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Started By
Message
re: Haynesville Shale
Posted on 7/2/08 at 12:38 am to tigerjohnny
Posted on 7/2/08 at 12:38 am to tigerjohnny
Where?
0
Posted on 7/2/08 at 7:03 am to Tiger JJ
This transaction is such genius.
1) You get your funding without debt or dilution
2) You sold at a substantial profit
3) You create a valuation landmark for the remaining 80% based on the FMV sale of the 20%
With todays prices, the PV 10 of this company is over $45 Billion I believe (using Q1 PV 10 and sensitivity price guidance in the press release back then). Remember, PV 10 only includes proved reserves. Thus the $45 Billion does not include any new proven up reserves, the Haynesville piece, any unproven in the other plays like Barnett, Fayetteville, Marcellus, Washburn, nor the 1 billion barrels of oil they reported back in March.
Compare that to an enterprise value of under $50 Billion..... the undervaluation story becomes clearer and clearer.
They have a conference call at 9AM today... I hope they update production guidance (only piece of the current puzzle that I am waiting on)....
1) You get your funding without debt or dilution
2) You sold at a substantial profit
3) You create a valuation landmark for the remaining 80% based on the FMV sale of the 20%
With todays prices, the PV 10 of this company is over $45 Billion I believe (using Q1 PV 10 and sensitivity price guidance in the press release back then). Remember, PV 10 only includes proved reserves. Thus the $45 Billion does not include any new proven up reserves, the Haynesville piece, any unproven in the other plays like Barnett, Fayetteville, Marcellus, Washburn, nor the 1 billion barrels of oil they reported back in March.
Compare that to an enterprise value of under $50 Billion..... the undervaluation story becomes clearer and clearer.
They have a conference call at 9AM today... I hope they update production guidance (only piece of the current puzzle that I am waiting on)....
Posted on 7/2/08 at 8:15 am to igoringa
My family has a 178-acre tract of property in Claiborne Parish. Section 13, Township 23 North, Range 4 West. I have been told by several local officials with the Office of Conservation that Claiborne Parish is covered with oil and natural gas. Does anyone know about any activity in this area?
Thanks!
Thanks!
Posted on 7/2/08 at 8:25 am to Latech80
I'm still waiting for cwill to exhibit more acts of brilliance like he did earlier. Obviously this guy does not know what the hell he is talking about and cites no examples or reasons to support his statements.
Posted on 7/2/08 at 8:25 am to Latech80
CHK JUST STATED THEY BELIEVE THIS MAY TURN OUT TO, NOT ONLY BE THE LARGEST NATURAL GAS FIELD IN THE UNITED STATES, BUT THE 4TH LARGEST FIELD IN THE WORLD!!!!!!!!!!!!!!!
That is a message that deserves all caps if I have ever seen one!
That is a message that deserves all caps if I have ever seen one!
Posted on 7/2/08 at 8:36 am to igoringa
This calls for dancing bananas.
Posted on 7/2/08 at 8:52 am to igoringa
quote:
CHK JUST STATED THEY BELIEVE THIS MAY TURN OUT TO, NOT ONLY BE THE LARGEST NATURAL GAS FIELD IN THE UNITED STATES, BUT THE 4TH LARGEST FIELD IN THE WORLD!!!!!!!!!!!!!!!
Hope this is true (not that CHK is saying it, but that this is the 4th largest field in the world). The NW La economy will be sitting pretty for a long time to come if it is.
Posted on 7/2/08 at 8:53 am to LSU0358
Summary of the call:
Chesapeake Conference Call July 2, 2008 9:00am
Chairman/CEO Aubrey McClendon (Summarized)
• Win-win partnerships between Chesapeake and PXP - Great news for Chesapeake shareholders
• Haynesville 4th largest gas field in the world
• Chesapeake has invested $2.5B in Haynesville
• Play just underway, data suggest 250TCS
• Barnett had 50TCS, which is only 20% of Haynesville –
• Our country should realize how blessed we are as a nation, especially during this time of record high gas prices – can be very helpful in converting to hybrids
• We are so confident because 3.5 M acres defined as core area
• These wells are in a class of their own – calling them “triple X monsters” – likely to get better over time – 8th well, 2 days ago brought on the best so far: 4.5-8.5 BCSE
• PXP partner – deep LA roots helpful as they develop Haynesville in the decades to come – if you snooze, you lose and Ches is not snoozing - Haynesville will develop similarly to Barnett but also differently – it will be easier than Barnett in some ways
Chesapeake Conference Call July 2, 2008 9:00am
Chairman/CEO Aubrey McClendon (Summarized)
• Win-win partnerships between Chesapeake and PXP - Great news for Chesapeake shareholders
• Haynesville 4th largest gas field in the world
• Chesapeake has invested $2.5B in Haynesville
• Play just underway, data suggest 250TCS
• Barnett had 50TCS, which is only 20% of Haynesville –
• Our country should realize how blessed we are as a nation, especially during this time of record high gas prices – can be very helpful in converting to hybrids
• We are so confident because 3.5 M acres defined as core area
• These wells are in a class of their own – calling them “triple X monsters” – likely to get better over time – 8th well, 2 days ago brought on the best so far: 4.5-8.5 BCSE
• PXP partner – deep LA roots helpful as they develop Haynesville in the decades to come – if you snooze, you lose and Ches is not snoozing - Haynesville will develop similarly to Barnett but also differently – it will be easier than Barnett in some ways
Posted on 7/2/08 at 9:24 am to justbill
quote:
...wells visible on Hwy 3 between Benton and Bossier City.
