Haynesville Shale

[latech80]

A good attorney friend told me that last Thursday the Claiborne Parish Clerk of Court office had more people (mostly landmen) than he had ever seen. It was so crowded he couldn't work and had to leave.

I can also tell you there are a lot more cars parked around the Homer square even when civil and criminal courts are not in session. I know some of the leasing is Haynesville Shale related, but more of it is Gray Sand related. The Gray Sand can be as prolific as the Haynesville Shale, yet it doesn't get the press.

But there's always Cotton Valley, Smackover, Rodessa etc exploration going on in Claiborne, Webster, Lincoln & Bienville which is my part of the world.

Tenacious Dog,

I assume this "gray sand" you speak of is part of the Haynesville Sand formation? If not, then dd you know the geographic dimensions of this "gray sand"? The Haynesville Sand formation doesn't get near the press coverage of its more popular counterpart, but all the industry insiders I know of who are familiar with Claiborne Parish say it has the potential to be as productive as the Haynesville Shale. Speaking of Cotton Valley, Smackover, Rodessa, and Haynesville Sand, do these "formations," if I may use that word, overlap?

If this message sounds disjointed, I apologize. I'm just trying to cover all my bases.

[tenacious_dog]

The Gray Sand is a formation below the Cotton Valley and tends to be pretty tight. A geologist would have to tell you if it is part of any formation family. Three or four years ago Anadarko drilled a series of wells in Jackson Parish targeting the Gray Sand. I followed it pretty closely. Several wells came in making 10+ mscfd, some over 15. Alot were 5+. Anadarko sold the field about a year ago to, I think, EXCO for something like $100 mil. The Gray Sand is a big part of the Terryville Field in western Lincoln Parish. It's been found in Claiborne and Webster.

Any of the geologist can jump in here. There are a variety of productive formations at various depths all over north Louisiana. Most are natural gas, some are oil. If memory serves, we used to go through the Haynesville Shale on the way to the Smackover. The Smackover wells were in northern Webster & Claiborne and all over southern Arkansas. The Cotton Valley runs like 9200 to maybe 10,500 depending on where you're drilling. It's shallower near the Ark/LA state line and trends deeper as you go south. Cotton Valley accounts for most of the wells drilled in north LA. The Rhodessa, Hosston, Nacatoch and lots of others run from just a few hundred feet to as deep as you want to go. But at this point, comparatively little drilling has been done below 12,000 and next to none below 15,000.

[latech80]

The Gray Sand is a formation below the Cotton Valley and tends to be pretty tight. A geologist would have to tell you if it is part of any formation family. Three or four years ago Anadarko drilled a series of wells in Jackson Parish targeting the Gray Sand. I followed it pretty closely. Several wells came in making 10+ mscfd, some over 15. Alot were 5+. Anadarko sold the field about a year ago to, I think, EXCO for something like $100 mil. The Gray Sand is a big part of the Terryville Field in western Lincoln Parish. It's been found in Claiborne and Webster.

Any of the geologist can jump in here. There are a variety of productive formations at various depths all over north Louisiana. Most are natural gas, some are oil. If memory serves, we used to go through the Haynesville Shale on the way to the Smackover. The Smackover wells were in northern Webster & Claiborne and all over southern Arkansas. The Cotton Valley runs like 9200 to maybe 10,500 depending on where you're drilling. It's shallower near the Ark/LA state line and trends deeper as you go south. Cotton Valley accounts for most of the wells drilled in north LA. The Rhodessa, Hosston, Nacatoch and lots of others run from just a few hundred feet to as deep as you want to go. But at this point, comparatively little drilling has been done below 12,000 and next to none below 15,000.

Tenacious Dog,

Thanks for the expansive explanation. My family's farm/homestead is just outside Junction City, in Claiborne Parish, and I've heard that there are 4 active NG wells in this area, but according to the Department of Natural Resources website, there have been no applications filed for any activity in the area. My industry sources tell me that the this area is covered in oil and natural gas, and the trend is moving northward and further east, but right now, that is just "pie in the sky," as the old folks say.

[tenacious_dog]

Some hopeful news for you. A pretty nice well was completed early this year between Homer & Junction City, closer to JC. A second well will be drilled before the year is out. If it hits too, there could be some new interest in your part of the world. Good luck!

[SkeeterDawg]

Is there any activity going on at all in the Vernon field? I have an interest in some property about 10 miles south of there, we leased it to Anadarko, but have heard nothing else.

[tenacious_dog]

Is there any activity going on at all in the Vernon field? I have an interest in some property about 10 miles south of there, we leased it to Anadarko, but have heard nothing else.

Tenacious Dog,

Thanks for the expansive explanation. My family's farm/homestead is just outside Junction City, in Claiborne Parish, and I've heard that there are 4 active NG wells in this area, but according to the Department of Natural Resources website, there have been no applications filed for any activity in the area. My industry sources tell me that the this area is covered in oil and natural gas, and the trend is moving northward and further east, but right now, that is just "pie in the sky," as the old folks say.

Here's a real handy website from the LA DNR. Go down to the Pre-Run Reports and open the Shreveport Scout Details.

http://sonris-www.dnr.state.la.us/sonlite.htm

Exploring the various areas of the website will teach you alot about what's going on and what's happened in the past.

