Replies to This Discussion

Permalink Reply by Lawrence Silver on February 3, 2011 at 9:03

Beth,

 

Call Chesapeake or go online and request a user name and password. Once you have done that, you can download the direct deposit form. You can also check your revenue statement every month as well as all previous statements. You can also e-mail them queries (as I did yesterday) to help solve problems.

 

The wells decline in volume as time goes on but before you consider selling, know that the long-term plan is to drill an additional 7 wells per section.

 

Lawrence

Permalink Reply by Elizabeth Smith on February 4, 2011 at 6:25

Ok, I will do that Lawrence, thanks!  The checks have gone down a little each month.  Will that continue until it is down to nothing?  How does that work?

Permalink Reply by Linda Whatley on February 4, 2011 at 10:13

They say there is a vast supply of gas in the HS, so the wells could last for a very long time....maybe 20 years or so.  But I'm not an expert, so let's ask one of them to reply to your question.  Skip, Barron, FXEF, GoshDarn, & others... ....where are you????

Permalink Reply by Parkdota on February 4, 2011 at 12:40

HA wells generally will last 20-25 years.  If one were to take initial production, typical decline rates, and the initial choke, then the wells much last much longer.  However, once the wells are producing the operators will open up the chokes to maximize their production thus squeezing in production to a shorter time period of roughly 20-25 years.

Permalink Reply by Skip Peel - Mineral Consultant on February 4, 2011 at 13:01

We know much more in regard to production philosophy and Estimated Ultimate Recoverable reserves today than when we started this journey almost three years ago.  And the initial wells have not been drilled in the current total of approved HA units.  So in a general way of speaking, we have not yet finished the initial one eighth phase of development, excepting those units where operators are testing mass production concepts.  Considering the advance of technology that has brought us to this point, it is easy IMO to imagine more to come.  When EUR estimates of 6.5 bcf per well were floated, that was amazing.  With increased knowledge some operators now report their belief that average EUR's may be 7.5  to 10 bcf per well.  Of course this is location and rock specific but it still illustrates the extent of "upside" to the technology that drives the HA/BO Play.

Permalink Reply by Elizabeth Smith on February 5, 2011 at 7:00

Thank you so much for all of the great information.  I was going to go to the seminar since I live in Shreveport but it was cancelled.  Will have to  see when it gets rescheduled. 

Do the checks just automatically decline every month?

Permalink Reply by Elizabeth Smith on February 9, 2011 at 4:32

Can anyone answer my question about the checks? Mine dropped several hundred dollars this month and has declined every month by a couple of hundred.  I need to know how this works.  Do they ever go back up or do they just continually decline until they are zero?

Permalink Reply by Skip Peel - Mineral Consultant on February 9, 2011 at 4:48

Elizabeth all well production declines as does the associated royalty payments except for periods when sales prices go up enough to off set production decline.  The Haynesville Shale horizontal wells will decline between 80 and 50% the first year depending on the choke setting for the individual wells. Keep in mind most sections will eventually have up to 8 wells so your royalty income will vary significantly over the life of production in the unit.  It will take approximately 25 to 30 years for each well to cease production in paying quantities. You can search the website archived discussions using the word decline and find numerous discussions.

Permalink Reply by Weto on March 3, 2011 at 9:18

Price of Natural Gas also has a lot to do with the decline. I have also found that CHK will sell the gas way below the well head price, which I do not understand how the get away with this.

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