Thursday, June 30, 2011

New York Looking at Rescinding Fracturing Ban

Across the Hudson from New Jersey (see below), New York Gov. Andrew Cuomo is looking at removing the statewide ban on hydraulic fracturing in his state (except in the watersheds for drinking water for New York City and Syracuse).  This would be a reversal for a state that was quick to pass a moratorium on the use of fracturing with little evidence.

While removing the ban is only speculation at this point - maybe a leak to take the public's temperature - the timing is very interesting. Cuomo is fresh off a surprising victory in passing a same sex marriage act through a mostly Republican legislature. Might this be payback?  More likely, the timing has more to do with the expected release Friday of the state Department of Environmental Conservation's environmental impact study on fracturing.

Is this an indication that the study has no major revelations? If nothing else, at least it sounds like Gov. Cuomo doesn't get his news about natural gas from the New York Times.

[Oh, and in case you are interested, here is the third in the Times series slamming natural gas: S.E.C. Shift Leads to Worries of Overestimation of Reserves.]

N.J. Legislature Passes Hydraulic Fracturing Ban

The New Jersey state legislature passed a bill to ban hydraulic fracturing in the state.  The only thing standing in the way of it becoming law is Gov. Chris Christie's signature.  It will be interesting to see what he does since fraacking has become as much of a political issue as an environmental one.  Given all the people whispering in his ear about running for president, any decision he makes will have to balance larger political ambitions with local issues.  I know what I would do, but nobody asked me.

New Jersey, while known more as a place to store hydrocarbons than actually produce them, may have some shale exposure in the northwest corner of the state but probably not enough to make this action anything more than a symbolic gesture.  But it gives the anti-fracking folks the opportunity to chalk up a win in their column.

EIA: Storage +78 Bcf to 2.432 Tcf

The weekly EIA working gas in storage report showed a 78 Bcf net injection, bringing the total gas in storage to 2.432 Tcf.  The weekly injection was 24% higher than last year (+63 Bcf) and 1% higher than the five year average (77 Bcf).  The current storage level is 9.1% lower than last year (2.675 Tcf) and 2.5% lower than the five year average (2.495 Tcf).


Temperatures last week averaged 73.7 degrees, 1.7 degrees warmer than normal.

Tuesday, June 28, 2011

In Case You Didn't Get Enough...

The New York Times followed Sunday's scathing assessment of shale gas with another article Monday that cites internal emails from some EIA staff members critical of shale gas.  The article casts doubts upon the reliability of EIA's numbers given its connections with the natural gas industry to supply data (although I'm not sure how the EIA would get it on its own without the cooperation of industry).

I've spent the past couple of days thinking about the big Sunday article. I've read numerous reactions, both pro and con, and tried to consider it in the big picture from both sides.  I think it is a mistake to dismiss the NYT or media in general for a perceived liberal bias.  But I don't think it is a stretch to say that this article is an entirely one-sided case of sloppy journalism.

The Times has earned its position at pinnacle of print journalism for decades of excellence in reporting.  The Times is "tenured" but not beyond having its motives or actions questioned.  I feel that the reporter never really challenged the assumptions of the parties that provided the leaked documents (and the talking points) and didn't do a lot of independent research.  It is alarming to read reactions from companies that were never contacted for an interview for the story.

What is particularly bothersome is the use of innuendo and "masked facts" to make vague accusations.  If the Times has the dirt on a particular company, they need to come out with it.  Instead they are sullying the entire industry as "pump and dump" boiler room hacks.  There is also the perception from the article that security fraud is being committed and that the SEC is laying down on the job.  I think the worst thing they have uncovered is a bit of greater-fool theory in action.  But if you extinguish the greater-fool, you might as well shut down the stock market.

