AubreyJ.org: #12 Haynesville Shale Updates - Post Date, Monday, July 28, 2008

Monday, July 28, 2008

#12 Haynesville Shale Updates - Post Date, Monday, July 28, 2008 - This Post Updated 6 Times

This Post Last Updated: Saturday, August 02, 2008
2:30 pm CDT
Haynesville Shale
Large Natural Gas Deposit, Northwest Louisiana

UPDATES:
Monday, July 28, 2008

Image courtesy of Chesapeake Energy

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* Let’s get caught up with the Haynesville Shale News by starting off with this news article posted on the Shreveport Times website early this Monday morning, July 28th. It starts off like this... The biggest topic dominating financial talk in our area is the impact of gas reserves in the Haynesville Shale, and that a lot of people are receiving very large checks. Millions of dollars of lease bonus payments, which are treated as ordinary income for income tax purposes, are flowing into people's pockets... This means that a $1 million check will produce approximately $410,000 in taxes to be paid to the federal and state governments. That is 35 percent to the IRS and 6 percent to the state. Depending on the future political debate of estate taxes, your family may have even more to pay later. Hopefully, royalty checks will dwarf these lease bonus payments in the future — but you do not know that yet. Right now, you know you only get to keep 59 percent of the lease bonus payment. That's right; you get to keep $590,000...
Read this news article by the Shreveport Times in full at link below...
Financial Fundamentals: Shale income considerations
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* Haynesville Shale Companies & Stock website brings us the following post, titled...
Haynesville Shale Companies & Stock - List of Well Drilling Companies
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* Stockhouse.com has this report on the Haynesville Shale gas production by Petrohawk Energy. It starts off like this... Short sellers want nothing to do with PetroHawk (HK). The short interest in the company dropped 62% between June 30 and July 15, falling to 7.3 million, which is less than 4% of the float. At just over $33, the stock is trading at the middle of its 52-week price range. The firm's stock dropped 15% last week, and the company had a $88 million money flow on Friday...
Read the full report at link below...
Shorts flee Petrohawk Energy

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* ArkansasBusiness.com has this report posted it starts off like this...
China's top state oil firm is considering placing a bid on acreage in the Fayetteville Shale Play, the South China Morning Post reports.
China National Petroleum Corp. could bid on a minority stake in acreage in Arkansas and Pennsylvania owned by Chesapeake Energy Corp. of Oklahoma City...
Read the full report at link below...
Chesapeake Could Sell Fayetteville Acreage to Chinese Firm

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* KTBS website reports it this way with this News/Video...
(Note: Video should be posted fairly soon)
Chinese oil giant considers bid for interests in natural gas shales
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* UPDATE *
Tuesday, July 29, 2008
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* The Shreveport Times website has the following and it starts off like this... Anxiety in Mansfield over cash bonuses that may or may not be coming to about 400 residents should serve as a cautionary tale in the saga of the Haynesville Shale... Do your research. Don't get stampeded. Be careful what you sign... Questions surrounding Fortress Management, which has been working to secure leases for natural gas deposits in DeSoto Parish, ultimately could work themselves out. But at present Mansfield area residents are unclear whether the bonuses they thought they were accepting - as much as $24,000 an acre - will ever arrive...
Read the rest at link below...
Editorial: Beware the 'shale' game
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* EarthTimes.org reports on Continental Resources, INC 2008 Second Quarter Report. It goes in part like this...
...During the second quarter, Continental continued to expand its undeveloped acreage positions in the Bakken, Anadarko Woodford, Atoka, Rhinestreet, Marcellus, Huron and Haynesville shale plays. The Company has added approximately 325,000 net acres to its lease holdings since the beginning of 2008, increasing its acreage position to almost one million acres in U.S. shale resource plays... "We continue to see opportunities to add significant additional acreage in these plays," Mr. Hamm said. "We are planning to ask our board of directors for a second increase in the 2008 lease acquisition budget that would raise it by $100 million, bringing the total 2008 land budget to approximately $178 million."...
Read the full report at link below...
Continental Resources Reports Record Results for 2008 Second Quarter

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* New York Times website has this report up...
Gas Rush Is On, and Louisianians Cash In

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* EarthTimes.org reports on Continental Resources, INC 2008 Second Quarter Report. It goes in part like this...
...During the second quarter, Continental continued to expand its undeveloped acreage positions in the Bakken, Anadarko Woodford, Atoka, Rhinestreet, Marcellus, Huron and Haynesville shale plays. The Company has added approximately 325,000 net acres to its lease holdings since the beginning of 2008, increasing its acreage position to almost one million acres in U.S. shale resource plays... "We continue to see opportunities to add significant additional acreage in these plays," Mr. Hamm said. "We are planning to ask our board of directors for a second increase in the 2008 lease acquisition budget that would raise it by $100 million, bringing the total 2008 land budget to approximately $178 million."...
Read the full report at link below...
Continental Resources Reports Record Results for 2008 Second Quarter

