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I talked with a Chesapeake engineer last week. He said that they'll pick up drilling when nat. gas goes to $5-$6. The Barnett Shale (where I work) is mostly drilled, and will not boom again. New rigs will head to Haynesville and Marcellus (Appalachian Mtns). Energy usage is still expected to go up 20-30% over the next couple of decades, and they're not completely stopping drilling like they did in the 80s, hopefully they have learned from the past.
Please don't highjack this thread.
Before anything can happen in the eastern environs of this play, I suspect there will have to be some kind of infrastructure established in the form of pipelines, etc. Given the current economic malaise and the depressed price of natural gas, how long are we looking at in terms of a revival of activity? I believe it may be 2012 or later before we see any heightened activity.
According to the latest coming out of Calgary, Encana says early drilling results indicate it is sitting on a potentially massive natural gas resource in the southern United States - one that's stacked on top of the Haynesville Shale. They say it believes the so-called mid-Bossier shale could rival the size of the Haynesville reserve. The mid-Bossier is 150 meters above the HS.
Any thoughts?
WooHoo!?Originally Posted by latech80
I think the pipelines and other necessary facilities are already in place. They're more worried about drilling before the leases expire in places like caddo, bossier, red river, etc.
Whoops !!
Could another little setback re development of the Haynesville Shale be on the way ??
"Studies commissioned by the coalition said that proposed changes in regulations, including the fracking exemption, could force the closure of more than half of oil wells and one-third of gas wells."
http://finance.yahoo.com/news/Colo-N...n&asset=&ccode=
Well, that certainly would increase the price of O & G. The sparta is at a depth of about 800ft in north la, I seriously doubt frac-ing at depths of greater than 10,000ft would have any affect on our drinking water unless there was a major malfunction in setting the casing.
It would be a shame if they did it, but it won't really change things. All states have casing cement regulations & I guess the Bureau of Land Management does too on federal lands. First off, you have to set casing and cement to surface once you drill past the water sands. And it needs to be a good cement job because if you drill into pressure, the only way your blowout preventers will work is if they're sitting on casing that is well cemented in place. From there you will run at least one if not two or more additional strings of casing to get to the bottom of the well. Another part of the deal is running what's called a bond log to make sure the deep casing is seated properly and tight against the formation prior to fracing. Any operator would want this because frac jobs are massively expensive and you want it going where its supposed to go.
From there, I would think it would take something thermo nuclear to fracture a mile or 2 of rock to get what's down below to the water sands up above. So far, the only folks who've done that are the federal government and they haven't done it in a long time.
Most folks don't know nearly how much is involved with drilling and producing oil & gas, especially on these high volume wells. They'd sleep a lot better, and look for other causes of their water problems (if they truly exist), if they knew more about the processes.
No way half the oil wells or a third of the gas wells they're talking about would get closed. I'd bet on either NONE or PRACTICALLY NONE.
Bump. Whats the latest on the future price of NG? Will it ever hit $7-$9 again?
Nymex spot market currently $4.11
December 2009 contracts @ $6.14, up .50 today
$7.00 in futures might be just a couple weeks away. $7.00 on the spot market, who knows. I'm thinking October...maybe sooner, but not much later.
On a separate note, speculators are making a come back on oil trading. Won't be nearly as bad as last year, but its going up.
One decent thing I hear out of the administration is the concept of investors needing to have "skin" in the game. If they apply that to commodity trading like they're advocating for derivatives and other instruments, could be a good thing for controlling the broad swings we're seeing due to speculators working on margins.
This might interest some of you that have property east of the "known" Haynesville Shale area NWLA:
http://www.rigzone.com/news/article.asp?a_id=77543
Tenacious Dog,
I believe what is being espoused in this article challenges the conventional wisdom of a lot of the "pundits" who said the "core" is all that there is. I heard from several sources that this formation could extend all the way to the Mississippi River, but I'm told that is an extreme heresy among the "people in the know."
What do you make of this?
When a landman calls you up and wants to negotiate "an oil, gas, and mineral lease," do you negotiate the components separately, or as a unified deal?
Nymex Dec is down close to 5.30 as of yesterday's close. From reading the EIA website, they dont see a recovery in Nat gas this year. They said next year should be the year with about the same demand (assuming a modest recovery in industrial use), but with cut backs in production (more flexible due to new techniques). I dont see any major production additions until demand goes up. As of now, supply is well over demand and that is why the nat gas contract has gone down, down, down this year.
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