New Texas Permits

06/21/11 - 06/28/11:

  • Verhalen "B" #7H, GMX Resources; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: POE, A , A-19
  • D'Asto #4H, NFR Energy; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: EARLE, D, A-235
  • Timmins B #2H, GMX Resources; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: THORP, J, A-701

New Texas Completions

6/21/11 - 6/27/11:
  • Walker SU F #1H, Exco Operating: 20.898 MMcf/day IP, 14/64" choke, 8,190 psi; Perfs: 14,737-19,295, length: 4,558 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: WALKER, J, A-57
  • David Dunham #2, Classic Operating: .706 MMcf/day IP, open choke, 3,015 psi; Perfs: 10,628-10,647, length: 19 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: HALEY, CQ, A-274
  • Bath Unit #2, Valence Operating: .835 MMcf/day IP, 48/64" choke, 440 psi; Perfs: 10,710-12,141, length: 1,431 ft.; Carthage Field (Haynesville Shale), Rusk Co., Survey: GREEN, AS, A-350

New Texas Completions

6/21/11 - 6/27/11:
  • Walker SU F #1H, Exco Operating: 20.898 MMcf/day IP, 14/64" choke, 8,190 psi; Perfs: 14,737-19,295, length: 4,558 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: WALKER, J, A-57
  • David Dunham #2, Classic Operating: .706 MMcf/day IP, open choke, 3,015 psi; Perfs: 10,628-10,647, length: 19 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: HALEY, CQ, A-274
  • Bath Unit #2, Valence Operating: .835 MMcf/day IP, 48/64" choke, 440 psi; Perfs: 10,710-12,141, length: 1,431 ft.; Carthage Field (Haynesville Shale), Sabine Co., Survey: GREEN, AS, A-350

Smackover in Morehouse Parish

Thanks to the commenter who noted the newly approved permit for oil production from the Crossett 31 #1 (serial #243422; Sec. 31, Township 22, Range 5) in the Smackover formation in Morehouse Parish.  Here are two links to documents filed: Link 1; Link 2.  The well is targeting a depth of 8,350 feet.

Sunday, June 26, 2011

Front Page News! Shale Gas Not Profitable [at $4/MMBtu]

[No joke.]

This morning I was greeted by an above-the-fold front page New York Times headline, "Insiders Sound an Alarm Amid a Natural Gas Rush."  Screaming baby in my arms and no coffee in my tummy.  Awesome way to start my Sunday.

The article is another version of Arthur Berman skepticism but on a much larger stage and with the investigative intrigue of leaked internal documents and emails from various redacted sources.  Being the Times, many of the documents are online and are worth reviewing.  It's a pretty frightening article with phrases tossed around like "bubble," "Ponzi scheme," "Enron" and questioning "whether companies are intentionally, and even illegally, overstating the productivity of their wells."

Friday, June 24, 2011

Haynesville Shale Rig Count: -4 to 123

The weekly Haynesville Shale rig count lost four this week, bringing the number of rigs working the Haynesville Shale down to 123.




As the Haynesville rig count continues its gradual slide, it is interesting to see where the rigs are now drilling the shale (below), or more precisely where they are not drilling (i.e. Harrison, Panola and Rusk counties, TX) (map link).

U.S. Rig Count: +22 to 1,882

The weekly Baker Hughes rig count showed a 22 rig increase, bringing the national rig count to 1,882.  Oil rigs increased by 19 to 1,003, gas rigs increased by three to 873 and miscellaneous rigs were unchanged at six.  The number of oil rigs is at by far the highest level since 1987 (the beginning point of the data BHI provides).  By type, horizontal rigs were up 20 to 1,081, vertical rigs were up seven to 565 and directional rigs were down five to 236.

In the Haynesville Shale region, inclusive of other formations, the count was down four to 145.  North Louisiana (97)  and east Texas (48) were both down two.  This is the lowest level since early October 2009.

