Saturday, August 30, 2008

Haynesville Shale - Petrohawk ( HK ) mentioned 8/29/08

A Morgan Keegan analyst resumed coverage on Petrohawk ( HK ) with a rating of Outperform.....$55-$60 price target.

This analyst cited that most of Petrohawk value is in unbooked natural gas drilling potential of the Haynesville Shale formation which is located in Louisiana and East Texas.

Petrohawk has around 300,000 acres in the Haynesville Shale field.

Friday, August 29, 2008

Sarah Palin VP for McCain? - Palin Approved Alaska Pipeline

The rumors are flying this morning on the Vice President candidate for John McCain. There is a strong buzz out there that Sarah Palin was picked for VP.

Sarah Palin looks like an excellent choice for him. She is the Alaska Governor who is very hard working and is in strong favor of drilling for Oil & Gas in ANWAR and the Green River Basin.

Sarah Palin approved TransCanada corps 27 billion dollar pipeline which will transport natural gas from the North Slope Alaska to the USA.

Palin on Aug. 27 signed a bill authorizing the state to award Calgary-based TransCanada a license to build the 1,715- mile (2,744-kilometer) link from Prudhoe Bay to the Alberta Hub in Canada, according to a statement. The license will be granted in 90 days.

Wednesday, August 27, 2008

Hurricane Gustav Track - Update 8/27/08

Hurricane Gustav's Track took a slightly eastern turn this morning. Forecast models now have hurricane gustav hitting New Orleans Monday night. This is subject to change though, but most of the so called spaghetti models all have it hitting Louisiana on Monday. The question is, how bad will hurricane gustav be?

For all the lastest Hurricane Gustav maps and updates, click below

http://www.oilshalegas.com/hurricanegustav.html

Hurricane Gustav: NOAA Category 4+ Hurricane to Hit Louisiana Monday

NOAA has just released news that Hurricane Gustav is on track to hit Louisiana Monday at a catagory 4 hurricane or higher. Check back for the latest updates on Hurricane Gustav.

http://www.oilshalegas.com/hurricanegustav.html

Tuesday, August 26, 2008

Hurricane Gustav - Projected Path of Hurrican Gustav

All eyes are on Hurricane Gustav as it spins just south of Haiti. Forecasters have come out today and stated a strong case for this hurricane to enter the Gulf of Mexico by the weekend. They also say that Hurricane Gustav could strengthen to a category 4 hurricane by the time it enters the gulf.

Keep track of the latest news on Gustav

http://www.oilshalegas.com/hurricanegustav.html

Haynesville Shale Meetings: Mineral Rights

Tonight there is a Haynesville Shale meeting. The Broadmoor Neighborhood Association meets at 7 p.m. tonight. It will take place in the gym at Broadmoor Presbyterian Church, 1915 Grover Place. A presentation of oil and gas leasing as it affects homeowners will be featured.
Caddo Tax Assessor Charles Henington Jr. will have his staff and necessary forms available for citizens age 65 or older who wish to freeze their property taxes. Additionally, Mike VanSant, who is running for city marshal, and Chester T. Kelley, who is seeking the 4th Congressional District.

The Cypress Park Area Mineral Rights Group will meet at 7 p.m, Thursday in the Benton High School gym, 6136 state Highway 3, Benton. The meeting is for landowners regarding the Haynesville Shale. Go to www.cpa-mineralrightsgroups.com to learn more.

Monday, August 25, 2008

Tropical Storm Gustav - Hurricane Gustav

Tropical Storm Gustav has been brewing just below Cuba.....and could potentially hit Florida over the weekend or take a more westerly turn and enter the Gulf of Mexico. If Gustav enters the Gulf, it will turn into a powerful hurricane which will cause oil to spike.

Keep an eye on this closely!

http://www.weather.com/maps/geography/oceans/caribbeansatellite_large_animated.html

XTO Energy: Freestone County, Texas Drilling Report

XTO is set to drill in Freestone County, TX Texas.

