Haynesville Shale Expo Friday

November 13th at Shreveport Civic Center

Bossier Official: Parish should pay for natural gas conversion for resident's cars

Bossier Parish Police Juror Larry Butler suggests that the parish use 40% of projected gas revenue from the Haynesville Shale to pay for residents to convert their cars to run on compressed natural gas.

From The Times: "This is gas coming from land owned by people," he said. "It's managed by the Police Jury, but it's owned by the people. And if we can use the royalties from that to help them save money at the pump, I think it's a win-win situation."

According to Butler, the parish could receive up to $500,000 per month in revenue from its interests. Bossier did not sign leases for its property, but instead will be force-pooled by the oil companies. This means that once the cost of the well is in, the parish will receive 100% of the revenue from the wells less operating expenses. Butler suggests that the program would have a life of 5 or 6 years.

He is likely to meet some stiff resistance from other officials, however. Parish Administrator Bill Altimus said that the parish is already moving ahead with plans to converts its fleet of vehicles to natural gas.

That is good, but sidesteps the issue. Personally, I believe that Butler's idea has merit and should be fully explored.

Butler said "I'm trying to build grass-roots support. The problem is when money starts to come in. Everyone has their own pet project they want to fund."

See'ya Cedric: Shreveport City Council walks out on mayor

According to Adam Causey at The Times, Monday's Shreveport City Council meeting was a little confusing, while yesterday's meeting got downright nasty. The subject was a vote to put up 740 acres of city land, mostly right of ways, for lease with the state mineral board.
At Monday's meeting the council was trying to ascertain if contact had been made with the mineral board. A city attorney stated that Chesapeake was taking care of it. On the face of it, it seems strange to me that an energy company would be doing this. The purpose of placing it with the Mineral Board is so it will be up for public bids, not so a deal between the city and Cheseapeake can be consummated.
Councilman Long got frustrated and left the meeting to call the Mineral Board himself.
On Tuesday the mayor questioned the council's judgment in putting the land up. A lot of Shreveport residents are unhappy because Twin Cities Development (Chesapeake's leasing partner) refuses to deal with inner city neighborhood associations.
When the mayor stated that the arrangment "undermines" local government and residents' best interests, feathers got ruffled. Councilman Joe Shyne booed the mayor and Chairman Ron Webb immediately gaveled an end to the meeting.
I think the mayor has a point and there is no need to rush into it. If he vetoes it, a vote of 5-2 will be needed to override.

The Haynesville Shale: Haynesville the Movie

Haynesville, the documentary movie about the Haynesville Shale has been completed. The film focuses on the lives of three people and the impact the shale action has had on them.
Check out the Haynesville Movie website, watch the trailer and read about the people who made the film.
You can also stay in touch with Haynesville on:
Facebook and Twitter.

Yet another suit filed against Twin Cities Development & Chesapeake

Yet another suit was filed this week in Bossier District Court against Twin Cities Development LLC. This suit also names Chesapeake Louisiana LP as a defendant.
The suit was brought by Sue Young Investments through their attorney, Clint Black.
The suit alleges that Twin Cities had agreed to lease 20+ acres on Bodcau Station Road and failed to do so, causing financial harm to Sue Young Investments.
We will keep you updated on these suits.

Haynesville Shale: Dogwood Homeowners Association sues Twin Cities Development

Dogwood Clubhouse Corp & Dogwood Park Home Owners Association, Inc. (DCC & DPH) filed suit this morning in Bossier District Court against Twin Cities Development LLC (TC) for breach of contract.
The suit alleges that Twin Cities had agreed to the following lease terms:
¼ royalty
3 year primary term-2 year secondary term
Mutually agreed to lease form
$50 p/acre shut in royalty
Release lands below 100 ft. below
base of producing formation
and $15,500 p/net mineral acre for bonus

