Tuesday, September 30, 2008

Fayetteville Shale : Arkansas Public Expo Saturday 10/04

The Fayetteville Shale Expo will be 8 a.m. to 4 p.m. Saturday at the Conway Sports Center in the Don Owen Recreation Complex on Lower Ridge Road. The event is free and open to the public.

Full Article - http://www.thecabin.net/stories/093008/loc_0930080002.shtml

More info on the Fayetteville Shale - http://www.oilshalegas.com/fayettevilleshale.html

Chesapeake Energy ( CHK ) Technical Analysis

Today, we posted a Technical Analysis stock chart of Chesapeake Energy ( CHK ) on one of our websites... www.blackberrystocks.com

You can find CHK technical analysis here ----> http://blackberrystocks.com/chk.html

Saturday, September 27, 2008

Haynesville Shale - Jim Cramer on CHK Chespeake Energy and Natural Gas

Jim Cramer said on the " Stop Trading " segment of CNBC last week that Chesapeake Energy's ( CHK ) decision to cut drilling by 17% would likely be a bottom for natural gas. Cramer also said several months ago Natural Gas was going to bottom at $8 and we hit $6.50. Cramer also said the stock market bottom was at 10,850 ( the July 15th Lows ) and we have since broken through that.

I'm not sure where Chesapeake Energy will cut drilling....will it be the Haynesville Shale, Marcellus Shale, or Fayetteville Shale? Or a combination of them all.....but Natural Gas does appear to be bottoming lately...many weeks after Cramer tried to call a bottom.

Once the stock market stabilizes and stops tanking every week, Oil and Natural gas will start to move back up higher. The problem is, so many hedge funds that own energy stocks are under water and are forced to liquidate these positions due to the redemption's or what have you.

I can tell you though, once the Dow, NASDAQ, S&P stabilize, these commodities will soar back up....especially in the beg of 2009.

Whether Jim Cramer will be right or not on CHK, we will find out soon. He has been dead wrong recently though on many bold calls. He needs to stop trying to catch falling knives and wait for a confirmation bottom to both the markets and energy prices. The problem is, he trys to call these bottoms but you will never hear him tell you he was wrong. He only tells you when he is right! Yikes!

Friday, September 26, 2008

Marcellus Shale - COG - Chief Oil and Gas Operational Update 9/26/08

Chief Oil & Gas ( COG ) unveiled a new drilling rig in the Marcellus Shale this week.

From the Dallas Business Journal

Chief Oil & Gas has unveiled the new AC QuickSilver drilling system, which was developed by IDM Group and is operated by Union Drilling Inc. to drill in the rugged terrain of the Marcellus Shale.

The Marcellus Shale, a natural gas deposit that covers about 54,000 square miles through parts of New York, Pennsylvania, Ohio and West Virginia, is known for having untapped natural gas reserves located in rugged terrain that has traditionally been difficult for companies to drill through in a timely fashion.

The AC QuickSilver drilling system, which Dallas-based Chief Oil & Gas has a three-year contract for, is defined by its ability to “rig down, then rig up on a new location within 100 miles, in less than 48 hours,” Chief Oil & Gas said Thursday.


Wednesday, September 24, 2008

Barnett Shale - RAME Ram Energy Resources Operational Update

Today, RAME provided an update on their Barnett Shale wells:

Continued Progress in Barnett Shale Play of North Texas

Seven wells have been drilled year-to-date in RAM's North Texas Barnett Shale play, where the company has joint operating agreements with EOG Resources (NYSE: EOG) and Devon Energy (NYSE: DVN). Three wells were spud in the Barnett Shale play during the first quarter. Two of these three wells, the Etta Burress 3H and Molloy A1-H began producing late in the second quarter with combined gross initial daily production rates of 5,166 Mcfe (1,860 Mcfe net) and are making a full quarter's contribution to the third quarter production. Four additional horizontal wells, the TL Dickenson A-2H, A-3H, A-4H and A-5H began producing at a combined gross daily rate of 8,582 Mcf in August, partially impacting the third quarter and contributing fully to the fourth quarter. The company is continuing completion operations on its Brown 2H well and has proposed another well, the Reddell #2-H, to its joint interest participants. The Reddell # 2-H well, which RAM expects to spud in the fourth quarter, is planned as a horizontal well in Wise County, Texas targeting the Barnett Shale formation at a depth of approximately 6,800 feet with a 2,200 foot lateral.