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* Oil and Gas Investor website has this interesting report and it starts off like this... Think $25,000 an acre is top of the market for the Haynesville play? Don’t stop there...
Haynesville, Do I Hear $50,000/Acre?
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* NWLA.com reports...
Haughton to hold Haynesville Shale seminar
The Town of Haughton is hosting an informational and educational seminar on the Haynesville Shale from 6:30...
Read this short report HERE

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* UPDATE *
Wednesday, July 30, 2008

* The Shreveport Times website gets us going this early Wednesday morning with the following reports...

> One week before its regular monthly meeting, the Broadmoor Neighborhood Association hosted a public town hall panel discussion... Approximately 475 to 500 local residents attended this Haynesville Shale meeting at 6:30 p.m. July 22 the Captain Shreve High School auditorium... BNA had strongly recommended homeowners hold off on signing oil/gas leases until attending the meeting to listen and discuss various matters related to mineral leases, bonus payments, drilling and other related topics. Nonbinding letters of intent for membership in Shreve Centre Coalition LLC, legal since July 18, were distributed to attendees. BNA President Ken Krefft served as moderator at the panel discussion, which included a question-and-answer session.. Heard, McElroy and Vestal Certified Public Accountant Alice Frazier was the first panelist to speak. Frazier addressed what part of the lease bonus homeowners don't get to keep and said it's important for homeowners to put away 40 percent for taxes. She also clarified a mineral lease is not a sale, but an agreement between the homeowner and oil/gas company...
Read the rest at link below...
BNA hosts Haynesville Shale panel discussion

> Sewers and roads aren't attention-grabbing topics - until they stop working... So the good news for residents of three towns in Bossier Parish - Benton, Haughton and Plain Dealing- is your toilets could flush a little easier, your roads could be a little smoother and your local governments might be a little happier thanks to that ubiquitous, subterraneous friend northwest Louisiana has come to know and love: the Haynesville Shale... "Small towns like Haughton and the rest of us are always strapped for cash, so it could really be bonus money for us to use to improve infrastructure," Plain Dealing Mayor Dale Barnette said... His town's government is in the same boat as most of its residents: Barnette and company have heard a lot about the Haynesville Shale but have yet to be approached by anyone...
Read the rest at link below...
Bossier towns in the shale game, too

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* UPDATE *
Thursday, July 31, 2008

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* LATime.com has this article posted today that’s a must read and it goes in part like this... Energy firms have offered Chris Moreno $750,000 to drill for natural gas on his land on Caddo Lake, La., as well as 25% of whatever the wells yield, which could bring him an additional $900,000 a year. But the bids keep getting bigger, so he’s waiting...
Read this article in full at link below...
Natural gas find in Louisiana makes Jed Clampetts of property owners
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* Reuters UK website has these 2 report posted today...
> IP sells Haynesville rights to Chesapeake
> Industry report says U.S. natural gas supply abundant
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* MarketWatch.com has these reports up today...
> Penn Virginia Corporation Provides Second Quarter 2008 Oil and Gas Operational Update
> Chesapeake Energy Corporation Reports Financial and Operational Results for the 2008 Second Quarter
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* SeekingAlpha.com website reports...
Southwestern Energy Company. Q2 2008 Earnings Call Transcript
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* CNNMoney website brings us this report...
International Paper to sell subsurface mineral rights to Chesapeake Energy for about $263M...
International Paper to sell mineral rights
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* KTAL website has this News/Video...
Tax Free Holiday for Shoppers
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* KTBS website has this must see News/Video report at link below...
Landowner says she could have signed away royalties if she hadn't read fine print
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* Shreveport Times website has the following report...
State workers trying to keep up with shale permits
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* I’ll end today’s posting with this great report I found on the EasyBourse.com website and it starts off like this...
The chief executive of natural gas producer Chesapeake Energy Corp. (CHK) on Wednesday tried to broaden the market for natural gas by appealing to political concern over the U.S.'s energy crisis, telling Congress that the fuel can provide a solution to both high gasoline prices and climate change... Hours after presiding over the release of a new report showing that the U.S. has enough natural gas supplies to meet more than 100 years of demand at current levels, Chesapeake Energy Chief Executive Aubrey McClendon told a U.S. House committee that the country could build more natural gas vehicles and gas-fired power plants without raising prices for fertilizer, chemicals and other products that are made with natural gas... "Three years ago I would have said no," McClendon told Rep. Ed Markey, D-Mass., chairman of the Select Committee on Energy Independence and Global Warming. Markey had asked whether natural gas supplies were enough to reduce the nation's reliance on coal-fired plants to about 35% of electricity from 50% currently, without raising natural gas prices. "Today, I say yes," said McClendon...
Read the full report at link below...
Chesapeake CEO Offers Natural Gas As Answer To US Energy Woes

