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Started By
Message
re: Haynesville Shale
Posted on 6/6/08 at 1:17 pm to LSU0358
Posted on 6/6/08 at 1:17 pm to LSU0358
quote:
Didn't mean to be to sarcastic. But what the Times never seems to mention is that to develop one 640 acre section you are looking at ~64 million dollars up front. This is assuming $6,000 / acre (I know a lot of people signed for less than this...but leasing the mineral rights is small change in comparison to money needed to drill the wells)for leasing mineral rights, then 6 million dollars per a well with 10 wells per a section. This does not account for building the necessary pipelines, roads, etc...
From where I sit in the finance industry, I would say that in general, O & G, in the midst of this credit crunch, is the one area that is still very well capitalized - and with money still pouring in. On the private equity side, money is REALLY amassing in the energy space. So it won't surprise me if the money quickly finds a way to deploy itself. If that means taking some of these smaller companies private in order to get it done, then that's what they'll do I suppose. In any event, my main point is that I don't see capital constraints being much of an issue if they really believe the product is down there.
0
Posted on 6/6/08 at 1:19 pm to GeneralLee
quote:
honeyhole
I like it!
Posted on 6/6/08 at 1:20 pm to DrWAVeSport
Before getting back to my REAL job...One of the largest land owners in Bossier parish, just signed lease for $10,000 per acre. Mucho acres! (For A Fact!) Don't yet know the skinny on royalty, but knowing this deal maker...he wasn't schmucked.
Just some more FYI.
Just some more FYI.
Posted on 6/6/08 at 1:28 pm to DrWAVeSport
Was that acreage in southern or middle or northern Bossier Parish?
Posted on 6/6/08 at 1:32 pm to GeneralLee
Landowner in Bossier parish has property all over the parish, mostly around the Central section/Red River side on up to Benton.
Posted on 6/6/08 at 1:43 pm to DrWAVeSport
What about property in Blanchard? Does that look like it's in the area where gas is being found?
Thanks.
Thanks.
Posted on 6/6/08 at 2:10 pm to moparsid
Haven't read through the whole thread, but any news about possible findings in Jackson Parish?
Posted on 6/6/08 at 2:30 pm to givemeabeer
quote:
FYI, two wells going in half a mile from my property two miles south of Shreveport, Caddo.
And you haven't leased? You better lease before they send you an AFE. If not, you are going to get runover. You won't make a penny until the wells in your section pay out on a UNIT basis, which might be a decade from now. Regarding the point about what you call "schmucking" by the oil and gas companies; it is their job to pay as little as possible for leases. That is the nature of capitalism. Buy low and sell high. If you don't like that then I suggest you try the weather in Moscow as I hear it is lovely this time of year. These people should be grateful to the oil and gas companies for offering Northwest Louisiana residents the chance of a lifetime instead of complaining about how much money they left on the table. Royalties are where the real money lies anyways.
Posted on 6/6/08 at 2:46 pm to TigerDog83
quote:
You better lease before they send you an AFE. If not, you are going to get runover. You won't make a penny until the wells in your section pay out on a UNIT basis, which might be a decade from now.
Can I request English on this one please?
Posted on 6/6/08 at 2:56 pm to TigerDog83
quote:
And you haven't leased? You better lease before they send you an AFE. If not, you are going to get runover. You won't make a penny until the wells in your section pay out on a UNIT basis, which might be a decade from now. Regarding the point about what you call "schmucking" by the oil and gas companies; it is their job to pay as little as possible for leases. That is the nature of capitalism. Buy low and sell high. If you don't like that then I suggest you try the weather in Moscow as I hear it is lovely this time of year. These people should be grateful to the oil and gas companies for offering Northwest Louisiana residents the chance of a lifetime instead of complaining about how much money they left on the table. Royalties are where the real money lies anyways.
FYI...Belong to a larger group of landowners...and FYI... deal is on the table...FYI...no landmen involved...
Lighten up alittle...The cat is out of the bag...and now mineral owners will get a a more equitable deal...The game is played both ways, for all of us who live in the good 'ol USA.
Thank you for your concern though, Seems you are just as concerned for me not getting "run over" by the O&Gs as I have been opining about others.
Seems we all don't want to get the short end of the stick.
Will let you know "the rest of the story" when things get to cooking big.
Remember, the price for Crude and NG are BIGGER driving forces in these plays than just about anything else.
DrWAVeSport
P.S. Read an article from NARO-Texas Convention (The Woodlands, TX) "Where Does The Money Go?" by John R. Hays, Jr., per who gets the lion's share of royalties. With the reductions at the wellhead that pile up, better go for the highest Bonuses up front!
Posted on 6/6/08 at 3:01 pm to Tiger JJ
Wells are drilled on Units (640 acres will probably be the standard for the Haynesville as the Cotton Valley is already drilled on 640 acre units). Each new well is then an "alternate unit well". Inside these units the mineral owners will be approached for leases, and if certain people refuse to lease they run the risk of being "force pooled" by these big companies. It has happened many times in the Barnett and some of these hotter plays elsewhere. The company doing the drilling will be able to begin drilling a well in a unit once they have over 50% of the unit leased. If certain people are holding out and are unleased when the drilling begins in that unit they will recieve an "AFE", or Authorization for Expenditure". When this arrives, the party will have a short time period to pay their share of the well costs or they will be penalized and will receive nothing until the well costs have been recouped by the drilling company. Many people think they will simply wait this out and start getting a check when the first well pays out, but that will not happen because the drilling company will begin drilling a new well prior to the first well paying out. This will continue, and the drilling company will continue to drill wells, as some of these plays may take years to fully drill and recoup their initial investments. These units will payout on a unit basis, so until the entire unit reaches payout the holdouts probably will not receive any payments. A lot of local attorneys aren't knowledgeable about this, and people are getting bad advice to hold out. Holding out is only possible if you have a large enough acreage block that you form the majority of a unit. Chief, Devon, and others were notorious for doing this in the Barnett shale.
