More Bad News for Sabine OR Good News, Nabors Logan 34. Is the cup half full or half empty?

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Permalink Reply by ELLIS HUGH on July 20, 2009 at 9:54pm

Thank you for your explanation. Your (original) title make a lot more sense now. Hopefully they can get Sabine figured out and have some success there. Or another company attempts to develop the acreage, as Skip mentioned above.

Is Ellora drilling elsewhere in the Shale? Are they drilling and completing successfully in more 'proven" areas?

Hopefully it is incompetence on behalf of Ellora vs. a geological issue.

--EH

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Permalink Reply by Les B on July 20, 2009 at 10:30pm

WR, I will stand by my original comment that the Nabors Logan 34 #1 test results are good news.

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Permalink Reply by w.r. frank on July 21, 2009 at 9:46am

No problem! Time will tell.

Les, what is the difference between a SDM2G and a DT1 test. Many times the O&G company only does the SDM2G test. If it does both, then it appears to most often use the SDM2G for the potential and allowable filing.

Also, do you know how many units SWEP has in Sabine and Natchitoches? I think it is a bunch. It is interesting that SWEP hasn't pulled a permit in Sabine since December 2007, but ECA pulled three in July 2009 (none spud yet, but a poster on this thread says pads are being prepared). Perhaps, and hopefully, SWEP is turning the drilling and completion over to its partner, ECA. Now, THAT IS GOOD NEWS! For Sabine and NW La., I hope ECA figures out how to deal with the HA. Shale in the south.

SWEP is just strange. They have no sense of urgency. SWEP gets a well to TD and then waits months to get a completion rig. One day I drove down to Blackstone Ivory 10 and Blackstone Ivory 15, which had been sitting for months WOC. The guard told me that the SWEP guys words were "we have gone fishing." I used to be a petroleum engineer for Shell. It wasn't that bad then.

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Permalink Reply by Les B on July 21, 2009 at 12:50pm

WR, the SDM2G is witnessed by the state and therefore utilized for setting the allowable. If you notice the SDM2G was with a 7/64" choke hence the reason for the lower rate. I utilized the DT-1 because the flowing pressure was included. Eventually the state will post the full information for the SDM2G.

Swepi has 71 Haynesville units in Sabine Parish but none in Natchitoches Parish. My assumption was EnCana would now be handling the drilling and completion work in Sabine Parish with Swepi continuing to focus on De Soto Parish.

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Permalink Reply by pelkid on July 21, 2009 at 8:08am

New Permits- Sabine
EnCana, RSD LLC 4 #H1 Well, Serial #239985, S4-T9N-R11W, Grogan Field
EnCana, TJ Sistrunk 3 #H1 Well, Serial #239983, S3-T9N-R12W, Pleasant Hill Field
Encana, HA RA SUE; GUFFY PATTISON 13H 001, Serial # 239992 , Bayou San Miguel Field

The pads are built or being built. The Murray 31 is going into the tail end of a Crosstex(LIG) 6 inch line with limited capacity. The Olymypia 26 - That was human error that caused that to be plugged. Completion problem. A gathering line was to be laid from Gulf South Transmission in lower Sabine. EnCana is stepping up for SWEPI. Most of these leases are set to expire within a year.

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Permalink Reply by w.r. frank on July 20, 2009 at 10:38pm

Hi All,

Since I made the original post about "More Bad News for Sabine," and got comments objecting to the "More," as if there was no prior bad news for Sabine and then objecting to the view that Nabors Logan 34 is "bad news."

Other than the fact that some AH out there saw fit to edit my post and change the caption to "More Good News for Sabine" which really pissed me off since the recaptioned post was not my view, yet my name still appeared. How would you feel. Keith should change the site so only the poster can edit his/her post.

Now, as to whether there was previous bad news so that Nabors Logan 34 is perhaps "more" bad news. In my view, there has never been any good news from the southern sector of the HA Shale and there is ample bad news, to wit:

1) the HA Shale is deeper in the south and thus more expensive to drill and more difficult and therefore more risky;

2) the HA. Shale has a higher temperature in the south and see 1) above for negatives;

3) the HA. has a higher pressure in the south and see 1) above;

4) the HA Shale has a higher sulfur content in the south (one reader said NL 27 smelled like rotten eggs when it blew out) and see 1) above;

5) there is very little infrastructure in the south compared to Desoto, Caddo, RR and Bossier;

6) SWEP. IMO SWEP is a negative. I understand that SWEP is the largest unit operator in the south (perhaps Les or Skip could give us data). SWEP is a big, slow company which has demonstrated no speed or competence in drilling OR completing horizontal wells in the HA Shale. Name one SWEP well on stream to sales with reported production. NONE. NADA. SWEP has abandoned Sabine for the north. SWEP hasn't pulled a permit in Sabine since 2007; since January 2009 it has pulled 22 in Desoto and 1 in RR.

