re: Tuscaloosa Marine Shale

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Tiger - I hear what you're saying, but on the flip side, Oil is much higher today than in 2008 ($102 for WTI today; $37-ish at the end of 2008). In regards to companies facing much more stringent borrowing costs now, the deal with the Chinese at least suggests that conventional borrowing was by-passed - at least in this instance. I'd like to know if the Chinese sought out Devon or vice-versa... They use the terms "deal" and "arrangement". Is this (Foreign money) a sign of things to come?

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The foreign majors and nationals have been investing with independents for a few years now. These unconventional plays demand huge amounts of capital. Only major oil companies and the national oil companies have the available capital in hand to develop all of these plays. Total, Petrochina, Statoil, BHP Billiton, BG Group, Reliance Insudstries (Indian), and many others have invested large sums of capital in the Haynesville, Barnett, Eagleford, and Marcellus. They get non operated cash flow and most importantly knowledge and the ability to chase out shale in the future around the globe. Devon had advertised they were doing a JV for months now, and the only thing making it different is that this JV covers 5 plays instead of just a specific one. I'd say this tends to put a higher risk profile on Devon's activities in that maybe not all 5 of these plays will be commercial successes. Oil prices are indeed good, but at $102 dollars right now the oil company in the Tuscaloosa play will net only $65-$70 per barrel after severance, royalty, and transportation so that is what economics are going to need to overcome. The 12.5% oil severance in LA is a big deterrent to activity at times. I realize it might not seem like it to people in this area who haven't seen activity in decades, but this play has very real risks which have justified the bonus payments remaining where they are. If anything bonuses are on the high side for such an unproven play.

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TigerDog83

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I'm not sure where you are getting your information, but there are currently two wells producing in the TMS that I know of. One of which is doing ~1,000 bpd and the other is doing ~280 bpd. The latter is only 5 stages, hence the low bpd.

Very nice Google Map of TMS and Austin Chalk wells. Do your homework regarding status of respective wells. I cannot attest to the source.

PS: The Indigo 16 was reported as Plugged & Abandoned yesterday, but it's reported that Antinum will scoot over 40 feet and drill it again.

We have had several offers on our acreage in Amite County, going back to 2005. Our first offer in 2005 was for $50 and acre, which we declined. We were contacted again in 2011 with a 3 yr $200 / 2 yr $250 ext & 20% royalty. They bumped it up to $225 and then we started negotiating. We found another leasing agent that was willing to beat that offer, so we are now getting ready to sign a 4 yr $300 an acre with a 1 yr ext at $500 with 22.5% royalty. This company is heavily invested in Eagle Ford and is now in the process of getting involved in the Tuscaloosa Marine Shale.
If the play starts heating up by summer this year, these bonus prices may skyrocket, but it's a gamble to wait it out. Since we got a nice bump in royalties, we are going to take this latest offer.

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My guess is the TMS should be at that level in the Tangy/Feliciana/Avoyelles/Point Coupee area sometime this year.

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No chance in hell. TMS so far seems marginal. And since the idiocy of the Haynesville I haven't seen another shale get close to those prices.

Does anyone know what the splits are supposed to look like for TMS? Is it supposed to oily or gassy? Wet or dry? NGLs? What kind of stuff is expected to be down there?

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I assume the crude is receiving LLS pricing? Also, what does the midstream/liquids processing infrastructure looks like currently? NGLs being knocked out and processed or is the wet gas just being sold w/ a btu factor uplift?

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FWIW I now know what this means [after reading another report from you-know-who] (although I don't know the answer, but I'd expect there's little to no infrast there currently?).

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Does anyone know what the splits are supposed to look like for TMS? Is it supposed to oily or gassy? Wet or dry? NGLs? What kind of stuff is expected to be down there?


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I assume the crude is receiving LLS pricing? Also, what does the midstream/liquids processing infrastructure looks like currently? NGLs being knocked out and processed or is the wet gas just being sold w/ a btu factor uplift?
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The TMS is oily. Processing and fractionation infrastructure is likely somewhat limited on a local basis, but it wouldn't take much pipe to get it to facilities...at least that would be my guess. Until then, the gas would be sold on a btu upgrade, but it wouldn't be a great hinderance if oil is the big draw. The crude would almost certainly receive some sort of LLS upgrade, but the LLS differential is only around $10.15 right now and you'll have to take transportation costs out of that, so you might get $5 extra if it's good quality crude.

Also, the Eagle Ford may end up being the target formation and not the Austin Chalk or the TMS.

LOL. It's called a brain fart. Ever have one????

I have been hearing that the oil companies are encouraged with results so far.

EXTREMELY ENCOURAGED

Encana encouraged by Tuscaloosa Marine shale tests
Reuters – Tue, Jan 10, 2012

NEW YORK (Reuters) - Encana has seen positive signs from recent well tests in the undeveloped Tuscaloosa Marine shale in Louisiana, as the Canadian energy company develops more liquids-rich plays in North America, a senior executive said on Tuesday.
The company has completed two wells in the area and recently moved a third rig there, Encana Senior Vice President Eric Marsh told a BMO Capital Markets conference in New York.
"We have completed a couple of wells and we are encouraged by the results," Marsh said, declining to give specifics about production.
Encana, which operates about 270,000 acres in Tuscaloosa, expects its overall gas liquids output to reach 80,000 barrels per day by 2015, as it shifts its emphasis away from natural gas development due to low prices.
Details on Tuscaloosa and other liquids rich plays, which include the Duvernay in Alberta and Collingwood in Michigan, will likely be divulged in spring or summer, Marsh said.

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Tuscaloosa Marine Shale



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any one heard of anyone looking in this area or if the play is expected to reach this far south and west?


This is in the ballpark... WWL News Report

Also: Click on Map to enlarge

I think at this stage of the TMS, it would be advisable to take everything with a grain of salt...

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I work for Encana and hope TMS really takes off. I have land in far west Washington Parish and I'd personally open the gates for the rig to move onto the property.