XTO Energy will drill five wells. Teague (Cotton Valley-Bossier Consolidated) Field will see Irvin GU Well 13 and Dunlap GU 2 Well 10 drilled to 13,200 feet. Dunlap GU 2 Well 5 will be drilled to 13,300 feet. No. 13 will be in Jessup I Survey A-335, 2.9 miles east of Teague. No. 10 will be in Cabler FP Survey A-114, 2.2 miles southwest of Fairfield. No. 5 will be in same, 2.7 miles southwest of Fairfield. Freestone (Cotton Valley-Bossier Consolidated) Field will be site of J.A. Gilliam II Gas Unit Well No. 23 and Fails Gas Unit Well No. 22. No. 23 will hit 13,400 feet in Chavert JL Survey A-10, seven miles southwest of Teague. No. 22 will hit 13,500 feet in Rowe AW Survey A-885, 5.9 miles southwest of Teague.

Teague (Cotton Valley- Bossier Consolidated) Field will see Henderson Gas Unit Well 30 drilled by XTO Energy five miles southeast of Teague at 12,900 feet. It will be in Lawrence J Survey A-364.
XTO will drill Tony Miller GU 1 Well 1 to 11,300 feet in a Wildcat 4.3 miles northeast of Wortham in Sweet SA Survey A-37.

http://www.tylerpaper.com/article/20080825/BUSINESS03/207283

Haynesville Shale - Wilcox Aquifier could be affected

The feds' could soon get involved in keeping track of underground water levels affected by drilling in the Haynesville Shale.
Ben McGee with the U.S. Geological Survey met with Caddo officials Friday morning, including commissioners and Parish Administrator Woody Wilson.
The parish may ask the U.S.G.S. to do another study on the Wilcox Aquifer and the long-term effects that gas drilling could have on water levels.
"Bottom line is, it's not hard to stress the Wilcox Aquifer," said McGee, a supervisory hydrologist with the U.S.G.S., who used 2005 study figures in his discussion with parish leaders.

The Wilcox Aquifer accounts for 25-percent of the water supply for Caddo Parish, used primarily in rural, farming areas. Also in attendance, Gary Hanson, who is director of the Red River Watershed Management Institute and Professor of Geology at LSU-Shreveport. He described the Wilcox Aquifer as slow to re-charge (re-fill). Its saving grace, compared to a 'confined' aquifer, is the fact it is a 'surface water re-charge aquifer,' replenished largely by rain water over a large surface area.

Full Article Here

Sunday, August 24, 2008

USA Shale Plays - Canada Natural Gas Fields

Below is a link to all the major shale gas fields in the United States and Canada. The Haynesville Shale has most of the shale buzz, but Horn River Shale could be just as large one day!


http://www.haynesvilleshales.com/shalefields.html

Also check out:

www.bakkenshale.net
www.marcellusshales.com
www.oilshalegas.com

Thursday, August 21, 2008

Haynesville Shale Mineral Rights: Louisiana Attorney General warns of mineral rights scam

Louisiana Attorney General James "Buddy" Caldwell is warning landowners of a scheme aimed at stealing their mineral rights.

The scam emerged amid increasing demand for drilling leases in the Haynesville Shale, a massive natural gas find made recently in northwest Louisiana and eastern Texas.

The attorney general's office said landowners should be cautious of letters in the mail that contain a check and ask them to sign documents and return them.

"If you are a mineral owner and receive a letter in the mail, with a check included, requesting that you sign a document that appears to be a mineral lease, you should be extremely cautious because you may be permanently signing away valuable mineral rights without realizing it," Caldwell said in a consumer alert.

The attorney general said the contract might contain general power of attorney provisos that would allow the holder to amend the contract even after it's signed to reflect that all mineral assets, even those already in production."

The attorney general encourages all property owners in Louisiana to seek legal advice before signing any documents relating to the sale or lease of mineral rights," the alert said.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.
http://www.legalnewsline.com/news/215014-louisiana-ag-warns-of-mineral-rights-scam

Haynesville Shale: ( CHK ) Chesapeake Energy - Bossier Parish

Bossier Parish Asks Questions About Shale!

The Bossier Police Jury got a chance to ask about the Haynesville Shale during its biweekly meeting Wednesday. Kevin McCotter, corporate development director for Chesapeake Energy Corp., stopped by for a brief question-and-answer session.

"Very soon, we'll see rigs in places you never thought possible," he told jurors after a presentation on Chesapeake Energy's activities in the area. The company soon will be even more active, "ramping up our operations so significantly in northwest Louisiana," he said.
Chesapeake Energy has about 550,000 acres of land under lease and about 10 rigs in the ground, McCotter said, adding the company expects 30 rigs in place in 2009 and 60 in 2010.
Chesapeake Energy representatives gave a brief PowerPoint presentation, showed a short video and even brought a basketball to illustrate how roughly one cubic foot of natural gas looks.
Jurors asked several questions, including where Chesapeake Energy will build its natural gas pipelines (several directions), how long it takes to drill down into the shale (about 50 days) and how effective the prototypes of natural gas-run cars could be (McCotter said he even is thinking about getting one).

