MWM, I'm looking for a little small or micro cap E&P who has a position that is prospective for the Lower Smackover Brown Dense (LSBD) Play. I have only found one so far, AVOE, and I really don't like the location of their leases that are held by production - The Smackover is too deep that far west, & likely to produce dry gas.
The LSBD is about to be huge... On SWN's 2nd completion of a Horizontal LSBD well, they are getting rumored to be flowing 800+ BOPD out of the ground. SWN representatives are also rumored to have unofficially said that "the LSBD will eclipse the Eagleford".
I decided to compare SWN's recent success to the Early Eagleford development & found that it took over 40 horizontal completions & 2 years before the eagleford ever had a well that flowed 800 BOPD or better. If SWN continues progressing along the learning curve at their present rate, then LSBD might be better compared to the Baaken Shale. After all, the LSBD is the most prolific source rock of the Greater GoM basin and I believe that it has huge potential.
I believe that the formation will be productive for liquids from Claiborne Parrish, LA to western Yazoo County, MS then pick back up in southeastern Rankin County, MS and stretch all the to where the Alabama/Florida Border meets the GoM. I should mention that east of Jackson, MS the LSBD is much deeper than it is in the area where SWN, CHK, & DVN are currently targeting; yet it will still produce liquids because the temperature gradient is less severe. However the LSBD is pretty deep & will require higher OIl prices to be economic, & feel that $200/bbl oil is less than 5 years away.
There is also a pocket in Jasper & Clarke Counties of Mississippi where the LSBD is relatively shallow (+/-13,000 ft) & more economical to develop. A Canadian Company (Epsilon) signed a joint venture deal with a mineral owner in Western Clarke County that stipulated that Epsilon would have to drill 2 Horizontal LSBD wells in 2011 or pay a $1MM penalty. They drilled the 1st horizontal well, but despite numerous oil/gas shows while drilling the interval they never cracked the well. Epsilon's presentation used to say that they were looking for another partner interested in a frac-to-praticipate deal. Then, the offer disappeared & Epsilon omitted the LSBD from their presentation. There has no LSBD activity in South Mississippi since. I think that this little pocket would be a great place to secure some 10-year leases at $50/acre and just sit on them or work over previously abandoned wells...
Looks like I got a bit long winded, but please let me know if you hear of anyone building a position in the LSBD. I feel like I have a company on the verge of capitalizing on early Mississippian Lime leases, and would love to find a similar company in the LSBD...