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* UPDATE *
Friday, August 01, 2008

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The Forbes.com website gets us started off today with this report...
The natural gas industry has been turning up the heat this summer in the nation's capital. Advocates are explaining to lawmakers that while oil is expensive, scarce and imported, there's enough natural gas in the U.S. supply to last more than 100 years... One example: Aubrey McClendon, Forbes 400 member and chief executive of Chesapeake Energy, (NYSE: CHK) the second-largest independent producer of natural gas in the country. Speaking at a Congress hearing Wednesday, he sounded more like someone in the business of political snake oil... "Imagine if tomorrow you could announce a new energy plan that would in one stroke cut your constituent's gasoline bill in half, reduce our oil imports, improve our air quality, enhance national security, strengthen the dollar, reduce greenhouse gas emissions and create tens of thousands of new jobs in the U.S," McClendon said. "I believe your upcoming reelection chances would be even higher than they already are."...
Read the full report at link below...
Natural Gas: Booming In The Beltway
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* SeekingAlpha.com website has this report posted early this Friday morning...
Marathon Oil Corp. Q2 2008 Earnings Call
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* KDBC website has this AP report posted on their site today and it goes in part like this... McClendon said that by the end of this year, Chesapeake anticipates using 12 rigs to develop its 450,000 net acres of leasehold in the play. He said that, on average, the company should be able to complete a new Haynesville well every five days...
Read the full report at link below...
Chesapeake Energy buys more acreage in Haynesville

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* UPDATE *
Saturday, August 02, 2008
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* KSLA website had this News/Video up Friday evening and it goes in part like this... The first 'fruits' of the Haynesville Shale are now blossoming in the local economy as property owners begin to spend some of their lease bonus payments. At least some of them are buying 'big ticket items' like cars, boats and RV’s... The jury may be out on the exact scale of the Haynesville Shale economic boom. But, there's no denying one fact: Many property owners getting bonus lease payments aren't putting their money in their mattresses. And, it's all because of the natural gas trapped inside rock called shale two miles beneath the surface...
Click out the rest at link below...
Haynesville Shale money begins trickling into economy

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* KTBS website also had a News/Video report up Friday evening and it goes in part like this... Business is booming in east Texas and some are crediting oil and gas production... Restaurant owners in Marshall say they've seen a tremendous increase in business--especially at the downtown restaurants which are close to the Harrison County Courthouse and where all the landmen are working...
Click out the rest at link below...
Haynesville Shale brings business to Marshall

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* UPDATE *
Sunday, August 03, 2008
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* Here’s a News Release from International Paper...

International Paper Agrees to Sell Mineral Rights to Chesapeake Energy Corporation for Approximately $263 Million

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International Paper (NYSE: IP) has agreed to sell approximately 13,000 net acres of subsurface mineral rights located in the Haynesville Shale natural gas formation in northwest Louisiana to Chesapeake Energy Corporation (NYSE: CHK) for approximately $263 million, subject to various adjustments at closing.

The transaction is expected to close in late August.

"The proceeds will be used to pay down debt," said John Faraci, International Paper's chairman and chief executive officer. "We will continue to look for opportunities to monetize our remaining U.S. forestlands, real estate, and mineral holdings, to strengthen our balance sheet and maximize shareholder value."

This agreement is part of International Paper's transformation plan to focus on global uncoated paper and packaging, as well as xpedx, its North American distribution business.

About International Paper

International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tenn., the company employs more than 50,000 people in more than 20 countries and serves customers worldwide. 2007 net sales were approximately $22 billion.

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For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com
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This press release contains forward-looking statements. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ relate to: (i) the ability of the parties to successfully consummate the transactions contemplated by the purchase agreement without a purchase price adjustment; (ii) the successful fulfillment (or waiver) of all conditions set forth in the purchase agreement; and (iii) the successful closing of the transaction within the estimated timeframes.

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* MORE TO COME SO CHECK BACK! *

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* Links of Interest *
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* City of Shreveport website...
Shreveport Shale

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* Greater Springlake Area Neighbor

* Louisiana Office Of Conservation Home Page

* Louisiana Office Of Conservation 2008 Schedule of Public Hearings

* Louisiana Department of Natural Resources Home Page

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* Louisiana Department of Natural Resources - Haynesville Shale
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* Louisiana Oil & Gas Association

* National Association of Royalty Owners

* Geology.com: Homepage