That's my family. Very little coming out of that well. I was told last week that it was producing 2mcf/day. I have 206 acres on Hwy 71 (12 mile bayou runs around the west and south side of the land). We leased this land for $450/acre 2 years ago with a 25% royalty. I have been told (by reliable sources)that the land owner just north of us has well(s) doing 22mcf/day. I know that everyone is really into the Haynesville Shale, but this Cotton Valley (at least in this location) seems to be doing really well. Has anyone else heard anything about this area.
This post was edited on 7/2/08 at 9:29 am
Posted on 7/2/08 at 9:58 am to TigerScratch
The most telling statement of the entire call to me was the question he referred to Dixon. When the caller asked about drawing the reservoir down to normal pressure Dixon implied that EUR would already be exceeded before this even began to appear. That says that the 6.5 BCFG EUR per well is still very low. The best areas will likely be 8.5 - 10 BCFG EUR wells.
Posted on 7/2/08 at 9:59 am to TigerDog83
Chesapeake Conference Call July 2, 2008 9:00am
Chairman/CEO Aubrey McClendon (Summarized)
• Win-win partnerships between Chesapeake and PXP - Great news for Chesapeake shareholders
• Haynesville 4th largest gas field in the world
• Chesapeake has invested $2.5B in Haynesville
• Play just underway, data suggest 250TCS
• Barnett had 50TCS, which is only 20% of Haynesville –
• Our country should realize how blessed we are as a nation, especially during this time of record high gas prices – can be very helpful in converting to hybrids
• We are so confident because 3.5 M acres defined as core area
• These wells are in a class of their own – calling them “triple X monsters” – likely to get better over time – 8th well, 2 days ago brought on the best so far: 4.5-8.5 BCSE
- claimed that the reason for withholding info was to prevent other companies from receiving a blueprint to their technical practices
- 4 corners work from all the companies that have outlined the shale from their drilling.
- Haynesville Shale will move quickly.
- PXP retains the ability to sell their interest in the HS
- Do not forsee selling hshale--wanted to buy more
- Chesapeake retains first right of refusal
- Ches - 4,000 landmen in the HShale - 1,000 in Barnett, scouring the field.
- Dollars per acre was set by Ches.....$30,000 per acre....paid that price because Ches is going to agressively work HShale to increase the rate of return, deploying PXP capital smartly was the goal.
- Mix of Shale and Sands? Looking for 100% shale...looking for great black shale with the right porosity and organic composition. When you hear the flow rates their will be skepticism but it goes back to the high rates of pressure. The consistency and simplicity is the reason for the dynamic production.
- Flow rates - what are the infrastructure restraints? On top of the game large structure that handles other plays so will be moving fast. We are east so we are closer to the markets...so better pricing. Do the math and HShale could do [better? He kinda trailed off here] because we are closer to the eastern markets.
- Great opportunity for the US to retrofit gas stations and use natural gas instead of foriegn oil.
- Potentially liberating event.
- Here in the HShale we may have 10 years of production.
- 60 rigs operating by 2010
- Play could not be in a better spot.
- Regulatory structure that is favorable
- Great pipeline structure...past many bottlenecks will help this happen much more quickly. Do have to extend supply lines...this helps drive down costs.
- Working through Twin Cities in Shreveport..has put togther an impressive organization..has a network set up..tough sledding to go door to door to buy leases.