The presentation was meant to be informative, and no formal action was taken. Bossier Parish's mineral rights will be put out to bid through the Louisiana Mineral Board in October.
The Police Jury took action on other matters Wednesday, including having a public hearing to consider adopting new Federal Emergency Management Agency flood maps for the parish and awarding bids for several small construction projects in the parish.

By Drew Pierson

http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20080821/NEWS01/808210332

Monday, August 18, 2008

Haynesville Shale - Forest Oil ( FST ) East Texas, Cotton Valley - 8/18/08

Forest Oil ( FST ) announced today that it has aquired acreage that is prospect to the Haynesville shale in East Texas.

Forest Oil announced today that it has entered into a definitive agreement with Cordillera Texas, L.P. to acquire producing assets including approximately 118,000 gross acres (85,000 net acres) in Forest’s core Greater Buffalo Wallow and East Texas/North Louisiana Focus Areas. Forest attributes estimated proved reserves of 350 Bcfe (36% proved developed) with additional net unrisked potential of 1,200 Bcfe and approximately 1,500 additional vertical and horizontal drilling locations (1,194 unbooked locations) to the properties. The properties produced an average of approximately 34 MMcfe/d in the first half of 2008 and are focused primarily in the Granite Wash, Atoka and Morrow intervals in the Greater Buffalo Wallow Area and in the Cotton Valley and Travis Peak intervals in East Texas. The acquired acreage in East Texas also has James Lime, Haynesville/Bossier Shale and Pettet rights.

Thursday, August 14, 2008

CNBC: Carl Icahn Buys Anadarko ( APC ) & Biogen ( BIIB )

CNBC is reporting that Carl Icahn increased his position in Biogen Idec ( BIIB ) and added to Anadarko Petroleum ( APC ). I'm pretty sure he also added Yahoo ( YHOO ).

Carl Icahn sold most of Time Warner holdings but has around 1.7 million shares left.

Anadarko Petroleum ( APC ) has 625,000 acres in the Marcellus Shale play as well as a position in the Haynesville shale in their East Texas area.

Haynesville Shale - Louisiana Lease Sale 2nd Highest Ever ( 93.8 million ) Caddo, Bossier, Bienville, De Soto Parish

Since the Louisiana Lease Board began keeping records back in 1969, there has only been one sale that was higher then the 93.8 million dollar sale yesterday 8-13-08. The Haynesville Shale is hot, that is all you can really say right now. The record? Year 1980 with a record 157.7 according to the LLB.

Companies have been flocking to the northwest Louisiana area in pursuit of mineral rights agreements so they may explore the Haynesville Shale for Natural Gas.

4,700 acres were sold in the following areas: Caddo, Bossier, Bienville, DeSoto and Red River.

Something tells me the Haynesville Shale is expanding rapidly. I even think the core area could be getting bigger. Heck, the CEO of Chesapeake Energy is on the record saying he believe one day down the road, the core zone area of the Haynesville shale could pay $50,000 per acre. Wow!

Marcellus Shale: Wyoming County, PA landowners sign - 8/14/08

A packed Tunkhannock Area High School auditorium buzzed on Wednesday evening with one topic: natural-gas lease profits.

The rush is on in western Wyoming County, with the Wyoming County Landowners’ Group and its more than 45,000 acres in the gas-filled Marcellus Shale region recently accepting a lease agreement with the Unit and Citrus oil and gas drilling companies.
Landowners signed for $2,850 per acre sign-on bonuses, minus consultant payments, for five-year leases with 17 percent drilling royalties. If the lands aren’t drilled within five years, there are two one-year extensions each for $1,000 per acre.
The deal was brokered by Jack Sordoni and Chris Robinson, both oil and gas drillers in western Pennsylvania. The terms of the lease provide them with 15 percent of the $590-per-acre sign-on bonus increase they brokered from the $2,260 per acre the land group initially negotiated.

http://www.timesleader.com/news/Wyoming_County_landowners_sign_brokered_gas-drilling_lease_deals_08-13-2008.html

Wednesday, August 13, 2008

Oil: Iran Urges OPEC to Cut Output if Demand Slows

OPEC should trim its oil output if demand continues to fall in slowing industrialized economies, Iran's OPEC governor Muhammad Ali Khatibi said on Tuesday.

