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Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2011 at 5:04

billy, the decline appears to be approximately in line with other HA horizontal wells based on the choke setting.  The Flowing Pressure does appear unusually low but I'll leave further comment on that to others with more experience in well operations and management.  It could very well be a typo.  As to when you can expect another well, that's up to Samson Contour.  For an operator with over 100 HA Units formed to date, SC has all of about 20 completed HA Horizontal wells.  And only 1 of those is an Alternate Unit Well (S30-14N-9W) completed in April, 2010.  It appears likely that Samson Contour never intended to play BIG in the Haynesville Shale Play.  Their actions seem to indicate that they were looking for a major JV partner or a buy out.  Of course SC and others with that strategy got blindsided by the steep decline in natural gas prices and the economics that forced drilling dollars into plays other than the Haynesville.  If I had to guess, I think SC will sit on all their Haynesville leasehold they can with the fewest wells hoping that the dynamics will change in the near future and they can get what they deem a fair price for their assets.  Considering their less than stellar history of HA operations, in your place I'd rather not have them drill any more of "my" wells. 

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Permalink Reply by Mac Davis on June 12, 2011 at 5:33

Have you looked at this page?

 

http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2...

 

It looks like production is declining steadily every month since it started producing.  If they're playing games with the production, they're putting in a lot of effort to make it look unintentional. 

 

Even if they are playing games with cutting back production, it's probably in your best interest for them to do so.  Wouldn't you rather have them hold onto your gas when prices are low and sell it when prices go up?

 

The last report in May was around 125,000 MCF/month.  With gas at $4, that's still $500,000 per month or $6 million per year. 

 

In theory, once there's production on most units, drilling will slow until demand rises or production slows and it becomes more economical to drill.  Even if demand doesn't go up, in theory, production in shale gas should decline fairly rapidly over a few years in each shale gas well. 

 

If anything, the gas companies are probably going to be more eager to drill than a smart mineral owner would be.  They're Wall Street/oil field cowboy types who are high rollers out for the quick buck.  Instead of holding back and getting more money long term, they've got to make the quick buck. 

 

I suspect that in a few years there will be a lot of drilling of additional wells in individual units, but it will be concentrated in the more productive areas.  When your particular section gets more wells is anyone's guess.

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Permalink Reply by Sylvester Deal on June 12, 2011 at 8:30

Billy,

I've studied the report provided by Mac Davis.  The Mar 15 test result of 4109MCF/d  on 19/64 choke is more in line with a tubing pressure of 2000psi.   Look better?

 

SD

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