Posted on 6/6/08 at 3:11 pm to TigerDog83
Interesting map today on page 13 of Chesapeake's 2008 Shareholder Report, for those interested....
Posted on 6/6/08 at 3:16 pm to TigerDog83
Are you saying that local O&G attorneys are not knowledgeable about O&G contracts and some of the most simple stuff "AFEs." Come on now....I think thou protests too much....Statutory force pooling are scary words for most...
I never saw an individual landowner issued and AFE for what we are talking about. And if these plays are worth the contract papers they are written on...everybody needs to take a deep breath and relax alittle.
Everything will be OK! Promise!
I never saw an individual landowner issued and AFE for what we are talking about. And if these plays are worth the contract papers they are written on...everybody needs to take a deep breath and relax alittle.
Everything will be OK! Promise!
Posted on 6/6/08 at 3:22 pm to DrWAVeSport
I'm saying that some people are being told to holdout thinking that each well will payout on an individual basis. That is not necessarily correct. And in doing business here for a long time, I can assure you there are very few local attorneys that are qualified to handle mineral aspects, especially when most are so busy right now.
This post was edited on 6/6/08 at 3:23 pm
Posted on 6/6/08 at 4:32 pm to GeneralLee
quote:
Interesting map today on page 13 of Chesapeake's 2008 Shareholder Report, for those interested....
Funny Map!!!! Around here, supposedly (per some "In The Know" O&G reps/landmen) the Haynesville Shale area is shrinking as we breathe! How awesome...That to the SHAREHOLDERS, BANKERS, ISTITUTIONAL INVESTORS, ETC...the Haynesville Shale map has quadrupled in size!
Oh...By the way CNBC just this second put a "buy" out for Monday a.m. for Chesapeake and PetroHawk...how funny! More $$$$$ for their pocket.
OK...Back the truck up a minute...On the one hand, some are blogging...Take what you can get NOW...because things just aren't as rosy as you the mineral owner may be thinking. AND...then on the 180% opposite hand...TODAY....Read the Stockholder presentation by Chesapeake..."Still Leasing...just having to pay more than in the past." No kidding Sherlock!
That map of Chesapeake needs to be enlarged and posted on every street corner in Caddo and Bossier! Then the mineral owners can ask...Ok...which Haynesville Shale map am I in? The one that has grown in leaps and bounds at your Stockholder meeting...or the one that some (speculators with lease in hand) keep telling us...sorry your property just isn't in the most recent seismic info we have right now...No really...that map is teeny, tiny?" And..."Please sign here...." That's some funny stuff out there.
There is a major fiduciary responsibility that Companies are required to uphold when speaking to their investors and holders of their debt. And, for my money, let's play on Chesapeake's side...HEAVEN IS SITTING IN THE HAYNESVILLE SHALE!
Good Job Chesapeake...You just confirmed the potential for us all!
Posted on 6/6/08 at 4:51 pm to DrWAVeSport
Well, if you look at the link below you can get a much better idea about where the bulk of the activity is going on. There is a program at the bottom with ArcGIS maps of Louisiana. You can click on the oil/gas wells layer and zoom in and then they will show up on the map. However, these are past wells not future ones so the heavily drilled areas should expand. LINK
Posted on 6/6/08 at 10:18 pm to TigerDog83
TigerDog, any word on when CHK is planning on doing some hiring?
Posted on 6/7/08 at 8:14 am to TigerFanatic1
once you get the lease check, what can you expect to pay in total taxes, state and federal?
Posted on 6/7/08 at 9:09 am to olddog573
an arm and a leg.... Well it depends on what tax bracket the lease check puts you in. Just be glad you can keep close to half of it now, because with Obama the government will be taking 80%+ of it in the years to come probably.
Posted on 6/7/08 at 9:16 am to GeneralLee
quote:
Good Job Chesapeake...You just confirmed the potential for us all!
The CHK map is very general, and a lot of that was fudged to include pre-existing leasehold. That is something all the companies are doing to pump their stockholders. The Petrohawk map is a better map to use. You can find it posted fromtheir RBC conference presentation (I posted a link to it a couple of pages back in this thread). When they spoke to us last week on the phone they told us directly that their "zero out" point to the North is Township 19/20 North. They are using the J-W #1 Rumbaugh well west of Benton as the zero line. Anything further North is no good. Samson drilled a dry hole in Township 21N 12W last year. The Forcap 22#1 was plugged because it had ZERO gas shows and ZERO shale. There is no way anybody can argue that. To the south, it just gets to deep to be any good. To the west into Texas it really is undefined, but that doesn't matter because East Texas is already so heavily leased. You can't just say you are in the shale because some generic map includes your area. If you haven't been contacted yet, odds are you are not in a prospective area. I laugh when I hear these people who have land way up North or way down to the South who think they are in the shale and are holding out for offers. People are leasing in these places, but it's not going to be for big money because it's not going to be for the Haynesville shale.
This post was edited on 6/7/08 at 9:30 am
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