Replies to This Discussion

Permalink Reply by CRAIG TAYLOR on February 16, 2011 at 6:24

Skip- I am very interested as to what the total recoverable number may be-can you offer any input, given the current estimates!

Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2011 at 6:32

Craig, I believe the GIP figure can be derived with relative accuracy from the tests performed to date.  I am unsure if there is any reliable means to predict what percentage of GIP is recoverable short of producing the well.  However the EUR is always a relatively small percentage of GIP.  Since everyone wants to think of and discuss the Burkley-Phillip #1 as a Haynesville Shale well, the EURs here in NW. LA. the last time I looked were around 30% of GIP.  Maybe another member can post a more recent recoverable factor.

Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2011 at 7:07

This is an excerpt from an Aug. '08 Chesapeake release, I haven't found any more recent statements regarding the percentage of GIP that is considered recoverable from the Haynesville Shale in NW. LA.

 

From that gas in place, we estimate that we will recover about 52bcf per square mile through the drilling of 8 wells per sqare mile. This would result in per well avg recoveries of about 29% of the gas in place,

Permalink Reply by CRAIG TAYLOR on February 16, 2011 at 7:11

Thanks Skip-this is helpful

Permalink Reply by Paul M. Hess on February 16, 2011 at 7:37

Skip, was this based on fractured vertical completions which I suspect based on the number of wells per section?

Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2011 at 7:51

I would find that highly unlikely Paul.  Haynesville horizontal wells are allowed 80 acre spacing so eight wells per mile is the standard calculation used by all the operators.  I have never seen CHK base any report or statistics on vertical completions.  No company has ever publicly contemplated development based on vertical wells as they are not economic.  In NW. LA. all vertically drilled wells after about the spring '08 are HBP or fault related, or both.

Permalink Reply by The_Baron on February 16, 2011 at 8:50

I believe a good deal of the intial vertical wells were simply drilled to evaluate the potential of the rock. Some smaller operators did drill some to HBP.

Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2011 at 9:33

I agree about the early verticals, Baron.  However even CHK has drilled verticals in the last twelve months in the presence of faults where lease terms are approaching expiration.  In any case the number of verticals amongst the 1900 HA wells to date is a mere handful.

Permalink Reply by john goodday on February 16, 2011 at 9:58

What does the forum say about the MNLU press release regarding the well?  Should we be buying the stock???

Permalink Reply by jeff boler on February 16, 2011 at 11:20

I appreciate you posting Chesapeake's Data indicating their estimated recovery to be obtained via Louisiana well spacing and their reservoir management approach. I will try and file these numbers away for future reference, as having worked in the North Louisiana Haynesville Shale, it always sparks my attention.

 

However; I am not comfortable using the 'best guesses' from one company in one play as a means of estimating the amount of producible reserves obtainable from a different company/drilling approach, in a play that has many unique aspects. Chesapeake has absolutely know way of knowing what the ultimate recovery percentage of their North Louisiana Haynesville Shale will be. Exploiting gas shales via synthetic fractures is still in its infancy. It would be rather arrogant to think that one could predict how these wells will respond to time, depletion, or changes in saturations. The fractures may not even exist 15 years down the road.

Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2011 at 11:37

Jeff, I find the CHK report to be a good means to remind, or instruct, those attempting to evaluate the Burkley-Phillips #1 that EUR is always a fraction of GIP.  I used the Haynesville Shale as an example because MNLU has bandied the Haynesville name about from the beginning in an attempt to attract investment interest. So it's fair game in my book.  I do agree that the reservoir characteristics are likely unique to the Mississippi location.  And that there is insufficient data to make absolutely definitive pronouncements regarding EUR even as we approach 1000 completions in the Haynesville Shale Play.  The GIP numbers announced by MNLU sound great to those with little or no basic grasp of reservoir dynamics.  I think it is fair to remind them that only a relatively small fraction of that total is recoverable. 

Permalink Reply by Paul M. Hess on February 16, 2011 at 12:39

Thanks, Skip, I thought about that 80 acre spacing after my time to edit had passed. Still would rather get the average 6.5 B out of a vertical rather than having to do the laterals. But you do what you gotta to get the gas!

 

The biggest asset the Burke-Phillips has is the natural fracture system. Under high pressure, that should add reasonably to the recoverability, not to mention the added storage for the OGIP. However, the ultimate recovery will be impacted by decrease in fracture space and connectivity as the pressure declines during production. Wells that are artificially fractured in place of a natural system do not have the added storage "space" that natural fractures provide. Artificial fractures are filled as frac fluid is withdrawn by the hydrocarbons being released across the "new" fracture faces. After that initial flush, most of the wells experience a rapid decline in pressure and production. They may then produce for years at a low rate. Those wells fortunate enough to be frac'd into low porosity stringers and natural fracture systems will perform better for a longer period of time. I do hope they frac the vertical in the Burke-Phillips as that will at least, within the frac radius, provide added fractures with propant to help hold open the fractures as pressure declines and hopefully allow for better overall drainage.

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