Thursday, June 23, 2011

New Louisiana Completions

  • Hutchinson 10-15-12 H #1-ALT, QEP Resouces: 10.893 MMcf/day IP on 18/64 in. choke at 6,675 psi; Perfs: 11,510-16,000, length: 4,490 ft.; Elm Grove Field, Caddo Parish, S10/T15/R12; res. A, serial #241992
  • Holmes 19 HZ #1, Comstock Oil & Gas: 7.274 MMcf/day IP on 14/64 in. choke at 7,132 psi; Perfs: 11,867-16,234, length: 4,367 ft.; Belle Bower Field, DeSoto Parish, S18/T13/R16; res. A, serial #241214
  • Peoples 28 #2-ALT, EXCO Operating: 12.293 MMcf/day IP on 18/64 in. choke at 7,750 psi; Perfs: 12,864-17,008, length: 4,144 ft.; Caspiana Field, DeSoto Parish, S28/T14/R12; res. A, serial #241781

EIA: Storage +98 Bcf to 2.354 Tcf

The weekly EIA working gas in storage report showed a 98 Bcf net injection, bringing the total inventory to 2.354 Tcf.  The weekly injection was 21% higher than last year (+81 Bcf) and 14% higher than the five year average (+86 Bcf). The current storage level is 9.9% lower than last year (258 Bcf) and 2.6% lower than the five year average.


Temperatures in the Lower 48 last week averaged 70.1 degrees, 2.3 degrees cooler than the previous week and 2.3 degrees cooler than last year but otherwise in line with historical averages.  

Wednesday, June 22, 2011

Marion County: Oil and Paranoia (?)

I like that title, maybe I'll use it for my next novel.  It may be overblown, but I'm just following up on an interesting thought posited by an anonymous poster (are there any other kinds? - don't you people have names, real or imagined???) on a post about the Nancy Brewster #8 well yesterday.  The commenter noted the seven "oil or gas" vertical wells permitted to 12,000 feet by STM Oil & Gas closely bunched together in Marion County, almost due north of (but +/-12 miles from) the Nancy Brewster #8.  I find this interesting because it supports some other rumors I've heard from multiple sources about a narrow north/south oil trend running from Harrison to Cass County.  Here is a link to a map of the STM wells that shows their location relative to the Brewster 8 and the GMX Haynes well in Marion Co.


But what caught my eye was a slightly paranoid remark (which sounds remarkably like something I might think, so I don't mean that to sound disparaging) that the latest GMX investor presentation had a large caption on its Haynesville map that coincidentally covers up the company's acreage in Marion Co.  Upon further investigation, I find that it was true (see blue text bubble below) and that the placement of the green "BREWSTER NANCY #8 VALENCE" text bubble also covers up GMX property at the Harrison/Marion county line. I was able to do a screen capture of the map with and without the captions that shows shows the obscured leasehold:


Last Week's Louisiana Completions

Here are the Louisiana Haynesville Shale completions from last week.  Expect some more tomorrow.

  • Elm Grove Plntn 20 H #1, Petrohawk (KCS): 7.276 MMcf/day IP on 14/64 in. choke at 7,688 psi; Perfs: 11,439-15,284, length: 3,845 ft.; Elm Grove Field, Bossier Parish, S29/T16/R11; res. A, serial #241936
  • Beuregard 21-15-15 H #1, Chesapeake Operating: 15.504 MMcf/day IP on 22/64 in. choke at 6,527 psi; Perfs: 11,556-15,555, length: 3,999 ft.; Caspiana Field, Caddo Parish, S21/T15/R15; res. A, serial #240892

Tuesday, June 21, 2011

New Texas Permits

6/14/11 - 6/20/11:

  • D'Asto #5H, NFR Energy; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: EARLE, D, A-235
  • Sun King GU #1H, Samson Lone Star; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: CHIRINO, J A, A-17

New Texas Completions

6/14/11 - 6/20/11:

  • Nancy Brewster Gas Unit #8, Valence Operating: .921 MMcf/day IP, 24/64" choke, 1,015 psi; Perfs: 11,130-11,885, length: 755 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: DAVIDSON, R M , A-220
  • Revolution 9 GU #1H, Samson Lone Star: 8.502 MMcf/day IP, 12/64" choke, 7,700 psi; Perfs: 13,504-19,459, length: 5,955 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: YBARBO, J I , A-60
  • Attoyac River Gas Unit #2H, EOG Resources: 12.068 MMcf/day IP, 17/64" choke, 8,328 psi; Perfs: 13,688-18,100, length: 4,412 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: YBARBO, J I , A-60

Another Brewster #8 Data Point

This morning I noticed an earlier completion report for the (in)famous Valence Operating Nancy Brewster #8 well that is at the center of the deep oil rumor circulating in east Texas.  The report was filed 3/25/2011 and memorializes a 12/20/2010 completion that was shut-in.  The well was plugged at 12,036 to 12,148 feet but not perf'd.

I don't see any big revelations here, as there was no perf activity, but since there seems to be a lot of excitement about this well, I wanted to make note of this document.  Here is the link to the other paperwork associated with this filing.  Here is a link to all of the paperwork for the most recent filing for the perf'd completion I referenced yesterday.

Taking a moment to play Devil's Advocate, I wonder if some of the excitement is misplaced and the shallower Cotton Valley is the actual target for liquids since the formation is productive for liquids in the area.  Just sayin', you know...

Monday, June 20, 2011

Nancy Brewser #8: Revealed!

And the crowd goes, "Awwwwwww!"  Initial potential results from the now famous Nancy Brewster Gas Unit #8 were posted last Friday.  (I'll post last week's Texas completions and permits tomorrow.)  The Brewster is a vertical well drilled by Valence Operating south of Marshall, TX.  Results show that the well was completed May 17 at 921 Mcf/day of natural gas on a 24/64" choke at 1,015 psi flowing pressure.

What didn't show up was any sign of oil or condensate.  Rumors have circulated for months that this was the well where oil was found under the Haynesville Shale layer in either the Smackover or Norphlet formation.  At first glance, this report seems to refute the rumors.

But don't despair just yet, oil fans.  The revised collective rumors (before today's result) seemed to indicate that the well was plugged above what would have been the Norphlet layer and that there is a larger, narrow deep trend going northward that operators are still trying to keep hush-hush.  Take that for what you will.

June Mineral Board Auction Results

The monthly Louisiana DNR Office of Mineral Resources lease sale saw a handful of  Haynesville Shale-prospective properties auctioned in June after having none in May.  The average bonus was $5,771/acre and the weighted average was $4,319/acre.  All winning bids had a 25% royalty.  The results were skewed somewhat because one property, a 241 acre parcel in Bienville Parish, represented 88% of the awarded acreage.


Four parcels in southern Red River Parish totally 41 acres received no bids, while 108 acres on the DeSoto/Natchitoches line received a bid for $750/acre that the state refused as insufficient consideration.

Friday, June 17, 2011

Haynesville Shale Rig Count: -1 to 127

Baker Hughes woke up from a long slumber to update all of the rigs in the Haynesville region.  The net impact is that the count dropped by one (-2 in LA to 94, +1 in TX to 33) to 127.  While the bottom line didn't show much change, there was a lot of shuffling of rigs.  It is interesting to see the shift in activity from north to south. Case in point, Harrison Co. TX is down to one working Haynesville rig, while Sabine Parish LA is up to 21.




Updated Oil Rumor Spreadsheet Again

With Baker Hughes now back from vacation, there were a whole bunch of rig movements in Texas this week.  I updated the potential oil-targeted rigs on the Oil Rumor spreadsheet to stay current.

U.S. Rig Count: +5 to 1,860

The weekly Baker Hughes rig count showed a five rig increase in the U.S., bringing the current rig count to 1,860, its highest level since the end of November 2008.  This week, oil rigs were up 15 to 984, while gas rigs were down nine to 870 and miscellaneous rigs were down one to six.  By type, directional rigs were up ten to 241, while horizontal rigs were down four to 1,061 and vertical rigs were down one to 558.

