Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 26, 2013 at 1:06

I understand, tony.  Just don't confuse the barrel price of WTI for a barrel of condensate when attempting to model well economics.  Especially at 62.9 gravity.  Previous SWN wells were in the high 50's.

Early L SMK wells had better gravities.  Brammer-Anderson Oil Watson Fullenwider 1 - 12H - 34 degree.  Cabot Denny 1 - 32H - 35 degree.  AIX Garrett L&T #1 - 47.5 degree.  I pointed out the significance of the gravity in some of our early discussions and speculated that the better SWN wells would have gravity close to 50.  That hasn't worked out.

Condensate in a gas well indicates the presence of natural gas liquids (NGLs).  Those NGLs can make a gas well profitable under depressed natural gas prices.  None of the L SMK wells to date have sufficient gas production required to make an economic well.

Permalink Reply by tony allen on June 26, 2013 at 2:47

Skip, You don't believe the WB is economic? No gas in that well. And the Dean well has gas with a high BTU. Neither of these wells are economic? Did SWN not acknowledge that the WB Exxon well was economic.? The worse case price of condensate seems to be a $17 discount to the WTI but Mueller stated they received a premium to the WTI. Did I read something wrong?

Permalink Reply by shale player on June 26, 2013 at 13:14

The Dean well is a very good vertical well but the Johnson was a duster?  You can't afford to develop this play with vertical wells with a 50% success rate, and remember, there is not infrastructure in the area so development cost need to consider the cost of gathering lines, processing, water handling, etc. 

If vertical wells worked SWN would be on that concept like flies on stink.  They are not because nobody really understands what is going on. 

Permalink Reply by obed w odom on June 25, 2013 at 4:38

From the allowables that SONRIS was reporting every week or so before the Dean was hooked up to the pipeline, the peak production seemed to be about 200 barrels per day, but no choke settings were given. 8/64ths seems very low for the choke setting, indicating a lot of potential, as does the 2959 psi of flowing pressure.

Permalink Reply by Big Little Oil on June 25, 2013 at 4:43

I think it's something around a 50% decline after three months of producing if the oil rate is any guage

 

I agree on the choke....thats a really tight choke and good pressure, may be a quite a while before they have to put on artficial lift.

Permalink Reply by tony allen on June 25, 2013 at 6:12

Mueller said in the November call the IP for the Dean was 200 bopd and 1.2 million mcf on a 10/64 choke. I did not see the BTU content but I think it was over 1200 BTU. Pages 4,11,12.

http://www.swn.com/investors/Press_Releases/2012/11.06.12.pdf

 

Permalink Reply by tony allen on June 25, 2013 at 7:25

I meant to say 1200 MCF. Sorry.

Permalink Reply by Skip Peel - Mineral Consultant on June 26, 2013 at 2:53

tony, comparing the gas production in the SWN L SMK wells to the gas production in the wet gas wells with which I am familiar, no the SWN wells are not economic.  If they were SWN would be busy drilling a bunch of them.

Permalink Reply by tony allen on June 26, 2013 at 3:10

The next 3 SWN wells are vertical wells as is the WLL and ANKOR wells. I am not trying to compare any of the BD wells with the wells you make reference to. I am just doing the math on the WB Exxon and the Dean vertical. SWN stated that the WB well would pass their economic hurdle. How do you arrive at the conclusion that the Dean vertical is uneconomic? 60% ROI in 90 days and still flowing. Reading the UMI post on GHS, I have read that many HS wells will never pay out. It looks like the Dean is approaching pay out status. Correct my thinking on this, please.

Permalink Reply by Skip Peel - Mineral Consultant on June 26, 2013 at 3:16

Vertical wells are fine for tests.  They will not have the life span to result in acceptable EURs.  The Dean metrics don't convince with me at 62.9 degree gravity.  Has SWN stated their well cost on the Dean?

Permalink Reply by tony allen on June 26, 2013 at 3:38

I don't believe they have disclosed their well cost on the Dean but Enerquest drilled  a well to 11000 ft with an AFE of 1.7 million in the Chalybeat  Springs unit. I also know that the Sanders Heirs well was drilled to the salt and their AFE was less than 2.5 million. I used these numbers for comparison purposes. Maybe I am wrong to do so. 

How can anyone know the productive life span of the Dean well?

Permalink Reply by Skip Peel - Mineral Consultant on June 26, 2013 at 3:54

Using the cost of those other wells is highly speculative especially when they are not L SMK wells.  Vertical wells in tight, unconventional reservoirs never have significant life spans excepting something unusual such as the possibility that the EXXON-MOBILE #2 drilled into a zone of high natural fracturing.

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