Haynesville Shale - Chespeake Energy ( CHK ) Completes Three New Wells Avg 10MCF/D

The Haynesville Shale is still alive and well! I was getting worried it vanished since we haven't heard much news lately. This most likely has to do with the recent collapse of natural gas prices.

Chesapeake ( CHK ) Completes Three New Haynesville Shale Wells in September with Average per Well Initial Production Rates Exceeding 10 MMcfe per Day.

“Finally, I am also pleased to announce that Chesapeake completed three new horizontal Haynesville Shale wells in September with average initial production rates exceeding 10 mmcfe per day on restricted chokes with high flowing casing pressure. We look forward to initial production commencing from our first PXP joint venture Haynesville Shale well in October and will provide a full update on the Haynesville Shale and other important plays at our Investor and Analyst Meeting in Oklahoma City on October 15 and 16, 2008. This meeting will be webcast so that all investors will be able to learn more about our operations and prospects for future growth.”


Bakken Shale - CLR Continental Resources Update - Three Forks - Williams County, Divide County

This morning, Continental Resources ( CLR ), the biggest operator in North Dakota's Bakken Shale is out with an operational update and news on their Bakken Shale progress:

Continental Resources, Inc. (CLR) today announced initial production results for four wells that it recently completed in the northern portion of its North Dakota Bakken acreage, including its fifth well targeting the Three Forks/Sanish (TFS) formation.

The Omar 1-1H (41% WI) in Williams Co. flowed at an average rate of 1,126 barrels of crude oil equivalent per day (boepd) from the TFS formation during its seven-day production period test. The Omar 1-1H was drilled as a single lateral on 1,280-acre spacing.

Also in the northern portion of Continental's North Dakota acreage, the Company completed three wells targeting the Middle Bakken zone. The Company completed the Bliss 1-16H (54% WI) in Divide Co., the Skar 1-21H (54% WI) in Divide Co., and the Overlee 1-30H (54% WI) in Burke Co. for average rates of 476, 394 and 198 boepd respectively in their seven-day production period tests. The three wells were completed as single laterals on 1,280-acre spacing.
Continental is operating 10 rigs in the North Dakota Bakken play at this time, with six of those targeting the Three Forks/Sanish formation, which typically lies 50-to-125 feet below the Middle Bakken zone across the Company's North Dakota acreage.

"These four new completions further validate the productive potential of the northern part of our Bakken acreage," said Harold Hamm, Chairman and Chief Executive Officer. "We are in the process of completing three more TFS wells in this area at this time. Data from these will add to our understanding of the TFS potential in Burke, Divide and Williams counties."

Continental Resources is a crude-oil concentrated, independent oil and natural gas exploration and production company with operations in the Rocky Mountain, Mid-Continent and Gulf Coast regions of the United States. The Company focuses its operations in large new and developing resource plays where horizontal drilling, advanced fracture stimulation and enhanced recovery technologies provide the means to economically develop and produce oil and natural gas reserves from unconventional formations.

CLR is also active in the Haynesville Shale in Louisiana.

Tuesday, September 23, 2008

Woodford Shale - EPM Evolution Petroleum Gives Update 9/23/08

EPM Evolution Petroleum is out with their latest Woodford Shale Update below. You've probably noticed but my blog has been semi quiet. Ever since the fall of natural gas prices from $14 to $7....news on these shale plays such as the Haynesville Shale, Marcellus Shale, Fayetteville Shale has fallen off a cliff. The natural gas gold rush has subsided for now, but it will be back. Now is the time to buy stocks like Chesapeake Energy ( CHK ) and Encana ( ECA ).