In the Haynesville Shale region, inclusive of other formations, the rig count was down one to 149, dropping two in north Louisiana to 99 (it's lowest level since September 2009) and east Texas was up one to 50.

Look for the Haynesville Shale rig count later this afternoon.

Thursday, June 16, 2011

EIA: Storage +69 Bcf to 2.256 Tcf

The weekly EIA working gas in storage report showed a 69 Bcf net injection, bringing the storage levels to 2.256 Tcf.  The weekly injection was 22% lower than last year (89 Bcf) and 21% lower than the five year average (88 Bcf).  The current storage level is 10.9% below last year (2.531 Tcf) and 3.3% lower than the five year average (2.332 Tcf).


Temperatures in the Lower 48 last week averaged 72.4 degrees, 4.0 degrees warmer than the five year average and 1.0 degrees above last year.

Wednesday, June 15, 2011

Shale Kills Another Planned LNG Port

Just like video killed the radio star, shale gas killed the LNG import business.

Yesterday, Hess LNG announced that it will no longer pursue an LNG import terminal in Fall River, MA.  Dubbed Weaver's Cove, the terminal has been opposed vehemently by Massachusetts politicians in a bi-partisan fashion for the past decade.  While nobody in Massachusetts seemed to want an LNG terminal located near a populated area, it was market conditions rather than overwhelming opposition that killed the project.  With the advent of shale gas completely upending the natural gas supply and pricing paradigm in North America, I don't expect any new LNG import facilities to be built in the U.S. or Canada in the next couple of decades.

Tuesday, June 14, 2011

Oil Rumor List Updated

I updated the "Oil Rumor List" with the new permit this week for GMX Resource's Bennett #2 in Harrison Co.  It will be a vertical well to 14,500 feet, with the lowest layer classified as Wildcat targeting oil or gas.

New Texas Permits

6/7/11 - 6/13/11:
  • Bennett #2, GMX Resources; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: TAYLOR, C, A-700 (Note: this well is a deep vertical - 14,500' - also targeting "Wildcat" oil or gas at that depth)
  • Blackbird GU #1H, Samson Lone Star; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: YBARBO, JI, A-60

New Texas Completions

6/6/11 - 6/13/11:

  • Baldwin-Mia Austin (Allocation) #1H, GMX Resources: 6.486 MMcf/day IP, 20/64" choke, 5,200 psi; Perfs: 12,379-17,981, length: 5,602 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: SMITH, W , A-21
  • Stanaland Trust Unit #1H, EOG Resources: 11.476 MMcf/day IP, 17/64" choke, 8,630 psi; Perfs: 14,580-19,351, length: 4,771 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: MORA, J, A-361
  • Attoyac River Gas Unit #1H, EOG Resources: 8.782 MMcf/day IP, 15/64" choke, 7,393 psi; Perfs: 13,248-17,993, length: 4,745 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: YBARBO, J I , A-60

Sunday, June 12, 2011

Haynesville Shale Rig Count: -1 to 128

The weekly Haynesville Shale rig count dropped by one rig to 128. The Louisiana count decreased by one to 96, while the Texas count was unchanged at 32.



Friday, June 10, 2011

U.S. Rig Count: +1 to 1,855

The weekly Baker Hughes rig count showed a one rig increase, bringing the number of working rigs in the U.S. to 1,855.  Oil rigs increased by 10 to 969, while gas rigs decreased by eight to 879 and miscellaneous rigs decreased by one to seven.  By type, horizontal rigs were up 14 to 1,065, directional rigs were up one to 231 and vertical rigs were down 14 to 559.

In the Haynesville Shale region, inclusive of other formations, the rig count decreased by two to 150.  North Louisiana was down one to 101 while east Texas was down one to 49.

