I'm seeing 50-67% choke down on our wells.  Is anyone else seeing this type of activity?  As per Encana's web site they stated the following:

 

"Commitment to reduced pace of natural gas production Natural gas production was approximately 3.27 billion cubic feet per day (Bcf/d), 2 percent higher than the first quarter of 2011 and 5 percent lower than the fourth quarter of 2011. Encana is targeting capacity        reductions totalling approximately 600 million cubic feet per day (MMcf/d) gross before royalties compared to 2011. Half of this reduction is attributable to declining production through a reduced capital program and the other half is attributable to physical shut-ins or      otherwise curtailed volumes. There is a current weakness in market fundamentals due to an oversupply of natural gas and it is clear that a  continued reduction of drilling activity will be required to restore market balance."

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CHK didn't publish a statement, but their May check shouted that out to me.

same here

Go on sonris, and take a look at random wells.  You will get an idea if people are choking back or not.

Per Sonris apparently Encana in my entire section choked back most, if not all, wells anywhere from 10% to 70%+/-.

Frank,

In your May check was your price for gas a lot lower than normal? Please compare it to your previous checks on the price per mmcf....


Thanks

All of our wells have been choked way down... check reflected both that and NG prices. Hoping the current trend of increased NG price continues!!!

The short-term future looks bright, Bill R.  NG futures usually run in cycles and kinda bottom, historically, around Nov. (sometimes).

Of course, since a certain crystal ball is kinda predicting heavy hurricane activity in the Gulf this season per an exceptionally warm winter -- the speculators could gyrate NG quite a bit in the coming months.

Gonna be a bronco ride (IMHO), and we could see some profit-taking correction soon, but don't let it faze you because then there'll be yet another move up (we hope).

Maybe.

Kathy, your experience may be more related to conventional wells but there is no indication that resticting flow rates would have any impact on the future flow rates or ultimate recovery.  Natural decline rate would be reduced for restricted flow rates.

I will say that on the other hand of all of this, is that the Government (County) is sure 'Johnny-on-the-spot' when it comes to applying taxes to what 'may' be coming out of those holes someday! Even off of a couple of Shut-in wells that haven't produced in years(common?).

Since our family has been riding this 'O&G Bronco' for about fifty years now, we should be used to it, however since I have only be involved in it for about fifteenth years... I am still a Newby!!! I always joke with my two boys telling them that Royalty money isn't something to rely on, but more like 'free money' or money that you just happen to find on the ground!

Next question... I keep hearing that production is never the same after a well is choked, but what happens when they reopen a Shut-in that has been down for years? The family has several wells up in Rusk and Shelby Counties that have now been Shut-in for going on ten years (we get our annual $1 for them), so what happens in cases like that?

Bill R:

Yeah, my family's been is the O&G saddle for probably close to 100 years or more, going all the way back to the first "oil" boom in Caddo and Bossier Parishes in the early 1900's.

Yep -- my granddad just happened to be farming acreage in a good location.

So I'm guessing that O&G leasing, when it first came along, pretty much rocked every farmer's world back then.  Those ol' timey leases were somethin' else, cher.

And to keep a very, very long story short -- I have no clue as to the truth about how shut-in affects a well's production or a formation's pressure, etc. -- but I can say that the go-to philosophy which I tend to apply, in general, per the operators who've leased with us over the years and the ones which are still paying us royalty . . . is that they have more skin in the game than we do, so to speak.  In other words, I just assume that the operators are going to do what's best for their hefty drilling investments, meaning that they certainly want their wells to be as productive as possible for the short and long term.

That's my thinking.

And luckily for us, we have -- more or less -- reasonably good operators on our Bossier P. land holdings, in that most of our minerals were HBP-ed, way long before CHK came a callin'.  Also, in the other family tree of my rather large family holdings -- luck came our way per GHS when I fended off the crooked early CHK offers by the lyin' landmen/brokers and thus I never agreed to and we never signed a lease with CHK.  Yep, that acreage in yet another parish is still not under lease.

Did I mention how lucky we were/are?

'Course, a person kinda makes their on luck with hard work and honest effort and staying true to the core values that we were taught growing up way out in the country in the Purchase.  Yeah, we might've been dirt poor at times with no money, but we didn't lie or cheat people.  And we always tried to help those who were less fortunate than ourselves when we could.

Hope your shut-in concerns work out, Bill.

Take care. 

 





Lawsuit.

Yeah, that is the direction that many of the family members want to go... I have opted out of that for now, but it would be nice to free up a couple of our holdings that they have tied up under the wording of the original lease... adds up to about 1600 acres that is impacted by Shut-in's.

The one's up in Rusk and Shelby account for 720 of those acres and it would be really nice to free them up for someone else to have a chance to run some horizontals instead of the Shut-in Verticals that have just been sitting.

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