"As previously announced, our 2009 capital budget includes initialdrilling in our Woodford Shale projects in Oklahoma and initial drilling in anew project in Texas, both expected to occur late in the fiscal year," addedHerlin. "The 2009 capital budget also provides for up to $3 million in newleasing in the Giddings Field, our Oklahoma gas shale projects and our newTexas project. We have now acquired leases on more than 17,600 net acres inOklahoma and are very encouraged by the drilling results of operators alsodeveloping the shallow and mid-depth Woodford Shale near our leases."

Saturday, September 20, 2008

Haynesville Shale - Scams Present 9/20/08

Louisiana's attorney general says his office has received about 200 complaints and inquiries about possible mineral leasing scams involving the Haynesville Shale - a geological formation that lies in parts of Texas, Oklahoma and Louisiana that is believed to hold huge amounts of natural gas.



Wednesday, September 17, 2008

Haynesville Shale Expo - Novermber 21st - 11/21 - Shreveport Convention Center

There will be a Haynesville Shale Expo located at the Shreveport Convention Center on 11/21/08. This Expo will educate the public on the impact of the natural gas industry and how it benefits people living in the Haynesville Shale area.

The free Expo is being presented by Chesapeake Energy, Devon Energy, EnCana Energy, Petrohawk Energy and XTO Energy and the Times. The chambers of commerce within the shale area will be hosts for the event, which is expected to attract thousands from northwest Louisiana and East Texas.

Full Article Here

Friday, September 12, 2008

Haynesville Shale - CHK Chesapeake Energy drilling Update

Just wanted to do a little update on Chesapeake Energy ( CHK ) and where they stand regarding the Haynesville Shale.

As of August 1st, 2008, CHK had 440,000 Haynesville Shale acres from Mineral Leases. Chesapeake Energy had 550,000 acres but sold a 20% stake to PXP Plains Exploration.

Chesapeake is on pace to operate 12 rigs by 2008, 30 rigs by 2009, and up to 60 rigs by the end of 2010. So big growth is expected here!

CHK feels that one day acreage in the Haynesville Shale will be worth $50,000 per acre.

At $42 per share for CHK at this moment, you are basically getting the best Natural Gas shale play ever ( This in my opinion will be the case several years from now ) for FREE

Marcellus Shale - Water Issues getting Solved 9/12/08

Six companies exploring for natural gas in the Marcellus Shale received approval Thursday to draw 30 million gallons of water per day from the Susquehanna River Basin.

Thursday’s approvals increased the amount of water gas companies can remove from the basin to more than 41 million gallons daily, or enough water to fill nearly 70 Olympic-size swimming pools every day. Two other companies were previously authorized to draw 11 million gallons daily.

The agency that regulates water withdrawals from the basin, the Susquehanna River Basin Commission, approved the applications at a meeting at Bucknell University

Full Article Here

Thursday, September 11, 2008

Petrobras Brazil Tupi Santos Basin Oil Field Update

If you didn't know this already, Brazil could be sitting on the worlds largest oil field just off the Brazilian Coast called the Tupi Oil Field - Santos Basin. Below is an update on Petrobras ( PBR ) on the Tupi Field.

Petrobras announces that the consortium formed by the Company (operator, 65%), BG Group (25%) and Galp Energia (10%), to explore block BM-S-11, in ultradeep Santos Basin waters, completed the drilling of well 1-BRSA¬618-RJS (1-RJS-656) and proved the relevant discovery of light oil in the pre-salt reservoirs. The recoverable volume is estimated at 3 to 4 billion barrels of light oil and natural gas in that area.

When the light oil discovery made in Iara, on August 7 2008, was announced, the well was still being drilled in search of deeper objectives. These objectives were reached and the quality and porous thickness of the oil-bearing reservoirs proved to be even better than the initial expectations. The new discovery, communicated today to the NPA, was confirmed by a cable test and revealed the existence of light oil, with specific gravity between 26° and 30° API, in an area of some 300 square kilometers that has been very well defined seismically. The set of data that were collected, in association with the knowledge that has already been acquired for the pre-salt, allowed the above-mentioned volume to be calculated.