Chairman/CEO Aubrey McClendon (Summarized)
• Win-win partnerships between Chesapeake and PXP - Great news for Chesapeake shareholders
• Haynesville 4th largest gas field in the world
• Chesapeake has invested $2.5B in Haynesville
• Play just underway, data suggest 250TCS
• Barnett had 50TCS, which is only 20% of Haynesville –
• Our country should realize how blessed we are as a nation, especially during this time of record high gas prices – can be very helpful in converting to hybrids
• We are so confident because 3.5 M acres defined as core area
• These wells are in a class of their own – calling them “triple X monsters” – likely to get better over time – 8th well, 2 days ago brought on the best so far: 4.5-8.5 BCSE
- claimed that the reason for withholding info was to prevent other companies from receiving a blueprint to their technical practices
- 4 corners work from all the companies that have outlined the shale from their drilling.
- Haynesville Shale will move quickly.
- PXP retains the ability to sell their interest in the HS
- Do not forsee selling hshale--wanted to buy more
- Chesapeake retains first right of refusal
- Ches - 4,000 landmen in the HShale - 1,000 in Barnett, scouring the field.
- Dollars per acre was set by Ches.....$30,000 per acre....paid that price because Ches is going to agressively work HShale to increase the rate of return, deploying PXP capital smartly was the goal.
- Mix of Shale and Sands? Looking for 100% shale...looking for great black shale with the right porosity and organic composition. When you hear the flow rates their will be skepticism but it goes back to the high rates of pressure. The consistency and simplicity is the reason for the dynamic production.
- Flow rates - what are the infrastructure restraints? On top of the game large structure that handles other plays so will be moving fast. We are east so we are closer to the markets...so better pricing. Do the math and HShale could do [better? He kinda trailed off here] because we are closer to the eastern markets.
- Great opportunity for the US to retrofit gas stations and use natural gas instead of foriegn oil.
- Potentially liberating event.
- Here in the HShale we may have 10 years of production.
- 60 rigs operating by 2010
- Play could not be in a better spot.
- Regulatory structure that is favorable
- Great pipeline structure...past many bottlenecks will help this happen much more quickly. Do have to extend supply lines...this helps drive down costs.
- Working through Twin Cities in Shreveport..has put togther an impressive organization..has a network set up..tough sledding to go door to door to buy leases.
Posted on 7/2/08 at 10:11 am to Latech80
LaTech80: You must be from Junction City or something. (Ha just kidding) I am from Summerfield.
Posted on 7/2/08 at 10:12 am to TigerDog83
Posted on 7/2/08 at 11:04 am to gingles
What is a better place to invest money right now..HK or CHK?
..or someone else?
Did I hear someone say there's a HS fund out there as well?
..or someone else?
Did I hear someone say there's a HS fund out there as well?
Posted on 7/2/08 at 11:07 am to nyvram
Here's a map I got from a trader friend of mine. I like the level of detail:
Posted on 7/2/08 at 11:08 am to TigerDog83
TigerDog can you recommend a good oil and gas attorney in the Shreveport area?
Posted on 7/2/08 at 11:33 am to Tiger JJ
wrong about being east of bottlenecks.....just because it's east of the Barnett Shale infrastructure doesn't mean it will get out of NW LA easily...
there have been constraints in ETX and NW LA for years, and the recent pipeline expansions aren't nearly enough to handle the onslaught of 500,000 - 1+ bcf of new gas in this area anytime soon.
Take it from someone who's marketed gas in this area for years.....basis values will get much "wider" (discount to NYMEX) in the coming months as this play continues absent some serious new pipeline expansions.
there have been constraints in ETX and NW LA for years, and the recent pipeline expansions aren't nearly enough to handle the onslaught of 500,000 - 1+ bcf of new gas in this area anytime soon.
Take it from someone who's marketed gas in this area for years.....basis values will get much "wider" (discount to NYMEX) in the coming months as this play continues absent some serious new pipeline expansions.
Posted on 7/2/08 at 11:53 am to TigerStuckinOkieland
quote:
Take it from someone who's marketed gas in this area for years.....basis values will get much "wider" (discount to NYMEX) in the coming months as this play continues absent some serious new pipeline expansions.
What kind of a haircut do you think DeSoto and Caddo will have to take off of wellhead (which I have calculated right now in the 12's)
Posted on 7/2/08 at 1:45 pm to Tiger JJ
Well the new line that is running through Red River and Desoto Parishes is good for 1.5 BCFGD supposedly. The word is CHK has already bought pre-commitments for 1.2 BCFGD in this line. There is also another Midcon line going through Township 23N which will probably also be used to export gas although it has not been installed yet.
Posted on 7/2/08 at 2:00 pm to TigerDog83
quote:
Well the new line that is running through Red River and Desoto Parishes is good for 1.5 BCFGD supposedly.
If we assume the wells flowing at 5MCF/d, then that's only room for 300 wells. Is that even nearly enough?
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