• A letter confirming this offer dated September 5, 2008, was signed and sent by
  TC to DCC, DPH, and other parties.
• On December 12, 2008, Twin Cities through Mr. Neil Brattin told DCC and DPH through Sue Landry, by telephone, that the $15,500 p/acre would not be honored.
• By letter dated January 6, 2009, from Mr. Brad E. Wilkerson, attorney for TC, to
  Mr. Don Brice, attorney for DCC and DPH, TC basically refuses to execute and follow
  through with the lease and payment. Instead, a new lease at a much lower price is
  proposed.
• By letter dated January 20, 2009, from Mr. Donald Lee Brice, attorney for DCC
  and DPH, to Mr. Brad Wilkinson, attorney for TC, a demand is made upon TC to honor
  its agreement and close the transaction as agreed to at the September 4, 2008, meeting.
• TC has refused to consummate the transaction to date.
• In default of its agreement, TC is indebted unto the two corporations for damages
  as follows:

DCC $15,500 p/acre X 60.763 = $940,431.50
DPH $15,500 p/acre X 43.658 = $676,699.00
Wherefore, Petitioner DCC
Prays for judgment against TC in the amount of $940,431.50
Plus interest from date of judicial demand plus court costs.
Wherefore, Petitioner DPH
Prays for judgment against TC in the amount of $676,699.00
Plus interest from date of judicial demand plus court costs.
The plaintiffs are represented by former Judge Dewey E. Burchett, Jr.

Haynesville Shale: Alive and Well in North Louisiana

The Haynesville Shale is alive and well. From Tobin Newsletter - Vol. 19, June 2009 here are some interesting statistics on leasing activity so far this year.

New Leases Posted since December 2008
(By Parish)
Bienville - 607
Bossier - 6,851
Caddo - 6,881
Claiborne - 829
DeSoto - 1,445
Webster - 265

Haynesville Shale: Another suit filed against Brown Companies

We posted last year about a class action lawsuit that was filed against James M. Brown Builder, Inc, Brown's Property Development, Inc, James M Brown Real Estate, Inc & Brown Builders, Inc.
The Browns were sued again last week by Bronwyn Stonecipher and several other people. The allegations are basically the same as listed in the other suit. Twin Cities Development is also named in the suit.
They are claiming breach of warranty among other things.
The attorney representing the plaintiffs is J. Todd Benson, who also represents the plaintiffs who filed last year.
Last year's suit is dragging on in endless litigation, as I am sure this one will.

Web Seminar: Why the Haynesville Shale is Really That Good

When: Anytime, at your convenience
Where: Your Computer
Cost: $100.00, Includes a copy of the upcoming Haynesville Playbook, mailed to you in March!

Overview:
The Haynesville shale in Northern Louisiana and East Texas is fast becoming the premier shale play in the U.S. After a leasing rush in 2008, the drilling pace is set to pick up. One operator told Oil and Gas Investor that this will be the last play standing, and no wonder: Recent wells have shown initial flow rates of up to 28 million cubic feet a day.

Join us for this exclusive webcast that will answer your questions about what we've learned to date about the Haynesville and how we see the play developing.

Robert C. Turnham, Jr.
President & Chief Operating Officer, Goodrich Petroleum Corp.

Ken L. Kenworthy, Jr.
Co-Founder & President, GMX Resources Inc.

Gary Kolstad
President and CEO
CARBO Ceramics Inc.

Moderated by Peggy Williams, Sr. exploration editor, Oil and Gas Investor

Golf Club at Stonebridge to get $2.4 million from Chesapeake

Excerpt:
The owners of Golf Club at StoneBridge in Bossier City were waiting for a special piece of mail Wednesday — a $2.4 million check.
StoneBridge was one of the last major, publicly used properties in the Shreveport-Bossier City area to lease its mineral rights at the end of the year; it did so in October. While the golf course owners, the Municipal Police Employees' Retirement System, a statewide pension fund, are still deciding how to use the money, one thing local golfers might see is improvements to the course.
MPERS signed its mineral lease in October with Twin Cities Development LLC, a broker for the Chesapeake Energy Corp., for the $2.4 million bonus plus 25 percent of future royalties. The golf course is about 162 acres, so the leasing bonus alone works out to a little less than $15,000 per acre.
Complete story in The Times

Haynesville Shale Expo successful

Large numbers of people turned out for the Haynesville Shale Expo yesterday. The Expo was presented by The Times and energy companies Chesapeake, Devon, EnCana, Petrohawk and XTO.
The Expo was expected to turn out 5,000 people. So far, no word on how many actually attended.

