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Permalink Reply by Skip Peel - Mineral Consultant on September 22, 2009 at 12:11

A review of Chesapeake leases recorded in Caddo Parish over the last 90 days and by Twin Cities over the last 50 days reveals no leases in or north of the 19N townships and only a small number in the 18N townships. The leases covering tracts in 18N were recorded in July with one exception. Section 4 0f 18N - 14W continues to show leasing activity by both companies. This section is immediately west of the point where Hwy. 1 and Hwy. 71 split in north Shreveport just to the north of North Highlands and about 5 miles due east of Blanchard. Of note, both companies are recording numerous leases for residential lots within the city limits of Shreveport. Subdivisions from the far west to the far east south of I-20 are included. Quite a few of the leases are in the neighborhoods represented by the Shreve Centre Coalition.

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Permalink Reply by Catfish on September 22, 2009 at 12:30

Skip any chance of you checking on bossier? I'm actualy looking for some news.

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Permalink Reply by Skip Peel - Mineral Consultant on September 22, 2009 at 12:53

Yep. After dinner. LOL! In the meantime, I'd like to solicit some speculation as to the means by which leases will be held where production does not presently exist. That is if anyone thinks that companies will wish to hold onto their HS rights in the northern townships until nat gas prices increase and/or better completion designs improve production. BTW, Catfish, reviewing leases takes some time. It doesn't happen in 15 or 30 minutes.

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Permalink Reply by Skip Peel - Mineral Consultant on September 22, 2009 at 13:43

Chesapeake/Twin Cities have recorded a handful of leases in 18N -13 & 12W in the last 50 days. Small residential lots, fractions of an acre. There is no recent leasing activity in S15 - 18N -12W where the CHK Conger well is drilling. The bulk of leasing activity in Bossier Parish is in the 17N township and south.

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Permalink Reply by Les Bamburg on September 22, 2009 at 15:48

Skip, I think some will hold either thru the drill bit or farm-out to others to drill. This may depend on how contiguous their acreage position is.

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Permalink Reply by Skip Peel - Mineral Consultant on September 22, 2009 at 15:54

Good point, Les.

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Permalink Reply by Catfish on September 22, 2009 at 14:31

Thanks Skip you always give your best. Do you have an opinnon on where north of i20 is headed?

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Permalink Reply by Skip Peel - Mineral Consultant on September 22, 2009 at 14:48

In areas where companies assembled sizable lease blocks at considerable expense and prospects exist for future commercial production from the HS, or other formations, at higher nat gas prices, I suspect that lessors will be offered extensions. If not enough lessors are willing to do so in areas where no vertical Pugh clauses exist, a company may drill a less expensive vertical well to a shallower formation in order to HBP. As an example in the Longwood Field, Cotton Valley verticals could be drilled on surface locations appropriate for future HA horizontal wells. The operator would case the well so as to facilitate reentry at a future date for a horizontal completion. In north Caddo, there are numerous shallow formations which are productive to some extent. Wherever HBP by a shallower and less expensive well is possible, it is an option. Also an operator may wait to the last possible moment, drill a well, declare it Code 33 (Shut in - Productive - Future Utility) and make shut in payments for the period allowed for in the lease. If nat gas prices do not improve considerably in 2010, companies desiring to hold leases will do so by whatever means at their disposal.

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Permalink Reply by Catfish on September 22, 2009 at 14:46

Any predictions on the chk well? Mine is 7 to 8 mmcd (I hope)

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Permalink Reply by gassius clay on September 23, 2009 at 4:16

Some people i know in 20N 12W signed leases in 06 thru 08(before the rush) for pennies on the dollar compared to today prices. Their 3 year leases will expire soon. I was wondering if yall think the gas companies will extend these leases since they got them for next to nothing and would they drill shallow wells to hbp this far north before the extensions expire?

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Permalink Reply by Catfish on September 23, 2009 at 4:29

Depends on alot of factors, I would think being cheap they may extend them. If the rumors of what diamond have logged in and around the belevue field are true,could be a plus for that area.

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Permalink Reply by Skip Peel - Mineral Consultant on September 23, 2009 at 4:36

gassius. There is no development activity in 20N - 12 & 11W. So it's a difficult call. You have to go to 20N - 10W to find any HA activity and that is by Diamond Oil. They have permitted several HA wells but have no completions. If lessees can, they may wait to see completion results from these well before making their decisions. Please keep in mind that it is quite likely that the leases you mention were taken for the development of formations other than the HS. With nat gas prices so low, it is difficult to make a profit drilling conventional formations. If companies do not believe there is HS potential in 20N -12W, they may just allow those leases to lapse.

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