OPEC boosted output for the third consecutive month in July as prices peaked at over $147 a barrel. Top oil exporter Saudi Arabia pumped at the fastest rate for 27 years to meet growing demand. But other OPEC members opposed the move, saying that the hike in prices had been the result of other factors than market fundamentals. Iran and other members of the oil cartel blamed high oil prices on geopolitical factors, sanctions, weak dollar and market speculation. The price has since slipped $34 as record prices at the pump and the slowing US economy crimp demand. "If oil demand continues to slow then OPEC should adjust its output accordingly," Khatibi told Reuters in an interview in his Tehran office

http://english.farsnews.com/newstext.php?nn=8705231027

Tuesday, August 12, 2008

Marcellus Shale will take 5 years to Fully Develop

The Marcellus Shale, which is located in PA, WV, OH, and NY, will take as long as five years to fully develop. The Marcellus Shale has a lot of potential, but infrastructure issues, water problems will cause a slow down in drilling activity.

I believe the recent fall of natural gas prices was due to wall street thinking that all these shale plays such as the Marcellus Shale, Haynesville shale, and Fayetteville Shale will bring a huge supply of natural gas to the market. This is not really the case. As older wells decrease in production, these new wells replace existing supply. If natural gas prices keep falling, there will be less drilling causing supply to weaken instead of build. The price of natural gas will make the market as usual....if demand is strong, the price will rise bringing on more supply...and vice versa.

To learn more about the companies drilling at the Marcellus Shale, go to http://www.marcellusshales.com/marcellusshalecompanies.html

Chesapeake Energy ( CHK ) completes Woodford Shale sale ( BP )

This morning Chesapeake Energy ( CHK ) is out saying they have completed their asset sale in the Woodford Shale. CHK received 1.7 Billion dollars in cash from Beyond Petroleum ( BP )

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are pleased to announce the completion of the sale of our Arkoma Woodford properties to BP. This transaction was an important aspect of our ongoing asset monetization program and enables Chesapeake to redeploy capital to our Haynesville, Barnett and Marcellus Shale plays and further improves the company’s capital structure.
“We now turn our focus to negotiating joint venture arrangements in the Fayetteville and Marcellus Shale plays. We anticipate selling 25% of our interest in those two plays using a “PXP-style” transaction in which we receive partial consideration in cash at closing and then receive a tax-efficient carry of development costs over time as wells are drilled. There is strong industry interest in both plays and also in our preferred deal structure. Accordingly, we hope to announce transaction details by the end of the third quarter.”

Friday, August 8, 2008

T. Boone Pickens - CNBC 8/08/08 Natural Gas - Oil

This morning Boone Pickens was on CNBC talking about www.pickenplan.com his website for reducing our dependency on foreign oil.

T. Boone Pickens has been saying he wants to convince congress that we should switch to Natural Gas as transportation fuel like Gazprom is doing in Europe. Iran is actually switching over to Natural Gas fuel while exporting Oil. Boone Pickens says now is the time....and we need to get this underway soon so in five years we can rely on Natural Gas rather then oil for transportation fuel. ( If you are not aware, Oil is used to produce Gasoline that runs your cars )
This would bode well for the Haynesville shale and the Companies that are drilling this shale


Boone Pickens Oil Prediction - $4 gasoline is to much...demand destruction has come....its going on all over the world especially Europe. Gasoline goes back to $3.50, and then the trend starts back higher again. ( The same thing for Oil )

Boone Pickens is still long Oil through options....he still thinks we can go lower but eventually we will move back higher in oil prices.

Thursday, August 7, 2008

Oil prices going Higher - Natural Gas prices 8/07/08

Oil is up almost $3 this morning to $121.35.....as I expected, the flush under $120 was short lived. People have been preaching under $100 oil for the last few days...and this is the second significant bounce we've gotten since Oil has gone under $130 in the past few weeks.

To me Oil seems like it is putting in a bottom here. People are kidding themselves thinking oil will go to $85. Yes, at $148 we have seen demand destruction but there is still a lot of demand and that is only going to get worse in the coming years.

People that are having a hard time with Oil prices going up should be putting money into the United States Oil Fund ( USO ) so at least when you are getting killed at the pump you are making money back as a hedge. This stock can be bought be anyone!

