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Permalink Reply by North LA on February 12, 2009 at 15:54

kickbacks

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Permalink Reply by Les Bamburg on February 13, 2009 at 8:29

This Platt’s news item contained a significant error in the reporting. McClendon actually was referring to the Marcellus Shale when making the statement about the field containing 1.5 quadrillion cubic feet (1500 Tcf) of recoverable gas which would make it the largest in the world. McClendon did state the Haynesville Shale contains 500 Tcf (potentially 700 Tcf) of recoverable gas which is twice the level originally estimated by Chesapeake. A link to the news item is shown below:

http://www.platts.com/Natural%20Gas/News/6142828.xml

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Permalink Reply by Carter on February 13, 2009 at 12:04

Thanks for the clarification, Les.

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Permalink Reply by Dion Warr, CPL on February 13, 2009 at 12:35

Les B:

Seemingly most every news item relating these remarks on the internet (including Platts) is attributing this 1.5 Qcf to the "ultimate size" of the Haynesville. Were you present at the conference or know someone who was?

If your remarks are correct, this same misquote is being cut and pasted around the blogosphere!

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Permalink Reply by Les Bamburg on February 13, 2009 at 12:52

Dion, I watched a webcast of McClendon's presentation so have it straight from the horse's mouth. Unfortunately the other news agencies have just picked up the Platts news story so it originates from a single source. I have seen this before with Platts (and other) news sources where they botch the story.

By the way, I am amazed enough at Chesapeake's doubling (or tripling) of the Haynesville Shale's recoverable gas. I look forward to McClendon's explanation for the dramatic increase.

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Permalink Reply by Dion Warr, CPL on February 13, 2009 at 13:23

Les B:

So am I. I am wondering if this is an extrapolation of the latest round of IP announcements (seem to be improved approx. 20 -30%) as well as other results as to viable production outside of the original area delineation, at the same relative well spacing. If one "expands" uniformly according to those criteria, one can reasonably get to 350 - 400 tcf.

Over 30 years on 100% drillout, this would correspond to a 30 Bcfd peak (est'd.) at 180 - 185 rigs, on which one would outpace domestic conventional declines AND net imports, should same still be profitable to current exporters, thru 2030, from the info already out there. That would be HS, by itself. I can't imagine that CHK and others would want to keep that pace.

So, what do you think we are looking at? 50 yr. program? 60 yr. program?

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Permalink Reply by Les Bamburg on February 13, 2009 at 17:52

Dion, I think that is exactly what Chesapeake and others are looking at for the Haynesville and Marcellus Shale plays (and maybe others also). Rather than developing the play as quickly as possible to a very high peak rate, the operators will develop at a pace to match natural gas demand and filling in behind the decline in conventional production. This is similar to the philosophy behind development of Qatar's North Field. The field contains 1000 Tcf of recoverable gas but will have a peak production rate of ~ 12-15 Bcfd.

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Permalink Reply by Sandstone on February 14, 2009 at 4:21

Yes, this is the area that had an explosion in a water well and Cabot Oil was providing water to some landowners. A review of o/g regulations was to take place this spring.

http://www.pressconnects.com/article/99999999/NEWS01/80507030&t...

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Permalink Reply by Les Bamburg on February 14, 2009 at 8:51

KB, there are several challenges regarding the Marcellus Shale development. The terrain is very hilly so shooting seismic and building well pads is difficult. The play covers a very large area and the formation parameters vary significantly so there may be good and bad parts. There is no existing production infrastucture and limited well service resources. And not least a NIMBY attitude is prevalent in the region.

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Permalink Reply by Dion Warr, CPL on February 14, 2009 at 12:35

KB:

The Marcellus has drilling and development issues which involve broad environmental consequences. The shale interval is known to contain higher concentrations of uranium and other heavy metals; I would suppose even with good containment, operators still may have issues with above-average levels of NORM and its disposal. The terrain is hilly, water must be managed properly to prevent contamination and erosion in and around well pads and pits. Water availability in many areas also poses problems.

Whoops... got caught not reading to thru to the next page again. Where I duplicated Les' post... what he said. -- DLW

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Permalink Reply by J R Kelly on February 13, 2009 at 11:47

Poor Aubrey, he will say anything to get attention and hopefully a stock price bounce. It is hard to listen to someone who held stock at $60.00, then HAD to let it go on margin calls at $16.00! He prays to the EXXON and BP Gods everynight to spare him additional pain!

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Permalink Reply by Checkmateking on February 14, 2009 at 4:26

I was shocked when he got killed on margin calls, I bet he felt like the Duke and Duke boys off of Trading places, LOL. He was drinking too much of his own kool-aid.

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