From KTBS, a video on how the Haynesville Shale has affected northwest Louisiana

Haynesville Shale: Fox volunteers to guard the henhouse

The Louisiana Oil & Gas Association has announced its Haynesville Shale Educational Center. This could be a good source for general information, but if you are seeking information on leasing, I would suggest avoiding this website like the plague. LOGA is strictly an industry organization and will hardly have your best interests at heart.
The mission of LOGA is “to provide our industry with a working environment that will enhance the industry.” There is nothing wrong with that, but just be aware of who they are.
Among the members of LOGA are:
EnCana Oil & Gas (USA) Inc., Chesapeake Energy Corporation, Devon Energy Corporation, Petrohawk Energy Corporation, Plains Exploration & Production Company, Samson, XTO

Members of the Board of Directors:
Don G. Briggs, LOGA President
Don is a native of Miami, Florida and a 1964 graduate of the University of Southwestern Louisiana (now University of Louisiana at Lafayette). Don began his career in the oil industry with Owen Drilling Company, while attending USL.

CeCe Richter, Assistant to the President
CeCe started her career in the oil and gas industry in 1975 with Texaco in New Orleans; progressing through the administrative ranks to end her 20 year career at Texaco in 1995 as Assistant to the Vice President.

Benjamin Fournet Broussard, Marketing Manager
Ben is a native of Lafayette, Louisiana and is a 2002 graduate of Louisiana State University. Before joining with LOGA in 2006, Ben spent four years with the Enterprise Leasing Company of New Orleans.

Gifford Briggs, Legislative Director
Gifford serves as the Legislative Director for the Louisiana Oil and Gas Association. Gifford’s involvement started at an early age working for his father in the pipe yards of Lafayette Louisiana.

Haynesville Shale: Obama pushes natural gas vehicles

The Obama administration may be a shot in the arm for Haynesville Shale producers and for The Pickens Plan. Congressman Rahm Emanuel of Illinois worked with Democrat Dan Boren of Oklahoma on a bill to help increase domestic production. Barack Obama introduced a very similar bill in the Senate.
Emanuel, who was a senior advisor to Bill Clinton, has been selected by Obama to serve as his Chief of Staff.

October 14, 2008 press release:
On September 16, 2008, the U.S. House of Representatives passed the Comprehensive American Energy Security & Consumer Protection Act (H.R. 6899) to help increase domestic production, ensure a clean renewable energy future for generations, create new green-collar jobs, and help consumers struggling with high energy costs. Key provisions from U.S. Representatives Rahm Emanuel (D-IL) and Dan Boren’s (D-OK) New Alternative Transportation to Give Americans Solutions (NAT GAS) Act were included in the bill, including tax incentives to build the refueling infrastructure for natural gas vehicles.

On September 22, 2008 Barack Obama proposed a similar bill in the Senate:
Democrat candidate and Illinois Senator, Barack Obama, still found time last week to introduce legislation (S.3506) that would increase the tax credit for individuals that purchase natural gas vehicles and extend the credit through to the end of 2017. The Senator proposes increasing the incremental price eligible for a credit from 50/80 percent to 100 percent for all weight classes of vehicle, and a doubling of the tax credit for fleets that purchase more than 100 NGVs in a year. This last provision is identical to one proposed by Rep. Rahm Emanuel (D-IL) in the Congressman’s NAT GAS Act (HR 6570). In addition, the Senator proposed increasing the amount the EPA can pay for alt fuel school bus from 25 and 50 percent to 50 and 75 percent (depending on the vehicle’s emissions), and reauthorizing the Clean School Bus Program at $110 million per year from 2010 through 2015. The program is currently authorized to be funded at “such sums as are necessary” until 2010.