I personally think we will see $150-$160 oil in the next 6 months as winter approaches.

Natural Gas has gotten killed over the past month....from $14 down below $9...and that to is really to bounce back. Today it is around $9. I have bought stocks like Chesapeake Energy ( CHK ) and XTO Energy ( XTO ) They are huge operators in the shale plays around the United States. The Haynesville Shale has been huge and will continue to get even bigger. If Natural gas prices stay around $9-$10 this quarter, Chesapeake will make about $2 billion dollars this quarter on hedging activity since they lost 2 billion last quarter when Nat Gas was higher. This alone would give CHK stock a pop. Remember this when they report earnings in three months!

Wednesday, August 6, 2008

Barnett Shale - Chesapeake ( CHK ) record mineral rights lease

Chesapeake Energy CHK is working on a 650 acre lease on Lake Worth and Fort Worth properties located in the Barnett Shale. If this mineral rights lease deal gets done, it will be a record! Rumor has is Chesapeake is ready to pay out a $30,000 per acre signing bouns as well.

About 1,200 property owners in Boat Club Estates, Highland Lake Estates, Jinkens Heights, Crestview, Crestridge, Triangle Estates and Lakeview Estates are involved in the lease. The land is roughly bounded by Lake Worth to the west, Azle Avenue to the south, Boat Club Road to the east and Basswood Court to the north.

XTO appears to have been one of the bidders pushing this deal to a record.

Full Article Here

Tuesday, August 5, 2008

Haynesville Shale - PetroHawk ( HK ) signs deal

This morning we have news out of PetroHawk Energy ( HK ) and Mainland Resources ( MNLU ) regarding the Haynesville Shale. These two companies will be apart of a joint venture in the Louisiana Shale deposit known as the Haynesville Shale.

Mainland Resources, Inc. holds interest in approximately 2,695 net acres which form part of the East Holly Field in De Soto Parish, northwest Louisiana.
Under the terms of the Definitive Agreement, Petrohawk agrees to pay 100% of the costs of development associated with the first well drilled below the Cotton Valley Formation, including drilling, completing and fracture stimulating, as well as costs up to and including pipeline connection. Petrohawk also agrees to pay 80% of all costs of the second well drilled on the Leases below the base of the Cotton Valley and Mainland agrees to pay 20% of the costs. For the third, and all subsequent wells drilled on the Leases below the base of the Cotton Valley Formation, Petrohawk will pay 60% and Mainland will pay 40%.
Mainland will immediately transfer 60% of its De Soto Parish leases to Petrohawk, but only as the Leases relate to all depths below the base of the Cotton Valley Formation, and specifically the Haynesville Shale. Mainland retains rights to all Cotton Valley and Hosston formation production on these Leases. Petrohawk agrees to gather and market Mainland's production from above the base of the Cotton Valley Formation, pursuant to a mutually acceptable agreement.

Full Article - http://biz.yahoo.com/prnews/080805/latu059.html?.v=101

GMX Resources ( GMXR ) Haynesville Shale Update

GMXR came out with earnings last night.....here are the following Haynesville Shale highlights:

The second quarter of 2008 has marked records in production, revenue, earnings and cash flow for the Company and positions us to continue to accelerate our successful drilling program, add meaningful operated acreage in the ArkLaTex region and deliver shareholder value,'' commented Ken Kenworthy, Jr. Chairman, President and Chief Executive Officer.

``Acceleration of the Haynesville/Bossier development, funded by our growing cash flow and credit line is expected to increase the present value of our 1P & 2P reserves. We have grown our operated acreage over 130% in 2008 through July 31, 2008, including the addition of 7,300 net operated acres in Q2 and an additional 10,955 in Q3. We now operate 81% of our gas shale development and expect to add additional operated acreage in the remainder of 2008. As of July 30, 2008, the Company has 43,032 net operated acres including 38,455 acres of Haynesville/Bossier shale giving us the most Haynesville shale acres per share as compared to all other public companies. The GMXR team continues to focus on the successful development of our asset base and executing our strategy of investing in profitable growth,'' Kenworthy added.
Production for the quarter ending June 30, 2008 averaged 35.7 MMcfe per day for a total of 3.25 Bcfe. This marks the 17th consecutive quarter of production growth.

