re: Tuscaloosa Marine Shale

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Light Sweet Crude!! Good stuff!!! I am confident, they will work the kinks out. It's there & they want it. It's just going to take time before they can turn the corner.

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Devon's first TMS horizontal (Beech Grove) has posted production of 3,632 Bbls oil in just over two months time. Granted this well was rumored to have mechanical issues, but that isn't close to being economic. Encana seems to have fared better with their first attempt.

You should contact an O&G attorney give him the facts and let him investigate. The facts may not be as you see them. If indeed there has been a trespass you will be owed $$$ for your damages.

If you actually have a case it will settle with the negotiation of a lease - if the well is productive. And beware of the landman - lots of idiots out there claiming to be landmen.

Interesting article in today's Morning Advocate.

A lot of people think every well in the Tuscaloosa should produce 1,000 barrels a day, but it takes time for drilling companies to figure out the best approach, Barrell said.

Barrell, the author of a blog on the Tuscaloosa Trend, said people forget or don’t realize that the early results varied from wells drilled in the Eagle Ford Shale in Texas.

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It's not so much that they have to figure out the best approach. What they're doing is trying to identify the sweet spot - if there is one. Currently, they haven't and the results have been poor.

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Still very early in the exploration phase, but nearly 800 bopd on Weyerhaeuser 73 is a good start for Encana.

800bopd is not a good ip when you take well costs, leasing costs and the likely decline curve into account.

Things will change when they turn these pads into advanced resource play hubs. 16 lateral wells drilled from one pad.
LINK

The actually drilling of each well will still cost the same, so it still has to prove to be individually profitable. I believe Encana has planned to drill four from each of the two Anderson pads should these first two prove to be profitable.

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I think when you can count the number of wells on one hand, that's a very encouraging sign. Sort of like finding a small nugget of gold... do you stop there?

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These wells are expensive and will require a lot of oil to be produced to reach payout. Without knowing exact costs from operators you're looking at potentially 140,000 barrels or more to reach payout, and that's assuming oil prices don't fall a bit. We're going to have to see some big numbers posted for production on some of these wells to see if they can become profitable.

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I'm just going by what Encana is saying. Do you think Ecana knows want they are talking about????
They presented that Resource Play Hub yesterday during their presentation, which probably an attempt to gather investors. That, I would assume is part of their plan to help keep the ball rolling with additional revenue. They claim this method will cut cost.
Also,you previously mentioned lease cost. Well, out of all of the shale plays, TMS offers the lowest cost in leasing, so that cost is a drop in the bucket for drilling companies.

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Multi well pads can cut some cost, but it won't materially change the economics of the play if the zone won't produce enough oil. These pads have been used in other commercial plays including the Haynesville, Barnett, Fayetteville, and Marcellus, so it's not as if you've discovered something new that will make the TMS work. These have already been used in the gas shales but low gas prices have made even these development wells uneconomic for now. TMS wells will cost a lot of money to drill and then another large sum of money to complete with large multi-stage frac jobs. Lease cost might be lower in the TMS play than elsewhere, but it still is a cost that has to be accounted for just like the cost to operate producing wells. Take $10 million and divide by the expected net oil price ($60-$80 depending on what royalties, transportation costs, etc. you assume) and you will see what kinds of oil volume payout will require.