Bakken Shale BEXP Brigham Exploration drilling - Three Forks Mountrail County, North Dakota ND

Here is a Bakken Shale drilling update, this time coming out of Brigham Exploration ( BEXP ) in which one of their wells is hitting 1,100 barrels per day.

Williston Basin Three Forks and Bakken Completions -- In Mountrail County, North Dakota, Brigham is currently completing its first Three Forks test, the Adix 25 #1H. The Adix 25 #1H encountered good shows while drilling, and will be stimulated in late September.

Bud Brigham stated, "Later this month we plan to fracture stimulate twelve intervals in the Three Forks lateral of the Adix 25 #1H well. By increasing the number of stimulated intervals, we've seen substantially higher early production performance from our horizontal Bakken wells. We fracture stimulated twelve intervals in our most recent Bakken completion, the Carkuff 22 #1H, which is located just over one mile west of the Adix 25 #1H. The Carkuff 22 #1H produced at an initial rate of 1,110 barrels of oil per day and continues to perform very strongly. At this point, it is easily our best well. Just one mile east of the Carkuff 22 #1H, we previously completed the Bakke #1H which commenced production at 380 barrels of oil equivalent per day after the stimulation of seven intervals. We also have four significant working interest Parshall/Austin area Bakken wells currently completing, several of which should provide results in late September or early October. To the south in Mercer County, North Dakota, we plan to commence our first southern extension Bakken well in October. This will be the first test on our over 31,000 net acres controlled in that area."

Bakken Drilling West of the Nesson Anticline -- In Williams and McKenzie Counties, North Dakota, in the general area of Brigham's recently successful Mrachek 15-22 #1H Bakken discovery, Brigham is commencing two additional horizontal Bakken wells. The Olson 10-15 #1H and the Figaro 29-32 #1-H are both planned as 9-10,000-foot laterals, whereas the Mrachek 15-22 #1H was a 5,000-foot lateral. The Olson 10-15 #1H is currently drilling at a depth of approximately 2,200 feet. Brigham is picking up its second operated rig to commence the Figaro 29-32 #1-H in the next two weeks and currently plans to commence its third operated rig in early 2009.


Texas Man Sues CHK Chesapeake Energy for Noisy Drilling

You can't make this stuff up! As you know, Chesapeake Energy ( CHK ) is very active in the Barnett Shale located in Texas.

A man is reported suing CHK because of the noise coming from compressor stations from one of the drilling sites Chesapeake has there.

Jim Ashford, a resident of the gated Riverbend Estates community in East Fort Worth, said he has suffered months of mental anguish and lost sleep due to the compressor stations. Chesapeake has declined to comment on this situation.

Ashford said he filed his suit in state district court in Tarrant County on Wednesday because of frustration over the excessive noise, which lasted about nine months last year.


Utica Shale Update - Gastem St Jean Well

This is the most recent news I have heard in regarding or drilling activity in the Utica Shale which is located in Quebec.

Gastem (TSX VENTURE:GMR) is pleased to announce that drilling is underway on Questerre et al #1 Saint-Jean-sur-Richelieu test well in the St. Lawrence Lowlands. Gastem holds a 20% working interest on this permit and Questerre is Operator with an 80% working interest.The St-Jean North permit, 54,000 gross acres, was obtained by Questerre in 2007 from a third party and Gastem, as a result of a previous agreement with Questerre, has a 20% participating interest.

The St-Jean North permit is adjacent to Gastem's 50% owned St-Jean Block, comprising 198,000 gross acres.


Wednesday, September 10, 2008

Haynesville Shale in Mississippi? MNLU drilling Mississippi Salt Basin

Is the Haynesville Shale located in Mississippi? One company, Mainland Resources ( MNLU ) is about to find out whether Mississippi holds any nautral gas in the Mississippi Interior Salt Basin.

