Replies to This Discussion

Permalink Reply by jffree1 on August 7, 2009 at 3:16

Wilma, It is just MHO that if Devon is downplaying what they expect (haven't read that... anywhere) in their San Augustine well it is because they are actively leasing in the county. It is in their best interests to keep the talk down and expectations, also. Land/mineral owners just need to keep that in mind if approached to lease. O&G poor mouthing is intended to keep lease bonuses low.

If gas prices don't improve in the third qtr. they may not report anything except shutting the well in.

Permalink Reply by Wilma Watts on August 7, 2009 at 3:25

Good point. They really did not downplay the well, just said they were concerned about channelling in haynesville wells if they did an IP without or with little choke or restrictions. Which makes sense, although I am not an engineer. And they said the lower IP will mean more ultimate reserves - good for all involved. What type of bonuses and royalty are being offered if you know?

On a positive note they said none of their haynesville leasehold has been condemned by any acivity in the area - a lot had been 'derisked'. I assume that will be the case here also.

Permalink Reply by jffree1 on August 7, 2009 at 3:48

I do hope you are right (about de-risking). I read the report you are referencing. I think most of the operators have learned that these high pressure wells can be wrecked on open flow. Some are more conservative than others. Devon and Penn Virginia (Harrison Co.) are in that category.

If you approach Devon (DJ Energy) the best offer you can expect will be in the 500.00 to 1000.00/acre range. I'd not call them... I'd wait for them to come looking for me. Royalty offered is usually 1/5th (20%) but 1/4th (25%) is the target, espescially if they want an "All Depths" lease.

Permalink Reply by ALongview on August 7, 2009 at 4:03

jfree1, EOG said today in their conference call when pressed about their E Texas acreage and results that they felt that all of their acreage was good but wouldn't say more. They have good holdings in SA, NAC, and Sabine Counties so this is a good sign. Also, they again stated that all they would say about the Gammage well in Nacogdoches was that there was one. Second call in a row with the same answer. To your point about aquiring acreage during the "quiet" period, they have been leasing in NAC and SA during all of 2009. They were very upbeat about the Haynesville, as was XTO during their call as I think that many good results are moving South on the Texas side.

Permalink Reply by Wilma Watts on August 7, 2009 at 4:07

* They were very upbeat about the Haynesville, as was XTO during their call as I think that many good results are moving South on the Texas side. *

Glad to see the good news moving to the Texas side of the line. EnCana had a great haynesville presentation a month or so ago, it might still be on their website. And a real positive write up in the globe and mail (toronto).

Compared to the barnett bonuses a few years ago this acreage is absolutely dirt cheap. then again, nat gas prices are a third of what they were also.

Thanks to all for the infor.


************
dvn transrcipt:

Devon Energy Corporation Q2 2009 Earnings Call Transcript
http://www.bnet.com/2462-14034_23-328562.html

Thomas Gardner - Simmons & Company
I had a question regarding Devon's progress in derisking acreage in some of your key emerging plays, specifically in the Haynesville. I understand you have about 580,000 gross acres that may have changed, but have you ruled out any of this other than what you indicated in this morning's release as not being perspective or being perspective?

Dave Hager
No, we have not ruled out any of the acreage as not being perspective. We are methodically moving our way through the acreage position. At this point we drilled most of the wells in the Carthage area and we are very confident that we have derisked that area.

We are now moving to the south. We are currently drilling a well in the San Augustine county, the [Cardill] well. After that we will be drilling a well in Shelby county which is in between Carthage and San Augustine county. That will help to derisk an additional 47,000 acres. A great deal of the remaining acreage is actually minerals and held by production. So there's not as much of an urgency to derisk most of the other areas, outside of the acreage that I just mentioned.

:

Permalink Reply by Wilma Watts on August 7, 2009 at 4:16

Another well in the area that will 'de-risk' leasehold:

http://webapps.rrc.state.tx.us/DP/drillDownQueryAction.do?fromPubli...