For the quarter ending June 30, 2008 GMXR drilled a total of 30 gross/19.2 net Cotton Valley and Travis Peak vertical wells. Capital expenditures for the quarter were $70.1 million. Drilling activity is expected to increase this year as the Company brings two additional third party leased rigs on-line in the second half of 2008. This will increase rigs drilling on the Company's operated acreage to six and total rig count on the property base to ten. The Company intends to drill Haynesville/Bossier horizontal shale wells with four of its six rigs beginning in the third quarter and Cotton Valley vertical wells with the remaining two. The Company expects to drill in our 100% owned acreage 4-6 gross and net Haynesville/Bossier horizontal wells in the second half of 2008. We also expect GMXR's joint development partner, Penn Virginia Oil and Gas, L.P. (``PVOG'') to drill 2 gross/.8 net Haynesville/Bossier horizontal wells in jointly owned acreage in the second half of 2008. This shift in drilling focus to Haynesville/Bossier versus Cotton Valley wells and the extended drilling time for horizontal wells will bring our planned wells to a range of 68.3 to 78.8 net wells for 2008. In 2006, GMXR and PVOG drilled and completed 19 vertical test wells across its acreage completing the Haynesville/Bossier Shale in most of the wells. These tests confirmed the presence of significant amounts of natural gas with 24 hour IP rates between 1 and 2 Mmcfe/d.

Visit http://oilshalegas.com for all the shale plays and companies drilling there!

Monday, August 4, 2008

Montney Shale - British Columbia Natural Gas Field

The Montney Shale is attracting bids for land by large companies. Located just below the Horn River Shale in British Columbia....energy giants such as Encana are scopping up land like we are running out of natural gas.

A record 610 million dollars of land leases were made at an auction in July.

Stay tuned to see how much the August auction raises! If you thought the Haynesville Shale was hot....Canada has their own shale plays!

Sunday, August 3, 2008

Huron Shale - Companies Drilling in Shale

The Huron Shale is located in Ohio, West Virginia, and Kentucky. Companies have been drilling in this area and finding quite a bit of natural gas. Here is a list of companies currently exploring the Lower Huron Shale. http://www.oilshalegas.com/huronshale.html

Saturday, August 2, 2008

Haynesville Shale Extending - East Texas Drilling

The Haynesville Shale is starting to be tested in other counties in East Texas. Southwestern Energy ( SWN ), a newcomer to the Haynesville Shale, will be testing Shelby and San Augustine Counties of Texas in the coming months and 2009.

For those who do not know about Southwestern Energy....these guys were the very first in the Fayetteville Shale in Arkansas. SWN is producing 500 million cubic feet per day in the Fayetteville Shale play.

This is the first i've heard this part of Texas being looked at for the Haynesville shale......keep an eye on this!

Friday, August 1, 2008

Chseapeake CHK vs XTO Energy Haynesville Shale

Who would have thought their would be drama in shale plays? A few weeks ago, the XTO Energy CEO on the Conference Call said people who are saying that the Haynesville Shale holds 250 trillion cubic feet of natural gas are hyping this shale play.

Today the Chesapeake CEO gave research data to back this figure up and they stick to what they think is over 240 trillion cubic feet of natural gas in the Haynesville Shale. The CEO says he is not hyping this shale play, rather is going by research.

Chesapeake says the core area in the Haynesville Shale could eventually see up to 50,000 per acre.

Chesapeake Energy says they are producing 45 million cubic feet per day of natural gas from 11 wells.....

Chesapeake (CHK ) Haynesville Shale Update

Chesapeake has released their earnings and details about their haynesville shale position.

Chesapeake continues to experience outstanding drilling results in its recent significant Haynesville Shale discovery in Northwest Louisiana and East Texas. Based on its geoscientific, petrophysical and engineering research during the past two years, including analysis of more than 100 wells drilled through the formation by others in the industry, as well as the results of 11 horizontal wells Chesapeake has completed to date, the company believes the Haynesville Shale play will become the largest discovery of natural gas in the U.S. Chesapeake is currently producing approximately 35 mmcfe net per day (45 mmcfe gross) from the play and anticipates reaching at least 75 mmcfe net per day by year-end 2008. Chesapeake is currently using eight operated rigs to further develop its 450,000 net acres of Haynesville Shale leasehold and anticipates operating at least 12 rigs by year-end 2008. The company continues to acquire leasehold in the play with its 20% partner, Plains Exploration & Production Company (PXP).