Range Announces Second Quarter 2017 Financial Results
FORT WORTH, Texas, Aug. 01, 2017 (GLOBE NEWSWIRE)
North Louisiana Division
Production for the division in the second quarter of 2017 averaged 416 net Mmcfe per day, an increase of 5% from the previous quarter. Late in the second quarter, the division brought on line six wells, consisting of three Upper Red wells and three Lower Red wells.
The division continues to focus on Terryville while methodically testing and delineating other areas. Significant progress has been made in lowering the cost to drill and complete a typical 7,500 foot lateral well in Terryville, currently at $7.4 million. As previously discussed, production from the wells brought to sales in early 2017 were below expectations. These included wells that were drilled prior to the acquisition, but not completed. In addition, Range experimented with changes to completion designs and more specifically, fluid intensity, in an attempt to mitigate the impact to offset wells. These wells on average were stimulated with approximately 40% less fluid per foot compared to typical Terryville completions, while utilizing the same proppant per foot. The initial production response in the wells has been below expectations by a similar percentage, with a flatter decline profile, suggesting the wells were under-stimulated. Going forward, Range is planning to return to the larger fluid designs.
In the expansion areas, the two wells previously announced (one to the east and one to the west of Vernon field), continue to perform well. Gas in place estimates for the area are 400 Bcf per square mile and plans are underway to offset each of these expansion wells with another horizontal well. The offset wells are expected to spud in the third quarter with results near year-end. In addition, the Company plans to drill two vertical wells in the area to better determine reservoir properties and identify the optimal target of the six potential intervals.
Link to full press release:
Skip, I'm happy to see the resurgence in the Haynesville. How do they decide when and where to refrack or to drill new wells/install pads in sections already drilled? We got a well back in 2011 - just wondering if there's a method to the madness of when we might see new activity. We're in: S6-15N-15W
Thanks so much!
It's hard to keep up with re-fracs as few companies provide much detail. The current opinion seems to be that it is a better expenditure of operating capital to drill new wells. The re-fracs just don't have sufficient return on investment at current NG prices owing to their costs. The new develop patterns are for multiple Cross Unit Laterals in two or more adjacent sections. That's good news, not so good news. Good if your minerals are in one of those section, not so good if you are not and your section is not on the near term drilling schedule. Companies can ride older, largely depleted wells that hold leases in effect for years while they use pad drilling and multi-well completion operations to drive down their costs per mcf. The number of new wells has increased significantly but they are concentrated in fewer sections. It is beyond my paygrade to discern what variables cause companies to choose certain sections for new wells. I imagine there are a number of criteria that are considered.
Thanks Skip. Always appreciate your straight answers!
You're welcome, Jeff. A modest increase in NG price in 2018 should support continued Haynesville development.
Range currently is running 7 rigs, Wildhorse Resource Management 2 and Nadel & Gussman 1. All are drilling in Lincoln Parish at this time.
Both the Weyerhaeuser Co 15 #2 and Cone Etal 15 #1 are vertical test wells drilled in Section 15 - 16N - 1W. The Cone reached Total Depth on June 19 and the Weyerhaeuser on July 9. Range has not as yet applied for a work permit to complete either of the wells.
The current priority for Range is changing their completion designs in the Terryville Complex where they somehow managed to under stimulate their most recent group of wells. It's at least one of the reasons their stock took a big hit. The company made a point of stating that they were much more experienced operators than their predecessors, Wildhorse and MRD, and then proceeded to prove otherwise.