Looks to be several miles to the east of the Kardell if my plat is correct, although I might be off a bit due to my lack of map platting skills.


Looks like Range Resources will operate:

http://webapps.rrc.state.tx.us/dpimages/img/600000-699999//PR000068...

Permalink Reply by jffree1 on August 7, 2009 at 5:10

Yes, that is the first deep well permitted in Sabine County (in recent memory). It is north of Milam and East of San Augustine and not real far from the Shelby County line.

Permalink Reply by Wilma Watts on August 8, 2009 at 2:46

Saw this on another discussion board, talks about Devon well. No claim to how accurate it is but it is interesting:
***************************************
I attended the Crimson (CXPO) shareholders meeting last Friday. I liked what they had to say. Allan Keel gave a presentation on their Haynesville shale play. Here are a few key take aways from the meeting:

•Current acreage position of 12,000 net acres in the northern part of San Augustine & Sabine County
•Seeking a partner to acquire ~50% of its current position in the play and form AMI to acquire additional leasehold inside the AMI
•Most of the area has been leased up but small infill acreage is available for lease
•Other E&Ps in the project area are Devon, Encana, Chesapeake, Southern, Cabot and St. Mary
•Prospective target formations include the Travis Peak, James Lime, Mid-Bossier, Haynesville Shale and Cotton Valley (Haynesville Lime)
•Main target formation are the Jame Lime and Haynesville shale
•Estimated EUR: Haynesville 6-8 bcf and James Lime 3-4 bcf
•Estimated IP rates: Haynesville 10-20 and James Lime 5-10 mmcfe/day
•Potential for 100 well locations
•Resource potential on 12,000 acres: 1 Tcf
•Other operators have reported positive well results and significantly de-risked Crimson's project
•Crimson/Devon plan to spud a vertical test well in the next month
•A 12 inch gas pipeline crosses leasehold with 50 mmcf/day of available capacity

Overall, very few outside investors attended the meeting. Imo, positive well results from a Crimson/Devon drilled well should get them some attention.

Permalink Reply by Les Bamburg on August 8, 2009 at 3:13

Wilma, just to clarify - operators do not initially flow horizontal wells on little or no choke. Information would indicate most range from 7/64" to 26/64". This is primarily a function of the rock characteristics and the level of pressure loss (drop) through the formation. An indication of this is the reported surface flowing pressure upstream of the choke.

You are correct that operators are learning the best approach to choke size during the well clean-up period that occurs in the first couple of weeks of flow.

Permalink Reply by DR on August 11, 2009 at 9:59

I guess they are going ahead to drill the lateral now.

http://webapps.rrc.state.tx.us/DP/drillDownQueryAction.do?fromPubli...

Filed to amend distances to lease and survey lines and unit size. Perforations outside of Tract 30 will not be closer to the Tract 30 boundary than 467'. 08/11/2009 01:24:06 PM FILER

Permalink Reply by DR on August 12, 2009 at 11:21

Haynesville Shale

At the end of June, we spudded our inaugural Haynesville Shale well, the Kardell #1 (50.0% WI), in San Augustine County, with Devon Energy as the operator. We are currently drilling at approximately 13,000 feet, toward a 13,500 total vertical depth, which we anticipate reaching late-August and plan to take cores and perform extensive formation evaluation in the pilot hole. The log analysis run while drilling through the James Lime formation at approximately 8,000 feet was very encouraging. Cores are planned to be taken from the Middle Bossier, James Lime and Haynesville Shale formations. Currently, we expect to drill the horizontal section, complete and test the Kardell #1 in late October / early November.

http://finance.yahoo.com/news/Crimson-Exploration-Announces-bw-2010...

Permalink Reply by Wilma Watts on August 12, 2009 at 11:50

What do you think of the rest of the filed SEC report or press release? The stock got hammered today, absolutely hammered.

Conference call on Monday might set a few folks at ease, or cause them to jump from high places, I expect.

I expect some 'color' on this well in the call, if so someone please post. I will try to listen but who knows what will be ongoing then.

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