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Permalink Reply by Skip Peel - Mineral Consultant on May 21, 2022 at 10:59

Ray, hard to predict.  Indigo, before its focus was solely Haynesville Shale, drilled some very good horizontal CV wells in a limited area.  Investment capital is looking for Haynesville/Bossier reserves, so that is the priority for most operators.  As long as SWN has proven HA/BO locations, that should remain their priority.  Long term, the demand for and price of natural gas will likely induce some CV infill drilling in specific areas.  Several HA operators have field orders for CV or LCV horizontals.  Those field orders are good indefinitely and well permits to drill could come at any time for those approved well slots.  The Haynesville Shale play has a long way to go.  Many don't realize that at the pace of development over the first fourteen years, there is likely another twenty years of drilling proven reserves before the play production volume goes into decline.

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Permalink Reply by ray schmidt on May 22, 2022 at 2:40

Thanks Skip your input is always much appreciated! As good and consistent as those two wells have been over the last four years I was hopeful they would see that and include the cotton valley in the development plan. I guess I’ll have to be patient and see how it all plays out!

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Permalink Reply by Skip Peel - Mineral Consultant on May 22, 2022 at 2:56

You're welcome, Ray.  Your question got me to thinking about how long it has been since Indigo drilled a horizontal CV well.  A little digging reveals that before Indigo sold their deep rights (Haynesville and Bossier) to SWN, they sold their CV/LCV rights to DIVERSIFIED PRODUCTION LLC.  So SWN will not be drilling any CV wells.  Since Diversified took over the Indigo CV wells in early 2020, the company has not drilled, indeed has not even permitted a new well.  The company has never filed an application for alternate wells with the state.  Considering the current price of natural gas, that's kinda strange.  It may be that Diversified lacks the financial and/or technical expertise to drill horizontal wells.  Maybe they are simply operating the old Indigo wells while trying to find a buyer with a desire to develop.

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Permalink Reply by ray schmidt on May 22, 2022 at 5:34

My mineral interests are in 13N 15W sec 28 & 29. The 2 cotton valley wells I was referring to were spud in sec 20 and are now operated by Diversified but the other vertical cotton valley wells in sections 28 & 29 are still being payed out by SWN!

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Permalink Reply by Skip Peel - Mineral Consultant on May 22, 2022 at 6:54

Interesting.  Regardless of the fact that SWN is paying the royalty, Section 29 is operated by Diversified for CV according to the state.  Now SWN is the operator of the CV in 28 and importantly in 33 also.  So long lateral CV wells are a possibility there.  The fact that SWN chose to remain the operator of those select sections may be beneficial to you in the long run.

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Permalink Reply by ray schmidt on May 22, 2022 at 7:22

Thanks for your input!!

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Permalink Reply by Skip Peel - Mineral Consultant on May 22, 2022 at 7:45

You're welcome, ray.  I'm disappointed that there have not been many horizontal CV wells drilled since Indigo switched priorities to the Haynesville.  Aethon has drilled a few and may drill more in the future.

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