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Permalink Reply by JWC on February 13, 2009 at 1:47

I am certainly not a geologist but I have read that the Haynesville Shale may be within the Sabine Uplift which extends below San Augustine and Sabine Counties in Texas.

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Permalink Reply by Two Dogs, Pirate on February 12, 2009 at 14:47

Going by unknown well logs and just looking at the prefs, lets take a look at the Olympia Minerals well in Sabine Parish upper perfs 12150 lower perfs 13416 that would be 1266 ft of what they thought to be paydirt. The Murray well upper perfs 11920 lower 12845 thats 925 feet of paydirt or what they thought from their well logs to be paydirt.

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Permalink Reply by Les Bamburg on February 13, 2009 at 8:38

Two Dogs, those are the gross intervals but the net pay is a portion of that interval. That is the reason you see net pay for the Haynesville Shale is ~ 200 to 300 ft.

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Permalink Reply by Ginger Fife on February 18, 2009 at 17:52

If you get a dup reply, please disregrad. I had a glitch in my computer and was not quiet finished addressing a reply on this subject. So i will start again..sorry! Ok, i live in section 32, township 22 north. You mention the zero out line at the 19n/20n border. Where is that exactly? If is is true as to what you are saying about the northern area being opened up then that will be very exciting for my area here. I heard last year, that the shale is thicker in my area with a lot of pressure & that the mother load of gas was located between Oil City & Vivian & the surrounding areas. Now you know how folks will talk & i was a little skeptical cause no activity was going on around here. Then, i read your post & i must admit i am excited about this information. So there must have been some truth about the rumors. Do you think the gas companys are trying to save the best for last? I was also told they should have drilled north first, then worked down.

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Permalink Reply by Dion Warr, CPL on February 12, 2009 at 9:38

Group:

IF(!) this is true. If you asked Mac, he would probably also tell you that CHK is a strong buy up to a share price of $300.

For the sake of argument, let's assume that it is true. This could also mean that there will be a lot of cheap natural gas found in this formation for a long time into the future which will require constant relatively expensive drilling to maintain at an appreciable level. Expensive drilling operations plus cheap gas does not make the best economic bedfellows. It will certainly make the profit margin thinner as far being able to produce gas economically, which does not leave room for, say, high-four-figure or five-figure lease bonuses per acre, plus royalties.

Also, at this level of recoverable reserves (pondering, hopefully without going into the realm of hyperbole, I don't like dealing in hyperbole), should a real push be made at the federal level to create a sustainable level of energy independence through the use of natural gas and other sources as a matter of national security, depending upon the circumstances, there might be enough of a case to bring about goverment acquisition of a portion of these mineral assets from private citizens. Being that the state does not usually acquire according to fair market principles, that may not be good news. (Can anyone say, 'National Natural Gas Reserve'?)

In case you think that what I speak of is hyperbole, consider that the National Petroleum Reserve - Alaska holds approximately 16 Bbbl BOE (estimated). 1.5 quadrillion cubic feet = 250 Bbbl BOE (!!!)

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Permalink Reply by J R Kelly on February 13, 2009 at 11:53

There would be a revolution in this country if the government made such a move to nationalize private mineral estates. But, with the shape the government is in now, I would not put it past them.

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Permalink Reply by Dion Warr, CPL on February 12, 2009 at 18:49

JT:

I wouldn't claim to be an economist either. Just a landman. Not even a old landman, at that. I do get a little apprehensive when Mac speaks in that it's hard to tell whether he's pumping up natural gas, or pumping his stock. I certainly respect your opinion, and your analysis particular to reduced access to reserves in an restricted access environment (like a NNGR).

I wouldn't necessarily agree with exponential increases in use of natural gas for energy. Since 1950, over the long term, consumption of oil and natural gas in the US has proceeded more or less linearly over the long term, with a modest slope increase (taking into account a steeper runup pre-1973, followed by reductions in usage commensurate with domestic production capacity until about 1985). Since that time, consumption has increased anew in correlation with FERC deregulation and the rates of imported natural gas. As of the writing of the below attached Energy Information Association report (DOE), predictions were that such ng consumption would in fact continue to rise as predicted from the earlier data:

http://www.eia.doe.gov/emeu/aer/eh/frame.html

I would suppose one would hope for all of these claims to be true, but I cannot imagine that the rest of the world is not going to learn from our successes, and look for and exploit similar unconventional shale gas deposits. If this occurs, even if the US beings to export ng, who will they sell to, and in what quantities?

Did I fail to mention that such a claim, if proven, would ultimately exceed the balance of estimated domestic proven dry gas reserves by SIX TIMES?! (Most current is 2007 - 237.7 tcf)

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Permalink Reply by Bruce on February 12, 2009 at 10:37

J.T., I am an economist and I can assure you that you make many valuable points, good post.

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Permalink Reply by Sandstone on February 12, 2009 at 12:23

According to the news today, ethanol is having a real meltdown - plants closing, corn producers filing Chapter 11 etc. Apparently there was an article giving details in the NY Times.

This sounds like good news for gas except I found this in Forbes:

"Riisgard (the head of enzyme supplier Novozymes) said the E.U. cannot find the "political will" to pass a bill that would provide loan guarantees to ethanol produces and he is therefore lobbying decision makers in Washington to get them to sign off the help the industry requires.

Obama's stimulus package would reportedly include about $50.0 billion for energy programs, focused mainly on efficiency and renewable energy.

Riisgard said that besides financial aid, the ethanol industry needs the implementation of strict mandates to make sure companies meet the targets for expanded use of ethanol and other biofuels that Congress set in the energy law of 2007. The ethanol industry needs more ethanol in blended gasoline as gasoline consumption is on a freefall due to the downturn.

His lobbying seems to be paying off. New Mexico Democrat Sen. Jeff Bingaman said on Thursday the ethanol industry might need state aid as private investment dried up. Bingaman added that government regulations that limit ethanol content to 10.0% of most gasoline blends should be revisited."

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Permalink Reply by Les Bamburg on February 13, 2009 at 8:55

KB, corn ethanol is quickly falling out of political favor. Efforts to expand production will likely run into significant regulatory and environmental roadblocks. In California it is being viewed as being as bad as or worse than gasoline. On the other hand, cellulosic ethanol (switch grass, poplar trees, corn stover, etc) will be promoted by regulators as a key part of addressing climate change issues.

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Permalink Reply by Two Dogs, Pirate on February 12, 2009 at 14:25

Natural Gas is renewable energy.

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Permalink Reply by Sandstone on February 12, 2009 at 14:46

If the EU won't finance Mr. Riisgard's boondoggle, why is he asking Washington to send money and why is a Senator from New Mexico considering state aid for such a loser when his own state has natural gas?

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