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Permalink Reply by john oliver on April 19, 2016 at 14:54

How does that compare to avg annual production of haynesville well? On the up side of the curve?

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Permalink Reply by dbob on April 19, 2016 at 15:49

The 35 BCF that has gone out so far would represent 1st year production on roughly 5-7 good Haynesville wells, by my guess.  Haynesville production is less important than the pricing effect this may be starting to have - Article suggests upto 200 BCF by the end of the year that does not go into storage, with possibly higher volumes in later years. Making that 200 BCF disappear productively lifts the price paid for all gas in the region, at least a few percent.   

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Permalink Reply by Spring Branch,mineral owner on April 20, 2016 at 4:44

dbob, my view is a HA well making 3 BCF in it's 1st year is a darn good Haynesville well.  If so, that 35 BCF would be the equivalent of  about a dozen good Haynesville wells

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Permalink Reply by Skip Peel - Mineral Consultant on April 20, 2016 at 5:32

IMO, it's hard to make a fair comparison by well.  The most recent well design variants, call them HA 3.0, are just now reaching and surpassing 12 months production.  And many have been drilled as allocation wells in E TX or HC in LA.  In NW LA the newer  HC wells are drilled as alternate wells encompassing two or more units/sections already in production.  Since LA production reporting is by LUW Code it's impossible to break out individual well production.

Here is what I consider a reasonable example.  BHP, S/N 248401 in Bossier Parish, Swan Lake Field.  There are six wells drilled in two sections and reporting under two LUW code numbers.  The wells are a mix of older original wells (HA RA SUA and SUB) and more recent HC wells.  This is in a core area of the Haynesville Shale and there is 10 months of production from the newer wells.  The cumulative for the 10 months is 7.974 BCF.  Based on current decline, the 12 month total should be ~9 BCF.

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Permalink Reply by Spring Branch,mineral owner on April 21, 2016 at 8:57

Of course you are correct, Skip.  The various length cross unit laterals have made it much more difficult to make generalizations on a per well basis.  I have not so far been convinced that on an apples to apples comparison, the cross unit lateral wells are going to make the typical royalty owner that much more royalty income, other than from picking up the additional non-productive feet of lateral that existed in the older single-section wells.  I do, however, think that because of reduced cost, the cross unit lateral wells are a major benefit to the well Operators.

I meant to say previously that for a "single section" HA well, 3 BCF in the 1st year of production is  a darn good well.  Six times 3 equals the same thing as 3 times 6, meaning of course, that there will be fewer cross unit lateral wells in total drilled.

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Permalink Reply by Skip Peel - Mineral Consultant on April 21, 2016 at 9:09

Yep, a 3 BCF single well is a very good well.  I haven't run across many HA wells in that range in NW LA regardless of lateral length.  I agree the major advantage is to the operator on well cost.  However the additional ~80 acres of production representing the north and south unit setbacks in a single section unit is a significant addition for both the operator and the royalty interests.  It would have been a disturbing waste of the resource to leave those areas unstimulated.

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Permalink Reply by Spring Branch,mineral owner on April 21, 2016 at 10:33

Agreed!

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