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Permalink Reply by Skip Peel - Mineral Consultant on December 20, 2020 at 9:44

Allowables once were of some significance.  Here is the LA DNR glossary definition:  Allowable - The daily rate of oil or gas that a well is permitted by state authorities to produce during a given period.

The concept of allowables was a part of early conservation regulations where high production rates threatened recoverable reserves through the rapid decline in formation pressure.  Think the Black Giant, Kilgore TX in the early 1930's.  The Last Boom is a great book and a true accomplishment in making technical O&G issues a page turner.  I highly recommend.  In addition to rapidly declining formation pressure threatening the percent of recoverable oil, the "rule of capture" created a wild west competition with far too many wells in far to close a proximity.  In addition to well spacing requirements, allowables were meant to assist in "conserving" the oil that could be recovered.  Like all other oil fields of the day, the Woodbine had high porosity and permeability.  The Haynesville Shale does not.  In theory the area of capture for Haynesville Shale wells is a cylinder of approximately 300' diameter along the length of a perforated lateral.  Obviously this is arbitrary but it is how the DNR/OOC has chosen to mandate minimum spacing distances.  Haynesville operators do not deliberately wish to frac out of their landing zone in the vast majority of cases.  Too much risk for unintended consequences:  loss of pressure, tapping in to high formation water concentrations, Interfering with adjacent well laterals, etc.  The concept of well allowables just doesn't have any real purpose in "unconventional reservoirs".

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Permalink Reply by Skip Peel - Mineral Consultant on December 21, 2020 at 10:02

‘Skip,

 I was told you noticed some discrepancies in the allowable assignments for two wells (possibly others). This situation is occurring because we are currently in our semi-annual allowable adjustment period which we refer to as our “turnaround”. The Shreveport District has over 10,000 wells which are reviewed and then adjusted depending on reported production capacities. But to further answer your question, with these types of the wells the sum of all production will be designated to the Unit well for that particular LUW.

 For example, you will now find that the capability for LUW 616042 is reported under SN-240354 while SN-251753 will now show an allowable of 0. For the next couple of weeks you may run across other examples of unadjusted allowables but hopefully they are all soon corrected. These allowables can be helpful in two ways: one, you can see what a unit is capable of by looking at the unit well’s sum total of all allowables; two, you can see what an individual well is capable of by looking at the estimated potential for that well.

 I hope this helps explain some of what you are seeing. If you have any further questions, please let me know. Have a great day.

 

Patrick

Here are the 2 wells used as examples in the question.  If I understand correctly, one must go to the unit well to determine the allowable for a given unit.  Is that correct?

 Well Number   251754

WELL ALLOWABLES

EFFECTIVE DATE	END DATE	LUW CODE	LUW TYPE CODE	ALLOWABLE	ESTIMATED POTENTIAL	CURRENT ALLOWABLE TYPE
01/01/2021	06/30/2021	617915	2	0	12083	3
01/01/2021	06/30/2021	617192	2	7916	7916	3
07/01/2020	12/31/2020	617192	2	0	7916	3
07/01/2020	12/31/2020	617915	2	0	12084	3
01/01/2020	06/30/2020	617915	2	0	11965	3
01/01/2020	06/30/2020	617192	2	7838	7838	3
10/15/2019	12/31/2019	617915	2	0	11965	3
10/15/2019	12/31/2019	617192	2	7838	7838	3

 Well Number   251753

WELL ALLOWABLES

EFFECTIVE DATE	END DATE	LUW CODE	LUW TYPE CODE	ALLOWABLE	ESTIMATED POTENTIAL	CURRENT ALLOWABLE TYPE
01/01/2021	06/30/2021	617192	2	4658	4658	3
01/01/2021	06/30/2021	616042	2	12342	12342	3
07/01/2020	12/31/2020	616042	2	0	13068	3
07/01/2020	12/31/2020	617192	2	0	4932	3
01/01/2020	06/30/2020	617192	2	0	4825	3
01/01/2020	06/30/2020	616042	2	0	12785	3
10/15/2019	12/31/2019	617192	2	0	4825	3
10/15/2019	12/31/2019	616042	2	0	12785	3

 

Yes, sir. That is correct. You will find that these two have been corrected to show the proper amounts now. There are many others that we need to adjust over the next couple of weeks and then they will reflect proper amounts as well.

 

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Permalink Reply by Steve P on December 21, 2020 at 12:39

ah, this makes sense.  thanks.

I assume Patrick works for Conservation?

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Permalink Reply by Skip Peel - Mineral Consultant on December 21, 2020 at 12:47

You're welcome.  Yes, Patrick works in the Shreveport District office.  And occasionally presents at the annual NARO-LA conferences.

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