I'm on vacation right now, so look for the detailed Haynesville Shale rig count a little later than usual, probably tonight or tomorrow.

Thursday, June 9, 2011

New Louisiana Completions

  • D A Richlen Land 7 H #1, Petrohawk Operating: 7.709 MMcf/day IP on 14/64 in. choke at 8,173 psi; Perfs: 11,630-16,053, length: 4,423 ft.; Caspiana Field, Caddo Parish, S18/T15/R12; res. A, serial #242176
  • Tigre Plnt 25-15-12 H #1, Chesapeake Operating: 16.272 MMcf/day IP on 22/64 in. choke at 6,730 psi; Perfs: 12,018-16,264, length: 4,246 ft.; Caspiana Field, Caddo Parish, S25/T15/R12; res. B, serial #242391
  • Stevens 12 H #1, Chesapeake Operating: 15.048 MMcf/day IP on 22/64 in. choke at 6,482 psi; Perfs: 11,441-15,958, length: 4,517 ft.; Cedar Grove Field, Caddo Parish, S12/T16/R14; res. A, serial #240766

EIA: Storage +80 Bcf to 2.187 Tcf

The weekly EIA working gas in storage report showed an 80 Bcf net injection, bringing the total gas in storage to 2.187 Tcf.  The weekly injection was 18% lower than last year (98 Bcf) and 17% lower than the five year average (96 Bcf).  The current storage level is 255 Bcf lower than last year's and 58 Bcf lower than the five year average.


Temperatures last week averaged 69.9 degrees, 3.3 degrees warmer than the five year average and 1.3 degrees colder than last year.

Wednesday, June 8, 2011

Exxon Still Buying Gas

Today, Exxon announced that it is buying two related privately-held companies operating in the Marcellus Shale.  Exxon in buying Phillips Resources and TWP Inc. for $1.69 billion, adding about 317,000 Marcellus acres to its portfolio.

Exxon has already purchased XTO Energy (a much celebrated and criticized deal) and Ellora Energy.  With the Phillips deal, Exxon continues to show that the company is taking a long term view towards natural gas, specifically gas found in shale. It is yet another bullish sign for the natural gas industry, even in these still dark days for the commodity.

Tuesday, June 7, 2011

New Texas Permits

5/31/11 - 6/6/11:

  • Wallace Unit #2H, EOG Resources; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: MORA, JM, A-827
  • Fitzallen SU #1H, EXCO Operating; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: JONES, N, A-175

New Texas Completions

5/31/11 - 6/6/11:

  • Taylor "A" - Taylor (Allocation) #23H, Devon Energy: 5.133 MMcf/day IP, 18/64" choke, 6,315 psi; Perfs: 10,964-16,523, length: 5,559 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: WILSON, T D, A-811
  • Sunrise Gas Unit #1H, EOG Resources: 12.164 MMcf/day IP, 18/64" choke, 8,610 psi; Perfs: 13,945-18,531, length: 4,586 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: ROBERTS, N G, A-38
  • Samford #1H, Chesapeake Operating: 9.553 MMcf/day IP, 16/64" choke, 9,553 psi; Perfs: 12,170-16,420, length: 4,250 ft.; Carthage Field (Haynesville Shale), Shelby Co., Survey: VANN, NM, A-751

Friday, June 3, 2011

Haynesville Shale Rig Count: -2 to 129

The weekly Haynesville Shale rig count dropped again this week, losing two to end up at 129 working rigs.  Louisiana (97) and Texas (32) both lost one rig apiece.

Unfortunately, Baker Hughes, the source of my rig count data, has been providing pretty stale numbers since mid-April.  On the spreadsheet, you will see lots of spud dates from the first quarter and even a few from late 2010.  One well that BHI still counts as drilling was reported as complete earlier this week.  Unfortunately I am at the mercy of my data source.  Next week I hope to see a flood of new data.



