Friday, January 28, 2011

Is a Smackover Rush Coming???

Wouldn't it be nice if there were a "liquids rich" play below the Haynesville Shale?  The Smackover formation, which underlies the Haynesville in northern Louisiana and southern Arkansas, has been known of for a long time but drilling it was not considered economical.  But technology has advanced over the past decade and some are thinking the Smackover might be the next big oil play.  An analyst with Jefferies & Co. is now predicting as much.

That would be pretty sweet.  The Haynesville has largely been shunned in investor circles for its dry gas.  It's not that I need the attention, but another round of leasing sure would be fun.  Since the Smackover lies below the Haynesville and most leases have a vertical Pugh clause that only doesn't allow a lessee to drill below their established production, new leases would be in order for most landowners.  Can't you see it?  We can right the  wrongs of the past or get another bite of the golden apple.

A couple of weeks ago, I  noticed a Smackover completion in Webster Parish, (serial #241685).  But it might be best to sit and wait to see how things go before rushing out to buy that brand new Cadillac.  Everyone is looking for the next oil/liquids play and investment analysts love to be the first ones to make a call.  Unfortunately, they are not always right.  Let's hope this guy is...

1 comment:

robert said...

Hope you're right. This time we have more control.