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Permalink Reply by Philip Brutz on January 18, 2015 at 11:26am

Unfortunately many of my neighbors are stuck in old Oxford leases that vulnerable to this tactic.

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Permalink Reply by evan on January 18, 2015 at 12:59pm

Not a lot of the lease around this area Ed. I know a bunch that are vulnerable. A lot of those people didn't use attorneys. Not that it would have helped, I know a lot of attorneys who don't know much more than I've learned on here

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Permalink Reply by H.W. Plainview on January 23, 2015 at 5:03am

Sounds like those industry guys (probably landmen) didn't know what they were talking about.

For traditional vertical development, an operator typically needs a source rock (creates the gas), a reservoir rock (holds the gas), and a trap rock that traps the gas in the reservoir. All three things need to present themselves in a location for a vertical well to be viable.

On the other hand, shale formations are unique in that the source, reservoir, and trap rocks are all contained in the shale itself. This basically means that the shale is a more continuous resource. It doesn't depend on unique geological features to provide suitable locations for drilling. This is one of the reasons why the companies are able to simply stack the drilling units next to each other in a uniform patern--the geology allows it.

So the idea from the industry guys is a mediocre one at best. It would be impossible for the companies to hold all of their shale leases with conventional vertical wells. I can guarantee that the companies don't have the locations since the verticals depend on trap features, which are not as uniform and continuous as the shale.

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Permalink Reply by James Vanderink on January 23, 2015 at 6:41am

HBP on AEP land? 

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