Over 1,000 at Haynesville Shale Job Fair

Hundreds of people stood in line Wednesday at the Bossier City Convention Center waiting for a chance to strut their stuff for companies like Chesapeake Energy, Parker Drilling and Trinidad Drilling.
The crowds gathered there for the oil and gas job fair connected with the Haynesville Shale natural gas deposit. More than a thousand people attended the job fair, event organizers said.
The line was so long at Chesapeake's booth that it started to snake around the room. Chesapeake is the largest natural gas drilling company in the country. The company has the largest presence in the Haynesville Shale with 14 rigs.
"It's been like this since 10 a.m.," said Sarie Joubert, public affairs manager for Chesapeake. "It's been nonstop. The line has stayed exactly the same."
Joubert said people were looking for jobs of all types — roustabouts, tool pushers, supervisors and truck drivers. People were dropping off resumes and business cards as well as filling out applications.
The Times

Haynesville Shale: 'Pigs get fat, hogs get slaughtered'

For those of you who missed it, KSLA Channel 12 ran stories last night and tonight about leasing in the Haynesville Shale. In this video Eric Clarke played portions of a recently recorded conversation between some Haughton residents and leasing agents with Baton Rouge-based agency Mark A. O'Neil, which represents Chesapeake Energy in negotiations for natural gas trapped two miles underground and locked inside rock known as shale.
It is revealing of some of the tactics used in negotiations.

Successful Haynesville Shale well just south of Benton

Southern Star Energy, a fast-growing E&P company with reserves and production from leases located in northern Louisiana, today announced that it has successfully drilled and logged the targeted Haynesville interval in its Atkins-Lincoln 17-2 Well with positive results. The well reached a total depth of 11,300 feet on October 14, 2008. This well is strategically located in the center section of the Company's Sentell Field in Bossier Parish, Louisiana. The Atkins-Lincoln 17-2 is the second well in the Company's 2008 development program and the first of two Haynesville Shale vertical test wells in the Sentell Field planned for 2008.
Wireline logging and mud log shows indicate the Atkins-Lincoln 17-2 Well encountered 205 feet of highly laminated, silty, and naturally fractured shale zone with cross plot porosities ranging from nine to 12 percent. Mud logs indicated abundant gas shows throughout the interval, ranging from 400 to 600 units with trip gas as high as 3,000 units. This interval exhibits the characteristics of the Lower Bossier Shale. Immediately below this laminated section, the well encountered approximately 185 feet of quality dark black organic rich shale. In this zone, gas shows ranged between 1,100 and 3,000 units. This lower interval exhibits all of the characteristics that the industry classifies as the Haynesville Shale. The wellbore is suspended with 7-inch intermediate casing through the Cotton Valley Formation at 9,500 feet in order to preserve the Company's options to complete the well as a vertical producer, or to re-enter the wellbore for horizontal drilling pending the development of completion techniques.

Complete story at News Blaze

KSLA reports Fortress/Chesapeake leases null and void

excerpt:
It now appears the gold rush mentality has crashed into the Haynesville Bust, at least for the 100 or so property owners told Thursday night (10/16) that their signed leases are worthless.
Those property owners had no idea what to expect for a hastily called meeting at a Keithville church. Once there, their lease negotiators delivered the bad news, that their 20-thousand dollar an acre lease contracts are 'null and void,' which led to anger.

Video

Chesapeake to cut back on leasing, drilling

excerpt:
Chesapeake Energy Corp cut its cash outlook for the next two years and said it will further reduce spending in response to the global financial crisis and lower natural gas prices, a regulatory filing on Wednesday showed.
Chesapeake has cut its budget for the acquisition of new acreage in 2009 and 2010 and has trimmed the amount it plans to spend on drilling, according to a filing with the U.S. Securities and Exchange commission.
The highly leveraged U.S. company had planned to spend as much as $2.3 billion acquiring drilling rights next year.
This is the third time since Sept. 22 that Chesapeake has adjusted its financial forecasts and announced plans to cut capital spending.
Energy companies like Chesapeake that have outspent cashflow and relied on capital markets to finance acreage acquisitions and drilling programs have been hit hard by the credit crunch as sources of financing are harder to find an more expensive.
A 50 percent drop in natural gas futures from July highs has not helped the outlook for U.S. onshore exploration and production companies, some of which ramped up drilling plans to capitalize on high commodity prices.
Chesapeake said it now expects total cash inflows of about $7.8 billion to $9 billion in 2009, down from its prior forecast for about $9.9 billion to $11.5 billion, the SEC filing said.For 2010, the company is forecasting cash inflow of $8.2 billion to $9.5 billion, down from $9.2 billion to $10.8 billion.
From The Guardian