MNLU has signed a Letter Agreement to acquire 5000 net acres in Mississippi where the Company plans to drill the first test well to evaluate the potential Haynesville Shale gas formation in the region.

Under the terms of the Letter Agreement, Mainland Resources, Inc. will acquire 100% Working Interest and 75% Net Revenue Interest on all gas formations within the 5000 net acres ("the leases"), which are located in southwestern Mississippi within the Mississippi Interior Salt Basin.

A number of USGS and US Department of Energy resource assessments have been commissioned over this area over the last decade. All report the deep gas potential of the area, pointing to the Upper Jurassic as a favorable exploration target. According to public records, no wells have been drilled to test the Haynesville Shale formation in the target region to date.
Company President Mike Newport states, "We have data that suggests the potential Haynesville Shale in this region could be similar in nature to the gas bearing Haynesville Shale in northwest Louisiana. Our geological team believes that this could be just as productive as the groundwork that's been laid in the Louisiana play."

"No one knew just how good the deep shale in northwest Louisiana was until an exploration company stepped up and drilled the Haynesville, Hosston and Cotton Valley formations. That's what we're setting up to do in this potential new Haynesville shale play in Mississippi," adds Newport.

The Letter Agreement for the acquisition of the Leases is set for closing on or before October 15, 2008 and is subject to standard due diligence review by Mainland Resources, Inc.

Tuesday, September 9, 2008

CNBC - T. Boone Pickens 9/09/08 on Oil, Wind, Solar Energy, Natural Gas

Boone Pickens was on CNBC just now...he had this to say:

- $4 gasoline killed demand.....$4 was the price that killed demand for gas
- If Opec wants to support the price for Oil....they will balance the market for Oil.
- I want to get wind and solar energy started
- Natural Gas to fuel vehicles...as well as batteries.....the battery only does vehicles...it won't move an 18 wheeler. Natural Gas is the cleanest burning fuel.
- We are not going to drill our way out of this but it will help!
- 30% of transportation fuel used in America is used to move goods from one place to another ( via trucks )
- Companies need incentives to switch over to Natural Gas as a transportation fuel

Finisar ( FNSR ) earnings 9/09/09 - FNSR swings to Q1 Profit

Finisar ( FNSR ) is up in pre market this more due to the profit they reported on 9/09/09 in their Q1 earnings report. FNSR is up 18% to $1.40 in Pre Market Trading.

The Sunnyvale-based company swung to a profit with net income of $4.7 million, or 2 cents per share, during the three months ended Aug. 3. During the same period last year, Finisar recorded a loss of $7.3 million, or 2 cents a share.

Excluding one-time charges, Finisar earned 4 cents per share, a penny higher than the average estimate of analysts polled by Thomson Reuters.

Sales were $128.7 million, a company record and a 22 percent jump over the year-ago period. Analysts were expecting sales of $123 million

Monday, September 8, 2008

Haynesville Shale - GDP Goodrich Petroleum Update

Goodrich Petroleum ( GDP ) has come out and given shareholders an update of their Haynesville Shale operations:


The Company has completed the T. Swiley No. 5 well in the northwest portion of the Minden field in Rusk County, Texas. The well is a vertical Haynesville Shale test with an initial production rate of 1,300 Mcf per day from approximately 150' of net Haynesville Shale pay. The well is the fourth vertical well the Company has drilled and tested in the Haynesville Shale formation in the Minden and Beckville fields in East Texas, where the Company maintains a 100% working interest in approximately 39,000 net acres. The Company's initial horizontal Haynesville Shale test in East Texas is planned for the fourth quarter of 2008.

In North Louisiana, the company has logged the Hall No. 9-1, which is the third vertical Haynesville Shale test in the Central Pine Island area of Caddo Parish, Louisiana. The Hall No. 9-1, in which the Company owns a 50% interest, logged approximately 315' of pay in the Haynesville Shale with excellent gas shows. Also in North Louisiana, in the Company's joint venture with Chesapeake Energy, the initial horizontal Haynesville Shale test in the Bethany-Longstreet field is planned to spud this week in northern DeSoto Parish, as well as an additional vertical Haynesville Shale test in the Longwood field in Caddo Parish. A second rig is planned to be added to the Chesapeake joint venture in October.