U.S. Rig Count: +7 to 1,854

The weekly U.S. Baker Hughes rig count showed a 7 rig increase, brining the total number of working rigs to 1,854.  This week, gas rigs increased by six to 887, oil rigs increased by one to 959 and miscellaneous rigs held at eight.  By type, vertical rigs were up 12 to 573, while horizontal rigs were down three to 1,051 and directional rigs were down two to 230.

In the Haynesville Shale region, inclusive of other formations, the rig count was down one to 152, holding steady in north Louisiana at 102 and dropping one in east Texas to 50.

Thursday, June 2, 2011

EIA: Storage +83 Bcf to 2.107 Tcf

The weekly EIA working gas in storage report showed an 83 Bcf net injection, bringing the total gas in storage to 2.107 Tcf.  The weekly injection was 8% lower than last year (+90 Bcf) and 16% lower than the five year average (+99 Bcf).  The current storage level is 237 Bcf below last year (2.344 Tcf) and 43 Bcf below the five year average (2.149 Tcf).


Temperatures last week averaged a devilish 66.6 degrees, which was 2.0 degrees warmer than the five year average and 0.9 degrees colder than last year. With the warmer season upon us, cooling degree days now become the driver of electric power consumption.

New Louisiana Completions

  • Roos 5 H #1, QEP Resouces: 8.345 MMcf/day IP on 14/64 in. choke at 8,296 psi; Perfs: 11,659-16,228, length: 4,569 ft.; Elm Grove Field, Bossier Parish, S5/T16/R11; res. A, serial #241876
  • Calhoun 7-12-12 H #1, Chesapeake Operating: 8.52 MMcf/day IP on 16/64 in. choke at 4,040 psi; Perfs: 12,019-16,441, length: 4,422 ft.; Red River-Bull Bayou Field, DeSoto Parish, S7/T12/R12; res. A, serial #239433
  • RB Farms 4-14-16 H #1, Chesapeake Operating: 6.264 MMcf/day IP on 14/64 in. choke at 6,204 psi; Perfs: 11,575-15,793, length: 4,218 ft.; Bethany Longstreet Field, Caddo Parish, S4/T14/R16; res. A, serial #241253

Wednesday, June 1, 2011

KKR Scores Again with Marathon Purchase of Eagle Ford Acreage

Today, Marathon Oil announced that it had purchased 141,000 acres in the Eagle Ford Shale for $3.5 billion from Hilcorp Resources Holding, a joint venture of Hilcorp Energy and private equity firm KKR.  News outlets report that it  works out to be around $21,000 per acre for the land itself.  Including the production, the price per acre is around $24,800.  Quite a score for the sellers and a record transaction for the play.  Most of the acreage is in the "liquidy" section of the play, helping justify the valuation.

KKR joined Hilcorp last year in forming the joint venture, investing $400 million for a 40% interest.  That investment netted the company $1.13 billion - not bad for a year's work.  It is another big success in the shale gas industry for KKR, which scored big with its brief investment in East Resources and recently invested in some Barnett Shale acreage and a midstream venture with El Paso.

Haynesville: The New Liquids Play???

Well, not exactly, but I did note a new Haynesville Shale (actually Jurassic) completion from last October that appeared in the DNR system this week from Encana that had an initial production of 19 barrels of condensate per day.  There was a lot of gas too, so the gas/oil ratio was a whopping 625,210 to 1:

  • Weyerhaeuser 22 H #1, Encana Corp.: 11.879 MMcf/day IP on 24/64 in. choke at 8,686 psi casing pressure; Perfs: 13,586'-18,076', length: 4,490 ft.; Bayou San Miguel Field, Sabine Parish, S22/T9/R12; res. Jurassic-A, serial #241097
I don't have any more details at this point.  As much as I'd love to declare (or start the rumor) that Haynesville is the next big liquids play, I can't convert blind optimism into reality!