From what I am hearing, the second well drilled has hit fairly big and they are about to frack it this week. Info on the Midway Navarro formation and Halcon is everywhere. Halcon is careful not to put out much about their find but they are now about to drill a third well and have been permitted to do so. They are also in the process of trying to buy right of way for pipelines. Must be something fairly big for them to keep drilling with that massive Nabors rig. If you look on Texags.com in the forum section under outdoors, there is a lot more info on the Midway Navarro activity in the area.
Yes, and I must add those of us in the somewhat “know” need to watch out for predators and others who might be trying to breach in on the leases. Those predators will play on people in the Cat Spring area who do not know. Trying to buy up mineral rights as if they are doing a favor. If you hear or know about any of that, the true engineers and drillers here want to know right away.
During one of the booms gone bust in East Texas, this happened. The predators, lawyers came in, buying up mineral leases, acting as a favor. But they knew the oil and gas would be reachable one day.
I noticed yesterday that they started flaring the first well on 949. This morning when I went by, still burning bright. What does this mean about the well? Does anyone have info on the second well they just finished? I understand they are about to drill the third well now off of Mill Creek Road.
Not 100% sure Wayne. From what I have researched on the net tells me this is normal. They use that possibly to measure well flow and strength. But it is to be expected with gas wells. If it is burning tonight, I want to go by and take a picture. Have been trying to document this as it is history in the making right here in Cat Spring.
Both of the wells have not produced at the level Halcon predicted. If they continue to execute leases it would be a shock. They have even moved the drilling rig to a different conventional resource play. I’d cash in ASAP on a lease bonus because after the refrack Hinkel Rd, I wouldn’t be surprised if they shut down their entire Midway Navarro operation.
Too bad. They had a lot of problems at site 1. Looks now like they are putting it online soon. The pipeline is all in place. Did hear they were thinking of a parallel well near site 1. However with all the negative I see and hear here on this blog, they are doing some major expensive 3D Imaging all over the area. And that is very very expensive. Halcon seems to say on their website they have some things in the works for other sites, plus something they are studying. Who knows what will be going on. Too bad, was looking for some financial help, guess it will not be happening now.
Seismic and a lease bonus will still result in a significant financial windfall. It’ll be interesting to see the 2013 CAPEX for the Midway Navarro area. If the production isn’t wetter or the price of dry gas and natural gas liquids don’t rise to a price that makes it financially feasible to transport them vs. flare off the dry, you could see things pick back up. The production and IRR isn’t there at the current prices when you recognize the BOE per day production in the Woodbine and Bakker and consider the $43 million they just spent to expand their position in the Utica. The $/vf is also highest in the Midway Navarro relative to the wetter resources plays they control.
Hello Chris,
You’re talking way over my head. But it appears to me and sounds to me like if they close it down after these 2 wells, it still could be open for more depending on the market and maybe whatever else they find with the 3D Imaging they are active in. Some of that also is dependent upon the push for natural gas usage, like does the East Coast have a hard winter and do car manufacturers push for natural gas over oil to become more energy independent. I am combining what you say, with what I read on the Internet. You’re talking to an “armchair quarterback” here. My logic is they would not be doing the 3D if they were not serious. 3D being very expensive.
Seismic lets them drill more accurately and file reserve estimates for the underlying leases. It also makes the company more marketable for a takeover like Floyd Wilson has made clear he intends to pursue. Relative to drilling costs that are 9-10 million per well, 3D seismic is a drop in the bucket.
The amount of seismic they are conducting would not be considered extraordinary by industry standards. It is a small target area of 50,000 acres and they are conducting seismic over roughly half the intended target area. Their Woodbine acreage is almost 200,000 acres and largely ready to spud due to GeoResources previous work before the acquisition.
One positive is the non-compete with Petrohawk/BHP ends in the next 45 days and I would imagine many will return to work for Mr. Wilson. I think they are currently trying to get production online for shareholders while treading water before the turnover. Once they are operating on free cash flow from operations, the ability to take risk in more exploratory or expensive resources plays becomes feasible.
Some of this being an outsider is a lot scary. I think that site 1 is online or close to being so and I would guess site 2 is about a month away.
Midway/Navarro
The Kollatschny 1 (95% working interest, 78% net revenue interest), located in Austin County, Texas, was completed in the Midway formation and had an initial gross production rate of approximately 595 Boe/d, or 95 barrels of 52 degree API gravity oil and 3 MMcf of 1,100 BTU natural gas, on a 15/64 choke. The vertical well was fracture stimulated over four stages in the Midway sands after original completion operations in the Navarro sands yielded dry gas. The Company is currently in the process of testing its second well, the Hillboldt 1.
Second frack at the Midway proves much more successful from a liquids standpoint. HB1 is being refractured along the same formation after encountering the same dry gas incursion in the Navarro.
Better results than I expected given the general attitude around the area. Overall, they seem much happier now than 3-5 weeks ago before the dual formation frack.
When you talk about “general attitude around the area”, if you’re talking about the people who live here, yes there is not a positive attitude. That is due to past history of failed tries from Jamex and Placid Oil. Left a very very deep scar of doubt. Even now with what is going on, you hear scoffing and others who flat out refuse to believe anything ever will be taken out of the ground. And 2 wells will not change anyone’s mind either. Now if by attitude you meant the people working the sites, they have all been 100% positive they knew stuff was down there and they have known they would be able to get it out. Cost time and a learning curve is all they claim to require.
Halcon always said they might have to approach each formation individually depending on the original production results. The negative is that they found a large amount of dry gas which isn’t worth squat to them right now. The positive is that they nailed their original projection on the dry gas side and at some point dry gas will turn around. If dry gas rises into the $5 mcf range, they will turn up the heat on the area.
Hillboldt #1 has been shut in and further negotiations over easement from K1 to H1 have been terminated.
Explain what you’re saying. Are you saying Hillboldt is a dead well? And all further drilling is now dead?
It means they aren’t moving it into production at this point. All drilling is DOA.
I sure have wished and hoped for good news here. To me it just doesn’t seem that optimistic. Can hardly wait for my .25 royalty to come in one day. Pardon the sarcasm. When they drilled for oil on the site 1 property years ago, we got a royalty of .25 once.
Halcon bought the old Industry Bank building and are renovating it.
Not sure you’re right on that Chris. Found out it was Calloway Engineering, moving offices from horrible location in Bellville to that site.
Not this again…