[TECH88]

There's a new Shale map from the DNR:

http://www.gohaynesvilleshale.com/

[latech80]

This morning, I had an interesting conversation with a fellow CPA from Shreveport about the frenzied activity surrounding the Haynesville Shale activity. He told me his business has certainly picked up, and during the course of the conversation, he made several comments that I wish to share with others.

First, he said that they don't know the true geographical dimensions of this formation and that makes perfect sense. An earlier blogger made reference to the fact that one of the premier exploration companies was looking for experienced land attorneys in the Monroe area. Again, to my simple mind, why would you be recruiting talent from the Monroe area if you were not anticipating activity in environs outside the identified HS area.

Second, he said that the word on the street is that there is oil beneath the gas, and that jibes with what I have heard is an industry mantra: That is, where there is gas, there is oil and vice versa. Whether this is an old wives' tale or not, I have no way of knowing, but this gentleman believes that activity is going to pick outside of the identified HS area, and offer hope to people who have been traditionally on the sidelines watching the unfolding drama, both near and far.

BTW, for you CPAs who are looking for reasonably-priced CPE from a reputable source, go to www.taxspeaker.com. The owner is Bob Jennings, who gives a 1040 seminar in Shreveport every year, and his materails on Compilation and Reviews are second to none. He has also released a course dealing with Oil and Natural Gas Taxation for any of you who are interested. Also, sign up for his newsletter. He offers very up-to-date information.

[DONW]

The arkansas Game and Fish Commission just leased 4000 acres north of Morrilton to Chesapeake for 28.3 million and 20% royalties. That comes out to $7075 per acre.

[FriscoDog]

As a reporter noted in the Ft. Worth Star Telegram - the interesting thing about the Haynesville shale is that in Ft. Worth, the Barnette Shale prices took 10 yrs to get where they are today for leases. In Haynesville, they took 10 weeks.

[BulldawgBB]

Money money money money...money! I have family involved in this project. It is interesting to see how much money is being paid out. I did receive a lease offer here in Ruston not long ago. I too wish that I owned about 1,000 acres that was given to me by some rich uncle or other family memeber...the rich only get richer...

[latech80]

In the July 29th edition of the New York Times (www.nytimes.com), they have an article entitled "Gas Rush Is On, and Louisianians Cash In." In the second paragraph, they say the formation extends up into Arkansas. Further down, they make the verbatim comment, "Nobody knows for certain how big an area the Haynesville Shale covers - no government entity has mapped it."

Any thoughts? BTW, where is Morrilton in Arkansas?

[Tech77]

In the July 29th edition of the New York Times (www.nytimes.com), they have an article entitled "Gas Rush Is On, and Louisianians Cash In." In the second paragraph, they say the formation extends up into Arkansas. Further down, they make the verbatim comment, "Nobody knows for certain how big an area the Haynesville Shale covers - no government entity has mapped it."

Any thoughts? BTW, where is Morrilton in Arkansas?

20 minutes or so northwest of Conway off I-40.

[latech80]

In today's edition (08/01/08) edition of the LA Times (www.latimes.com), there is an article on the Haynesville Shale by a reporter who has been reviewing the blogging activity on www.tigerdroppings.com (okay, okay, I plead guilty as charged!).

Honestly, I don't like the characterization of the denizens featured ("Jed Clampetts") which seems to perpetuate some very unflattering images of our people, but the reporter make a number of assertions that are interesting, and one of them you continue to see in any major newspaper; mainly, that the Haynesville Shale covers the Ark-La-Tex. Personally, I believe what is happening here is that a number of geologic formations are being lumped together under the rubric of "Haynesville Shale."

This article comes on the heels of the articles in the Shreveport Times about the number of drilling permits (and the hectic activity it is creaing for state workers), and the article dealing with revisions of estimates on what is available in the contiguous 48 states.

What has occurred to me is that there is a considerable time lag between the application/issuance of drilling permits, and the actual leasing and testing of potential territory. Perhaps I didn't express it appropriately, but it causes me to believe is that with all the petroleum landmen moving north and east, they must believe the oil an gas is not confined merely to the five parishes originally designated as the "Haynesville Shale."

Hopefully, my poor attempt at speculaiton on this subject will spur some commentary from those more knowledgeable on the subject.

[marketdawg]

"Honestly, I don't like the characterization of the denizens featured ("Jed Clampetts") which seems to perpetuate some very unflattering images of our people,"

Really! The last guy my dad just dealt with (my pops is a petrohawk guy) just got a LOAD for his stuff. My dad asked him, "What'cha gonna do now that you are a millionairre?" Mydad said that the guy answered (God's honest) "I'm first thing gonna go get me the biggest ridin' lawn mower they make." The stories go ON AND ON. I've enjoyed them immensely for some time now. They are referred to by the oil/gas guys as "Shaleionarres". Don't get me wrong-my dad and I enjoy good country people, I'm a quasi-redneck without means, and I love the fact that they are making money now but I'd say the LA Times reporter, by the stories I've heard (which are absolutely beautiful and priceless) can keep on talking. They just don't understand the true beauty of Southern Culture. BTW: The Clampetts were hillbillies, same as the Dukes of Hazzard. Not Rednecks. Completely different types of people (and dentistry).