The Company currently expects to drill 16-18 (12-13 vertical and 4-5 horizontal) Haynesville Shale wells in East Texas/North Louisiana by the end of 2008.

Gil Goodrich, Goodrich's Vice Chairman and Chief Executive Officer commented, "The increase in proved reserves at mid-year further illustrates the success of our strategy to rapidly convert non-proven 2P and 3P reserves into the proven classification and increase proven net asset values. We are very pleased with our drilling results in the first half of this year adding approximately 75.5 Bcfe, including the 11.4 Bcfe of production replaced during the first six months of the year, on drilling and development capital expenditures of approximately $165 million. Our recent acreage acquisition in Nacogdoches County further expands our footprint in the Angelina River Trend where we have experienced continued success during 2008 for both the Travis Peak and James Lime formations. Finally, our nine vertical Haynesville Shale wells drilled to date, which have been strategically spaced across our 60,500 net acres in North Louisiana and East Texas, have significantly de-risked our core Haynesville Shale acreage. This positions us extremely well to begin the development and exploitation of the Shale with horizontal drilling, and we are excited to begin this aggressive horizontal Haynesville development in the next few weeks."


Marcellus Shale: RRC Range Resources Pipeline ahead of Schedule 9/08/08

The Fort Worth Business Press is reporting that the Range Resources ( RRC ) Marcellus Shale pipeline is ahead of schedule.

Range Resources Corp. said the first phase of its Marcellus Shale pipeline and processing build out was ahead of schedule, allowing its previously stated goal of 30 million cubic feet equivalent of daily production to be reached a full quarter earlier.

The Fort Worth-based energy company currently holds about 850,000 acres in Marcellus Shale leasing, and has three rigs operating in the shale, which stretches from New York though Pennsylvania and into West Virginia. Year-end production is projected to reach 30 MMcfe/d, a full quarter earlier than the company’s previously stated goal of first quarter 2009, according to the statement.


Friday, September 5, 2008

Haynesville Shale: Arkansas Columbia County - The Haynesville Shale is spreading into Arkansas!

A couple of gas companies drilling in the Haynesville Shale formation in north Louisiana have acquired permits to drill at three sites in Columbia County in south Arkansas.

The Haynesville Shale stretches across parts of Louisiana, Oklahoma and Texas and holds an estimated 29 to 39 trillion cubic feet of natural gas, though the range of the formation is not fully known. The Fayetteville Shale formation in central Arkansas holds an estimated 20 trillion cubic feet.It's not clear whether the companies interested in Columbia County intend to tap the Haynesville formation, but the planned wells would go quite deep. Two wells would go 8,800 feet and one would go 11,000 feet, and one is to be horizontally drilled.

Discovery of the Haynesville Shale was announced by Chesapeake Energy Corp. on March 25. Chesapeake Energy Corp. spokesman Saire Joubert says the Haynesville Shale's close proximity to Columbia County and its unknown boundaries would lead to natural gas exploration in Columbia County.

Green River Formation Basin - Oil Shale - BLM to offer 1.90 acres 9/5/08

The Bureau of Land Management ( BLM ) is planning to lease out 1.9 Million acres for oil shale development in the Green River Shale Basin.

The U.S. Bureau of Land Management issued a plan to set aside 1.9 million acres in Utah, Wyoming and Colorado for development of oil from shale and tar sands.
Under the plan, announced in the Federal Register today, the bureau must create rules that govern the leasing and development of the resources. The bureau estimates that Western lands hold the equivalent of 800 billion barrels of oil.

