date, Comstock has permitted six horizontal wells in Robertson County.  They have publicized their first well in the play, the Circle M Allocation 1H.  That well has produced 4.8 BCF of gas in its first 167 days of production and has not yet exhibited any significant monthly decline.  Comstock reported that they expected to bring their second well into production during November.  They are now in the process of drilling the remaining four wells in Robertson County, and just submitted a permit request for their first well in Leon County.  They have two rigs working.

In addition to Comstock, other companies appear to be pursuing Lower Bossier as well (but I'm not certain yet).  Thorp Petroleum has recorded lease memos covering more than 7,000 acres in Leon and Freestone Counties.  Vanna Production LLC (leasing entity associated with Vanna Oil and Gas) has recorded lease memos covering more than 12,000 acres, primarily in Leon with some in Freestone.

It will be interesting to see how this all plays out.  Here's an image showing the surveys in which acreage has been leased by the listed firms.  Note that the distance on the map from Oakwood down to Franklin is 53 miles.

 

Thanks for posting this, Alan.  Rock Man and I have followed this but haven't started any dedicated GHS sub groups because a)  It's outside of our traditional geographic foot print for HA/BO, and  b)  the Bald Prairie Field may not be directly related to the Haynesville/Bossier play in NW LA & E TX but certainly might be a depth equivalent which I will leave for Rock Man to weigh in on.  No doubt, there are some impressive early wells in that footprint.

 Rock Man on December 4, 2022 at 13:10

This Comstock play in Robertson and Leon County area is stratigraphically equivalent to Bossier / Haynesville section seen in NW La / NE Tx.

Same age rocks - just the other side of the basin (i.e., on the western side of the E Tx embayment)

 w.r. frank on December 5, 2022 at 14:07

What is vertical depth and what is the length of lateral perforations?

  Alan Herrington on December 5, 2022 at 14:27

The completion report for the Circle M Allocation 1H shows a TVD of 15,981 feet and a producing interval of 7,861 feet.

For the other five Robertson County wells and the one Leon County well, we only have the estimates provided in the W-1 permit submissions:

Cazey Black A:  16,000 TVD  8,365 PI

McCullough Ingram A:  16,500 TVD  10,000 PI

McCullough Ingram C:  16,300 TVD  8,315 PI

Campbell B:  16,000 TVD  13,280 PI

Campbell C:  16,000 TVD  13,000 PI

Dinkins:  18,000 TVD  10,023 PI

 Skip Peel - Mineral Consultant on December 5, 2022 at 14:32

 

Thanks, Alan.  Those TVDs seem exceptionally deep.  Are pressure readings available for these wells?

 

Rock Man on December 5, 2022 at 14:36

In excess of 0.85# per foot pressure gradient

Expensive wells

 

Skip Peel - Mineral Consultant on December 5, 2022 at 14:40

 

So, > 15,000 psi for a 18K TVD.  Expensive and dangerous.  The bottom hole temps must be crazy also.

Bottom of Form

 Alan Herrington on December 5, 2022 at 15:42

For the Circle M well:

Bottom Hole Temp:  320 degrees

Shut In Wellhead Pressure:  11,900 PSI and 100 degrees

Test Run Wellhead Pressure:  9,488 PSI and 213 degrees with 28 choke

 

 Skip Peel - Mineral Consultant on December 5, 2022 at 16:14

Thanks, Alan.  I would have suspected a temp closer to 400 at that depth.  Good pressures make good wells.

 Alan Herrington on December 7, 2022 at 9:49

So there's a new twist in the story of this new play...

I mentioned above that Vanna Production had recorded some leases in Leon County (60 to be exact).  Vanna immediately assigned those leases to Sabana Royalty Partners, which I thought seemed a little odd.  An internet search didn't turn up much about Sabana, but it did find the officers:  Dan and Farris Wilks.  These two brothers got into hydraulic fracturing when by starting the company Frac Tech back in 2002.  In 2011, they sold their 70% share for $3.5 billion, becoming billionaires in the process.

If they are indeed chasing Lower Bossier like Jerry Jones is, we now have three billionaires involved!

 Rock Man on December 7, 2022 at 10:03 

Interesting playing field for sure

 

Alan Herrington on December 20, 2022 at 18:41

Comstock filed a completion report today on their second Lower Bossier well in Robertson County, the Cazey Black A 1H.  Here are some stats:

TVD:  15,927 feet

Producing Interval:  7,912 feet

24-Hour Test Gas Volume:  42,215 MCF with choke at 30 (this production is about 15% higher than for their first well)

Shut In Pressure:  12,150 PSI

Test Run Pressure:  10,097 PSI

Shut In Temp:  100 degrees

Test Run Temp:  259 degrees

Bottom Hole Temp:  320 degrees

 

 Skip Peel - Mineral Consultant on December 20, 2022 at 18:48

Good well. Impressive.  Thanks, Alan.

 Alan Herrington on January 11, 2023 at 13:24

Cazey Black A production during its first 24 days:  711,908 MCF.  

29,663 MCF per day.

 Rock Man on January 11, 2023 at 13:30

Any way to find out if Comstock is hedging gas out here?