7. the porosity is lower in the south (direct quote from the COO of HK at the DUG conference in Ft. Worth).

8. capital allocation. Drilling budgets will be allocated to HBP in the next few years, but even HBP decisions will allocate capital to the most demonstratively productive, least risky units. To date, Sabine lags behind other areas of the HA play in demonstrating good performance. Please note, I didn't say it wouldn't, but it hasn't to date. For example, eliminating Ellora's eight permits, there have been SIX permits in Sabine from 1/1/09 to 7/19/2009. There were SIX permits in Desoto in the four days ended July 17, 2009. For the next five years in the HA Shale, it is competition for capital, people and rigs and it will be allocated to the best potential return.

Is Nabors Logan 34 good news or bad news. My friend Les. B makes a good point that the test was on a 10/64 choke and the results were 6.043 mmcfd. I suspect that something is wrong with the test because if it tested at 6.043 mmcfd, then why file for an allowable of 4.116 mmcfd based on that test, plus do another test 11 days later and show 4.116 mmcfd. CHK is now curtailing production in a number of its wells (announced at limiting wells to 10 mmcfd), but my guess is CHK was unwilling to open the choke more in light of the Nabors Logan 27 blowout.

If NL 34 was in a unit that included 320 acres of your property (remember there are no "dry holes" in the HA Shale, only bad completions) and the tool pusher stopped by for coffee, which would you rather hear, "Mr. Sabine, we completed your well last night and it tested:

a) 28 mmcfd like the HK Sample 9 well in 14N, RR;
b) 24 mmcfd like the XCO Lattin 24 well in 14N, Desoto;
c) 15 mmcfd like the CHK Branch 2 well in 14N, Caddo;
d) 16 mmcfd like the CRK Holmes A well in 13N, Desoto;
e) pick any HK Elm Grove well in 16N, Bossier; OR

f) 4.1 mmcfd and it smells like rotten eggs.

It is all in the eyes of the beholder, but IMO if you want another well anytime soon, I call that bad news until there are seven additional wells in each of the above units and many others just like them.

See my response to olddog below on well results and permits.

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Permalink Reply by ShaleGeo on July 21, 2009 at 7:27am

I too, believe lower Sabine is teetering with today's gas prices. Operators who have alternate areas will focus there and ones who have only lower Sabine may re think their development plans. I believe if someone has a problem with a post, they should reply to the post, not have the ability or desire to change the original post. My opinion.
Jay

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Permalink Reply by essay on July 21, 2009 at 1:29pm

It's bad form for people's posts to get changed without someone taking responsibility for it. Most forums have an "edited by" tag for moderators, which we seem to lack here.

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Permalink Reply by Mattie on July 21, 2009 at 4:11pm

Frank,

Good response. HS readers don't want to hear any "bad news" right now, and the implication of your post was that this was very negative. In comparison to other completions, maybe. But, the variables are immense as to why not a better completion. Obviously, they are still trying to figure out the southern end of the play, but still, 4-6,000/day is nothing to sneer at.....it's likely to show a slower decline rate than the 20,000/day wells - just makes sense.

Keep the faith, and just as importantly, don't feel like you need to change your opinion based on a few detractors. We need optimism, for sure, but we also don't need sugar-coating, either.

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Permalink Reply by qwert on July 21, 2009 at 5:04pm

Someone may have already mentioned this, but the Sabine activity includes the Blackstone well (239521) being drilled by Forest Oil in T8 to the south. Fortunately, Encana is moving into Sabine and southern DeSoto to help SWEPI. Encana replaced SWEPI as the operator on the Doucierre well -- 239225-- in DeSoto and has obtained several permits previously identified in Sabine along with others right across the line in DeSoto. I appreciate WR's observations, but I agree with Les that it's still too early to tell in that area. The EOG wells a few miles to the north were pretty solid. Wells are being drilled in southern DeSoto just a few miles from the Sabine line by Petrohawk, CHK, Encana, Comstock, etc, and as those wells get reported, the picture will become more clear to the south. I just hope it's good.

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Permalink Reply by w.r. frank on July 21, 2009 at 5:52pm

Hi qwert,

I am in your court that it is too early to tell about the south. To me, it depends on the quality of the rock-porosity, permeability, TOC, thermal maturity, net pay, kerogen, GIP. In fact, you won't find anything in my posts about what may finally develop. I merely summarized the facts to date and Les and I disagree as to whether NL 34 is positive or negative news. I have property two miles east of the southern EOG well so I have an interest in the south being good.

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