Replies to This Discussion

Permalink Reply by Jack Blair on October 10, 2009 at 3:06

Thanks Jay......I appreciated your two cents!

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Permalink Reply by Jack Blair on October 10, 2009 at 9:11

Thanks Henry.........I will talk with the rest of the family.

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Permalink Reply by Greedy Landowner on October 10, 2009 at 10:10

I agree that 2K is ridiculous. 11-15 has been drilled quite a few times and for some reason many of the results have been less than stellar. This is a relevant factor in your situation. Looking at it from the operators perspective, once I have all of my wells drilled that I have to drill in order to hold my acerage by production, would I put my next well in Elm Grove or in 11-15? Logic would say Elm Grove because you get like triple the gas for drilling the same well. If this becomes reality it might be years before 11-15 starts getting multiple wells per section. You then have to reconcile that with your current financial situation, your future plans, your heirs and what (if anything) you want to leave them. It is very complicated but remember once you have signed that is it, the deal is done and you and your heirs are bound by that agreement literally forever.

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Permalink Reply by Henry on October 11, 2009 at 3:32

Greedy Landowner,
Comstock had some very good wells in the Logansport field that were reported on this site last week. I agree that CHK's wells in Logansport Field have been less than stellar. But, is this because the wells are choked back? Maybe someone else can weigh in here....

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Permalink Reply by Spring Branch,mineral owner on October 11, 2009 at 8:19

Yes, Comstock has some decent wells N/W and S/E of 11/15 and some that aren't so good. CHK's wells in 11/15 are mostly "awaiting pipeline", but those that have had IP's announced are in the 3 million to 7 million cu ft/day range.............much worse than the rest of the play. In spite of this, CHK seems to be going full speed ahead to put a Haynesville in every section of 11/15. I have tried to float the idea that maybe CHK is completing in the Bossier rather than the Haynesville and that would account for the lower IP's, but CHK's determination to keep drilling up the sections. I still say there is a reason that they are trying to drill up the 11/15 Township in spite of the rather weak well results. I just can't figure out what the reason is (unless it's the Bossier) especially when there are plenty of other undrilled sections in other areas where they could be using the rigs to produce much better well results.

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Permalink Reply by sesport on October 11, 2009 at 8:43

Spring - Just my Everyday Joe stab at it here (as to the reason) ... isn't leased acreage considered something that can be sold in the future to raise capital? Don't quarterly reports proudly promote how much leased acreage a company has to entice investors? Just my guess.

:0)

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Permalink Reply by Spring Branch,mineral owner on October 11, 2009 at 13:27

sesport, if that were the case, they'd be drilling and leasing in T 18 around the Blanchard
(Longwood Field) area, and they seem to have pretty much cooled on that area!

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Permalink Reply by sesport on October 11, 2009 at 14:03

Spring - Like I said, just a guess. Looking at Skip's most recent Snapshot, the numbers seem to favor T11 as opposed to T18. But, I'll defer to those more experienced & expert. :0)

http://www.gohaynesvilleshale.com/forum/topics/snapshot-of-the-play...

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Permalink Reply by NA on October 12, 2009 at 17:00

Broker: Porter & Associates
Client: SGS, Classic Hydrocarbons, some other gimp company
History: SGS and other gimp company assigns leases to classic. Leases are 5 year terms some are 3 year with 2 year option, others have 3 year term with pughs.
Classic drills James lime wells early in the terms. Crap wells so they sell out to chk. Being still primary term on some leases and options on others they drill priority sections first and extend what they can and drill it last. Btw chk assigned out the CV and shallow rights to Indigo. Many of chk's HA wells are choked back in this area.

So why are they drilling this area? Because of cheap leases, vertical pugh clauses, and undrilled property whose primary term was coming up.

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Permalink Reply by Steven Danis on October 11, 2009 at 4:14

I would like to ask anyone who would care to respond what are the current range of bonuses and royalty percentages are to be found in the various portions of the Haynesville Shale. Purely by googling up a topic about shale gas I found this site this morning. I own property in New York State, in a section which is possibly a portion of the Marcellus Fairway. As I'm sure many must be aware, the Marcellus is now a major likely unconventional gas deposit as is the Haynesville. The question has come up many times on some discussion boards I participate in about what the landowners in the Haynesville or Barnett are getting. In the Marcellus some recent landowner group agreements have seen local record high prices of about 5500 to 5750 per acre with 20% royalties for a 5 year lease. And it was not at all in the distant past that bonuses of 25 to 50 dollars and a state minimum royalty of 12.5% were the norm. Pennsylvania and New York's Marcellus region are different from Louisiana and Texas' Haynesville, but I think all landowner share the same common goals of property protection along with a decent share of the resource.

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Permalink Reply by insomniacnla on October 11, 2009 at 9:44

Steven,
My opinion is only that of a landowner but there is no "one answer fits all" for the bonus amounts in the Haynesville Shale. The offers for the bonus vary widely from each company and seem to take many things into consideration: Such as location in the Play, pipeline location, drill site availability and cost, amount of land currently under lease within the section and the expiration dates of those existing leases, amount of land the landowner has available to lease, water availability within the section, existing wells in the section, the production figures for the wells nearest to property, the royalty amount the landowner wants, current market conditions and on and on and on.

The royalty amount might be easier though as I don't think that too many landowners will accept less 20%, or even 25% in some areas.

I still think that education is the key and that the best thing the unleased landowner can learn all they can.

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Permalink Reply by Steven Danis on October 11, 2009 at 13:38

insomniacla, thank you for your reply. From doing a bit of research I see that even in the Haynesville it was not all that long ago that bonuses were skimpy, at best, also. That level of 5500 to 5750, with some talk of a few areas seeing a bit higher right now, is certainly not the standard in the Marcellus. I know of a family that has a farm in central New York where the company that leased from them in 2006 would like to renew for another 5 year term for the same 50 dollars per acre bonus as the first time around. Perhaps the biggest difference all along between the Texas/Louisiana region and the Appalachian natural gas fields was in the level of royalties. Around here the state minimum 12.5% was also the maximum for a very long time. It's only recently with the markedly better deals negotiated by landowner groups that we are seeing 20% royalties, with some indication of going a little beyond that in future negotiated deals in some choice locations. Fortunately fewer and fewer people in this part of the country are falling for a rotten deal the second time around. Many of us have gone to the school of hard knocks and taken an advanced degree from the experience. I certainly wish every landowner well in trying to bring bonuses up again. Hopefully natural gas prices have seen their floors for a while. And what is being paid in one region, no matter how distant, certainly has an effect on the whole country. We either rise or fall together.

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