Big drop in gas prices since they started producing up here / big impact on economics

Side comment - I have seen D&C costs for horizontal drilling really take off over the past few months

Cost of diesel, steel, crews, etc.

Rig rates running over $35,000 per day

Good crews at a premium

For both drilling as well as frac jobs and other operations 

An example is D&C on 12,500' laterals (TVD 7500') in the Eagle Ford - over $12,5 Millon

These deeper and higher-pressure wells will have higher costs too - and with dropping gas prices, what is the bottom price threshold for drilling?

Just putting this out there / open for all comments as usual

Niel Loeb on January 23, 2023 at 9:30

Are these good numbers, i.e. is it producing a large amount?

 Rock Man on January 23, 2023 at 9:38

Great numbers in my opinion - especially when one considers the minimal apparent production decline.

Basically, no decline for first 6 months of production. 30 MMCF per day.

EUR's here may be larger than the HV in NE Tx / NW La.

Niel Loeb on January 23, 2023 at 16:28

Thanks

 Joshua S. Huckaby on January 23, 2023 at 15:11

Rumor mill that I’ve been hearing deep bossier is 6bcf per 1,000’ of lateral.  No matter I still believe both Comstock and Aethon are going way over their capex for these wells.

 

 Rock Man on January 23, 2023 at 15:44

As a geologist, I believe that this is Lower Bossier target around 16,500' TVD. Some others think Haynesville section. Really a moot point - deep, high pressure, dry gas with huge volumes post frac.

I am sure their D&C numbers have changed dramatically since they started drilling out here.

Wonder if they are hedging their gas??

 Alan Herrington on January 23, 2023 at 16:18

According to their Q3 2022 report, they have natural gas collar contracts in place for calendar year 2023:

Volume(MMBtu):  128,925,000

Average Price Per MMBtu:

   Ceiling  $9.85


   Floor  $2.98

 

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Thanks, Rock Man and Alan.  I knew they had to be high but $30M per each is tough to maintain at these gas prices.  Comstock is way under water on these wells.

Jerry Jones is clearly taking a longer-term view regarding gas prices.  Comstock has established a dominant position in the Western Haynesville and they essentially control the pipelines and treatment plants in the area via their recent deal with Quantum Capital.  

When gas prices rise (and at some point they will) Comstock is positioned to dominate the area.

Any feel for the breakeven price for these wells?

I track monthly revenue reported by Comstock to the Texas Comptroller's Department via their CONG reporting system.  The system reports show, for each well, monthly production, gross sales revenue, and marketing cost.  From that, I'm able to determine the Sales price per MCF and marketing cost (treatment and transmission) per MCF.

Comstock's first well, the Circle M Allocation 1H, has reported 655 days of production so far.  Total net revenue (after marketing costs and an estimated 20% cost-free royalty) is about $37.3 million.  The average sales price per MCF over that period was $4.03, but the early production was sold at much numbers ($5.00 to as much as $7.71).

So I modified the spreadsheet by plugging in $3.00 per MCF for every month and recalculating gross sales.  On that basis, the well would have produced about $25.3 million in net revenue after 655 days.

That might cover D & C for that well, but then there is land acquisition cost to cover, plus other items.  I have no idea what pay-back period Comstock is targeting, so hard to say what the break-even number is.

Thanks for the detail, Alan.  I never bet against Jerry.

No idea. And Comstock has been mum on this point.

Comstock is equally mum on other issues as to this play area - including EUR's and number of "proven" benches.

In my opinion. they are faced with a difficult situation in having an excellent gas play with probably multiple benches with a huge non HBP acreage inventory.

Where do you drill these high capital wells to "hold" the position? Do you target deepest benches to hold everything above those intervals? How do you look to extend undrilled acreage?

And all this in a low gas price environment.

I agree, Rock Man.  In a high price environment, Comstock might have a winner.  The question seems to be how much will it cost to wait out higher prices and when they come, will they be high enough.  Gas plays are facing a lot of head winds.

Comstock continues to expand its lease area!  In two assignment documents filed in Anderson County yesterday, Fieldview Resources assigned the leases they have written in Freestone and Anderson Counties to Comstock.  Here are the gross acreage totals:

Anderson:  4,371

Freestone:  8,624

Total:  12,995

Anderson County is immediately east of Freestone.

I've also been monitoring a large leasing project that has been going on in Cherokee County (immediately east of Anderson) for three years now, including lots of seismic work.  My estimate is about 55,000 acres.  I'm beginning to believe this could be Comstock as well.

I've also received reports of a large group of land men doing title research in Houston County (immediately south of Anderson) since early January.

Thanks, Allan.  Nice work.  Could some of that leasing activity be related to Aethon?  The other Western Haynesville player.

Could be, but Aethon has shown no signs of aggressively expanding its position.  They only have about 32,000 acres leased so far:

Robertson:  21,000

Leon:  5,000

Freestone:  6,000

Thanks.  I think Aethon is looking at a sale or an IPO to go public.  That may be why the company has not been more aggressive in the Western Haynesville.  The leasehold you describe appears to leave plenty of infill opportunities for Aethon or speculators.

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