Two More Big Shale Plays??

Last week on CNBC's Mad Money, Jim Cramer had on the CEO of Halcon, Floyd Wilson, and they discussed two new shale plays that have huge potential. Cramer explained that Halcon was still building its lease hold in the two plays and was keeping it quiet for now.The next night, Cramer had on the CEO of a business that does core sample analysis for several O & G companies, Core Business I think it was. He also said he knew of the two new shale plays yet to be announced but is sworn to secrecy.

That means that there are two areas where landowners don;t know just what potential they have and Halcon is leasing them up at bargain rates. They also don't want other companies to compete in these areas and drive up prices.

Any idea where these are? What undiscovered shales could this be?  I'm gonna guess that southern Illinois and Indiana is one of them but thats just a guess.

And if these two plays are big enough, how would that affect Ohio and Pa Utica/Marcellus? Would it draw away attention and money?

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0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 9, 2013 at 5:06pm

Everything could be a ploy by Floyd.  But if he can show that there's proved reserves beyond a one tiered play then the value of the company will bust out.  I saw data today--directly from Halcon--that delineated the cost and PV10 of their Trumbull county wells.  If their numbers are accurate (they're not; they used really questionable data to get to an EUR number that's based on fantasy) then they'll only lose ~$8,000,000 on these two wells in Lordstown.  Seriously.  The cost far exceeds the PV10.  That's likely due to the exploratory nature of these wells, but the cost would have to drop substantially and their EUR numbers would have to be dead on for this to be a profitable play for them.  They're a perfect example of how not to jump into a play.  Don't overpay for a position (they did) and don't be the first ones in an area and pay good money to learn how to reinvent the wheel.  Upside?  If the EUR is even close to accurate then landowners in those first Halcon units will be stinkin' rich.

Permalink Reply by Kangoo on May 9, 2013 at 7:04pm

The fact that so many of the stratigraphic tests are permited for the Trenton has nothing to do with interest in the Trenton (at least not in the current areas of the Utica play).

The Trenton sits just below the Point Pleasant. Stratigraphic test wells are drilled to either take core or logs of the Point Pleasant. However to do this over the full Point Pleasant intervall (and especially for logging one needs a sump below the lowest logged point) one has to drill into the formation below (just a hundred or 200 feet).

The formation below is in this case the Trenton and that's why these vertical wells are permitted for the Trenton and then plugged back.

Permalink Reply by Mark Thevenot on May 10, 2013 at 4:16am
Tuscaloosa Marine Shale in Louisiana I know Halcon is acquiring leases at low rates as is EOG following the lead of Encana And Goodrich etal.
0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 10, 2013 at 5:00am

Clinton wells have been fraced every which way you can think of.  The East Canton Oil Field will likely be revisited within the next 8-10 years and they'll try a whole bunch of secondary recovery methods that will pump up production.  The reason that you don't drill it horizontally is because you're not looking for oil that's settled throughout the rock, you're looking for a trap.  That's where the production comes from and the pressure balance is critical.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 10, 2013 at 5:52am

No idea.  I've asked the same question and I haven't had anyone with industry knowledge do anything but give me a puzzled look. 

Permalink Reply by Tom Brian on May 10, 2013 at 6:09am

N.Y. will allow drilling and fracking as soon as Como finds out he can't be President .

Too many city folks misinformed and misled by pied piper yet ,  

Permalink Reply by Tim Tarr on May 10, 2013 at 6:36am

I think one of the "new plays" is the Deleware Basin in S.W. Texas and S. New Mexico.

Permalink Reply by Paul Martinelli on May 10, 2013 at 8:59am

i agree

Permalink Reply by James Vanderink on February 11, 2014 at 1:58am
There are lots of "goodies" above and below the PP here in Ohio with the PP believed to be the source rock. Look for someone in the near future to try a horizontal bore in the Trenton/BR and/or the Knox Formation(Trempeleau, Roserun, Beekmantown, Wells Creek etc)
Permalink Reply by Mark McGrail on February 11, 2014 at 3:31am

Jim,

I'm aware of the New Albany Shale in Indiana & Illinois.

Will it take away from The Utica & Marcellus ? I suppose it will depend on the reserves and ease of development.

My guess is that we will need all natural gas that can be produced. First chemical plants are moving back to the U.S. from overseas. Then there is the continuing conversion of power plants, along with vehicles and other forms of transportation. There is also the extension of distribution lines to the east coats etc.

Permalink Reply by James Vanderink on February 11, 2014 at 4:11am
I just started following the NAS. From what I gather there is one horizontal rig in the basin and some vertical test wells going in also. I understand it's becoming tough to get a drilling rig with all the shale plays going on. All the rigs have been pulled out of Michigan and dispersed to the shallower shale plays. Ohio recent terrible weather mixed with tough terrain of eastern ohio maybe slowing things down. The Utica would be logistical nightmare in terms of terrain, weather, small individual acreages etc compared to the Eagleford and Bakken where it's relatively flat and warmer(exclude ND from that)and a landowner out there may own 5000acres compared to choppy ownership here. Oh, I'm rambling now, but the big boys are here for a reason. Look for the Utica to morph into some other formations in Ohio like in ND and TX.
Permalink Reply by catt on February 11, 2014 at 4:55am

I think a lot of the companies will expand into the Trenton Black River .....a few years back we talked to a person from one of the companies .....she had came here from Texas. She said for now they were wanting the Utica and Marcellus...but the real goal was the Trenton...she stated it is very rich play. Just hope people thought ahead and just leased the rights to the Utica and Marcellus. They will be back for the Trenton someday......

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