The Haynesville Shale: Chesapeake in trouble

THE BAD NEWS
Chesapeake Energy, the big player in the Haynesville Shale, is in trouble. The Wall Street Journal reported today that
"Chesapeake Energy Corp. is scrambling to sell assets and cut costs as falling energy prices and tightening credit threaten to derail the company's dramatic growth.
The Oklahoma City company has spent aggressively and borrowed heavily to fuel its climb this year to become the largest U.S. natural-gas producer. Its efforts were supported by natural-gas prices that leaped to a high of $13.577 per million British thermal units in July before fears of a supply glut sent prices plunging. Natural gas settled at $6.825 Thursday on the New York Mercantile Exchange."

Chesapeake issued a news release today announcing that Aubrey McClendon had to sell virtually all of this Chesapeake stock. The stock has fallen from almost $70 this summer to close at just under $17 today.
Chesapeake Energy Corporation (NYSE:CHK) today disclosed that its Chief Executive Officer, Aubrey K. McClendon, involuntarily sold substantially all of his shares of Chesapeake common stock over the past three days in order to meet margin loan calls.
Mr. McClendon commented, "I am very disappointed to have been required to sell substantially all of my shares of Chesapeake. These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the worldwide financial crisis. In no way do these sales reflect my view of the company's financial position or my view of Chesapeake's future performance potential. I have been the company's largest individual shareholder for the past three years and frequently purchased additional shares of stock on margin as an expression of my complete confidence in the value of the company's strategy and assets. My confidence in Chesapeake remains undiminished, and I look forward to rebuilding my ownership position in the company in the months and years ahead."

Borrowing money to buy stock on margin loans can significantly increase your profit - and your losses. McClendon bought high and sold low, and in the process kissed hundreds of millions of dollars goodbye.

THE GOOD NEWS
Although leasing is coming to a screeching halt in Northwest Louisiana this week, the good news is that the thing that created all of this excitement is still intact. The gas is still below us and the demand for it can only increase.
Not as much drilling will take place in the near future as expected, and leasing will be non-existent for a while. A guess would be that by next summer both will pick up again. Will we ever see the large sign-on bonuses we saw this year?
Only time will tell.

Haynesville Shale: Big signing bonuses thing of the past?

Chesapeake Energy has announced that they are cutting back on their natural gas production so the market can catch up with the supply. This could mean a lull in leasing in Northwest Louisiana for a period of time, and some of the larger bonuses that have been paid in the 'sweet spots' may be a thing of the past.

Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "During the past ten years, Chesapeake has led the E&P industry in production growth, and through our efforts and those of other leading independent producers, there are now abundant supplies of natural gas in the U.S. market. In fact, we believe there is now sufficient domestic natural gas supply growth to satisfy a growing percentage of the U.S. transportation fuel market through the use of CNG-fueled vehicles.
However, until the market has sufficient incentives for service station owners to build out CNG infrastructure, for auto manufacturers to offer new CNG vehicles in large quantities and for consumers to install home refueling devices, retrofit existing vehicles and purchase new CNG vehicles, insufficient natural gas demand exists to prevent periodic declines in wellhead natural gas prices below the industry's breakeven profitability levels.
"Therefore, we believe it is in the best interests of Chesapeake's shareholders to temporarily curtail a portion of our natural gas production, reduce the company's drilling capex and lower our production growth to provide time for rising natural gas demand to catch up with increasing natural gas supply. We have made these decisions even though Chesapeake is well hedged, has one of the lowest cost structures in the large-cap E&P industry and has a substantial portion of its capex budget during the next few years carried by other companies. We will monitor market conditions and bring curtailed natural gas production volumes back on stream as prices improve. We remain confident that natural gas is the single best solution to meeting America's energy, transportation and environmental challenges in the years ahead and we will continue our industry-leading efforts to increase both supply and demand for clean, affordable and abundant American natural gas.

Read the complete news release from Chesapeake