Natural Gas: Playing the Haynesville Shale 18 comments
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The Wall Street Journal explicated the Haynesville shale play offering various views on the three main ways to participate. Chesapeake (CHK) is the diversified approach, Petrohawk (HK) is the concentrated way, and Goodrich (GDP) seems to be the small cap approach. Haynesville is a southeastern shale deposit in Arkansas, Louisiana, and Texas.
The Journal article states:
Chesapeake Energy has snapped up more than 300,000 acres of potential mineral reserves and is bargaining for 200,000 more in the Haynesville area. The company, which has vast resources to unearth gas deposits, accelerated a real-estate bidding war in April, when it declared that Haynesville “could potentially have a larger impact” than any of its previous energy investments...The race to acquire Haynesville acreage started fewer than two years ago. Petrohawk was already drilling a gas deposit known as Cotton Valley, a separate deposit that runs roughly 3,000 feet above parts of Haynesville’s deposits, when it became aware of Haynesville in 2006. Chesapeake later raised expectations with claims that Haynesville holds large quantities of natural gas.
The real-estate frenzy, largely inspired by Chesapeake’s initial claims of vast resources, has created a short-term windfall for Goodrich, which has acquired most of its Haynesville land at an average price of $350 per acre. New territory in Haynesville is selling for more than $4,000 an acre, according to a senior official at Goodrich. The rush to develop Haynesville is also being fueled by natural-gas-futures prices that recently reached $11.17. All three energy producers are in a hurry to begin drilling while natural-gas prices are high.
It is an unconventional gas field that seems typical of a number of others, such as the Barnett Shale, that are lifting U.S. natural gas production and offering a vision of resource plenty. I suspect that vision is accurate in the short term but likely to disappoint beyond a few years out. Moreover, it may tempt electric utilities to add gas fired capacity, a decision they may come to regret if gas price continue their recent rapid climb.
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This article has 18 comments:
20smoney.com/2008/05/1.../
Pickens proposes, and puts his money where his mouth is, wind energy be increased to produce electricity. Then some current NG used for electrical generation and of course the new NG shale plays can be used to displace some reliance on oil products for transportation including cars. His company is CLNE and they are building CNG (compressed Natural Gas) filling stations eventually across the entire US.
I have read many articles about these new shale plays and am somewhat astonished when XCO is not mentioned associated with all three, Marcellus, Huron and Haynesville. For the size of the company, they have oversized positions in all three shale plays mentioned here and they have some infrastructure and most of their acreage is held by current production from shallower wells.
Now, T Boone is doing what? across the nation?
Does he have access to TRILLIONS? This is a niche play. THERE IS NO INFRASTRUCTURE!!!!!
His wind farm alone is expected to cost $10 Billion currently and not be completed until 2014...expect final costs to double,triple....
Pipe dreams.
Instead of importing oil, we will be importing infrastructure for a long time.
the infrastructure is provided by each NG utility connected to houses/businesses. if you can grill steak, dry clothes, heat your empoyees your in.
But that is not infrastructure, that is merely a source for those nearby.
How will you access that gas? Punch a hole in the pipeline, like in Nigeria? Create a fleet of LNG trucks to drive it from the nearby utility to your newly created airtight special storage tanks?
What you are talking about is already in place and has been found wanting. The Chinese have built 5 million+ cities based on different fuel sources for vehicles, Hydrogen, Coal Gasification, Nat. gas, etc. but have not yet found one to base other cities on.
I have no idea how the technology works that allows what is a gaseous material to be burned fast enough to power a vehicle and yet be replenished continuously without blowing everything up. Not Rhethorical....I don't have a clue?
A couple of months ago it was $200 to $400 per acre. Paying over $10,000,000.00 to lease each section they would have to be certain.
gohaynesvilleshale.com
There are many things to consider such as noice and light abaitment;what it will do to your roads; protect your underground water source; protect other mineral right other than gas or oil and many others.
Don't forget that any money that they pay you up front, you will owe the IRS about a thrid of it because it is taxable.
www.oilshalegas.com/ha...
And for a list of companies drilling at Haynesville
www.oilshalegas.com/ha...
Keep up the good work!
$$ an acre to lease for?
Here is a link that might be useful: www.lincenergy.us