Replies to This Discussion

Permalink Reply by Les Bamburg on January 17, 2009 at 18:26

Lerret, I generally disregard anything written by Arthur Berman. He has shown to have a complete lack of understanding of the US shale gas plays and fails to adequately research available information before writing about the topic.

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Permalink Reply by Lerret on January 18, 2009 at 8:26

Who besides the very people who have promoted and profited from shale gas so far have publically stated any research? Fact is my old cronies in OKC and Ft. Smith have been saying for 3 years that the shale plays are a house of cards. The old timers refuse to play this game. Even a Devon VP who gives shale speeches for the company on their Barnett play admitted privately that they had a much better profit margin on their W. Kansas properties. But investors want the "next big thing" not the tried and true.
A few good wells pay for the rest. I am saying this as someone who uses classical production decline analysis myself, and I don't agree with the volumetric methods that are akin to mining. I for the life of me cannot see how these wells that purportedly will make 2 BCF of gas will ever make ½ that on average. I am going in with optimistic projections and declines but time and again I see wells that simply auger into the ozone expotentially. They never make that "turn" necessary to call the decline "hyperbolic". Many of those are shut in and await future wells.
And even industry admits that if drilling stops tomorrow, production will be more than halved within 12 months. As for any given 1 well, if you don't make your investment back within 8 - 10 months, you will be lucky to get it back at all. Rather than lacking the "understanding" of Shale plays, perhaps a lot of folks on the sidelines understand it all too well. Some of us old heads remember the "Austin Chalk"...too well.
Having said that, the Haynesville is the most promising of the shale plays to come along. The Woodford, Marcellus and a lot of others are marginal at anything but high gas pricing. The Caney and Floyd are flops. The Fayetteville needs more over-pressure and again what I see is that a high percentage of the best wells are actually producing from stringers of sand, not "shale" per se.
Looming over the horizon is the simple fact that what is happening to all the water? The State of Arkansas is about to get a belly full of improperly disposed frac and well fluids. The days of dumping so-called "fresh" water on the surface is rapidly diminishing. There is way too much disposal fluids, way too much water consumed in fraccing, and way too much expense disposing of same.

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Permalink Reply by Robert G. Oliver on February 25, 2009 at 16:24

I must agree with you. I have looked at over three hundred shale wells and have found very few that meet the mimum requirements of a commerical gas well. Most shale wells will barely pay out the drilling cost much less the high priced lease cost. Funding the WOC account will be impossible. Leaving the State to come in and plug the well and the state will then come to the land owner and any other person that got money from the well to fund the plugging.

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Permalink Reply by Bobi Carr ("parker") on February 25, 2009 at 16:31

Mr. Oliver,

I would like to know what planet the shale wells are that you have looked at.

Petrohawk stated TODAY that they are making money on HS wells EVEN AT $4.00 PRICES.

SCARE TACTICS DON'T WORK ON GHS.

But it is always FUNNY to read what you write, so continue to entertain us. I can only assume that is your purpose since you are definitely not posting facts.

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Permalink Reply by Les Bamburg on February 25, 2009 at 17:14

Parker, I must have been asleep. I didn't know today was April 1st!!!

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Permalink Reply by Bobi Carr ("parker") on February 25, 2009 at 17:40

Les,

Read some of Mr. Oliver's other posts. It appears to ALWAYS be April 1st.

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Permalink Reply by BirdDawg, plain ole' idiot on February 25, 2009 at 17:31

Mr. Oliver,
After you have looked at the 300 shale wells, maybe now you oughta study some Haynesville shale wells. And you and Lerret need to study them long enough to see how much gas they will make. And please don't say you already know that, because nobody knows yet.

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Permalink Reply by Robert G. Oliver on February 25, 2009 at 18:01

I agree that I have not looked at any wells in this area and I will most likly get a request to evaluate one or more in the near term. I hope every one gets a good well on their place but don't spend the money to soon because most likely the water will soon follow.

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Permalink Reply by Bobi Carr ("parker") on February 25, 2009 at 18:05

Mr. Oliver,

With all of your years of experience, since the water will come why not drill for it first and then use it to frac the well?

Voila, no more frac water concerns.

No need to thank me. You can even take credit for this "invention".

IT SORT OF FITS WITH THOSE INVENTIONS OF INFORMATION THAT YOU HAVE COME UP WITH.

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Permalink Reply by BirdDawg, plain ole' idiot on February 25, 2009 at 18:14

Mr. Oliver,
Please forgive me, and I do respect your experience in the business. But am I misunderstanding something, or did you just explain to all of us more ignorant people on this site how very few shale wells will ever pay for thereselves, and then you say you have never looked at a Haynesville Shale well? Please forgive me again, but why on Gods green earth would anyone want you to ealuate a Haynesville Shale well?
They seem to have done fine without you up to now.
And we (or me) appreciate any and all info, but I really appreciate info on the Haynesville Shale.

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Permalink Reply by Robert G. Oliver on February 25, 2009 at 18:30

I do work for banks and the money people that loan money to companies on their assets. I hope your wells keep producing real strong.

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Permalink Reply by BirdDawg, plain ole' idiot on February 25, 2009 at 18:37

Robert,
So do I.

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