More on the Green River Oil Shale - http://www.oilshalegas.com/greenriveroilshale.html

Wednesday, September 3, 2008

Utica Shale - TLM Talisman Energy Provides Update Report 9/03/08 Quebec Canada Lorraine Shale

Talisman Energy came out yesterday with an operational update on its Utica Shale properties in Quebec Canada.

Talisman Energy Inc. ( TLM ) announced a successful test from the Utica shale in its Gentilly well in Quebec. The Gentilly well is located on the south side of the St. Lawrence River, approximately 100 kilometers south of Quebec City. Talisman holds a 75% interest in the well and is operator.

The well, which is a re-entry to a previously drilled Trenton-Black River well, flowed at 800 mcf/d from one completed interval on a sustained basis during the 18-day test period. At the time of shut in, the well was still cleaning up and pressures and flow rates were constant.
"We are encouraged by the initial results of this vertical well," said John A. Manzoni, President and Chief Executive Officer. "We have additional testing to do on the well, including zones within the Basal Lorraine and Lorraine shale formation, but this is a very promising start to our unconventional program in Quebec."

The Lorraine shale sits on top of the Utica and can be up to 6,500 feet thick. The Utica shale ranges between 300 and 1,000 feet. Early indications show that both the Lorraine and Utica rocks are thick, porous and appear brittle and over pressured, all of which are conducive to artificial fracture stimulation.

Talisman has an extensive land position with an option to earn 760,000 net acres through drilling in Quebec. The Company is in the early stage of evaluating the rock properties and reservoirs. Talisman will test three to four pilot areas over the next 18 months, with up to four additional wells planned prior to year-end.

Haynesville Shale - Natural Gas Prices - Boone Pickens 9/03/08

Natural Gas prices have plummeted over the past few months going from $14 to the mid $7's. The question is, is the Haynesville Shale still economical to drill if Natural Gas falls even further?

Yesterday, Boone Pickens came on CNBC and stated he thinks there is a huge amount of supply in natural gas which the demand is not as strong as the supply. Boone Pickens says he thinks Nat Gas could even fall back to $6 in the coming months.

With $6 natural gas, how will small companies like Goodrich Petroleum ( GDP ) and Petrohawk Energy ( HK ) be able to drill the haynesville shale? The answer is simple, these companies could stop drilling the Haynesville Shale and drill the formations above it such as the cotton valley formation. If their stock prices get to low, you could see a Devon Energy, Chesapeake Energy, or XTO Energy swoop and and buy these companies out.

With low natural gas prices, you will see a decline in drilling, but this decline will cause supplies to fall and in the long term will stable the price for natural gas out.

The Haynesville Shale is here to stay!

Tuesday, September 2, 2008

( CHK ) Chesapeake Energy sells 25% Fayetteville Shale Stake

Chesapeake Energy ( CHK ) announced today it is selling 25% stake in its Fayetteville Shale stake to ( BP ) Beyong Petroleum. This comes about 45 days after CHK sold a Woodford Shale stake to BP. For more on the Woodford Shale click here.

Chesapeake Energy Corporation and BP America today announced the execution of a Letter of Intent for a joint venture whereby BP will acquire a 25% interest in Chesapeake’s Fayetteville Shale assets in Arkansas for $1.9 billion. The assets have current daily net production of approximately 180 million cubic feet of natural gas equivalent and include approximately 540,000 net acres of leasehold which the companies believe could support the drilling of up to 6,700 future horizontal wells. As a result of the transaction, BP will own approximately 135,000 net acres of this leasehold and Chesapeake will own approximately 405,000 net acres.

BP will pay $1.1 billion in cash at closing and will pay a further $800 million during the remainder of 2008 and in 2009 by funding 100% of Chesapeake’s 75% share of drilling and completion expenditures until the $800 million obligation has been funded. Chesapeake plans to continue acquiring leasehold in the Fayetteville Shale play and BP will have the right to a 25% participation in any such additional leasehold. The transaction is subject to the execution of mutually acceptable definitive documentation that the companies anticipate executing within the next week and closing is anticipated to occur later this month.

For more on shale, visit, http://oilshalegas.com