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Permalink Reply by The_Baron on August 31, 2009 at 2:43

you have what you want at your fingertips. The IP is initial production. Your IP is 6100 mcf/day. For a normal well, pretty good, for a HA well, not so great. Excellent presure though. The more important thing than IP is how well it holds up over time, IMHO.


Wellhead prices have many varibles. Depends on operator and location.

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Permalink Reply by gregory richardson on August 31, 2009 at 4:19

Thanks ...

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Permalink Reply by Les Bamburg on August 31, 2009 at 3:13

Gregory, the information you provided for the initial production rate (IP) indicates the well may have been conservatively choked as the choke size (9/64") was smaller and the flowing pressure (8750#) higher than other well tests in the area. With a larger more typical choke the well may have produced in the 10 - 15 MMcfd which is a good rate. A conservative choke size should slow the initial decline rate.

The value of the gas is based on the purchase price paid when delivered into the gas sales pipeline less any allowable deducts in the field. The gas is not delivered to a port but simply flows to mutiple markets (in state, Northeast, Southeast, Midwest, etc) within the pipeline grid.

Bridas, Richardson Etux 27 #1 Well, Serial #239152, S27-T13N-R14W, DeSoto Parish

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Permalink Reply by gregory richardson on August 31, 2009 at 4:30

Thanks ...

1: All things being equal, is there a linear relationship between choke size and decline rates/volume - e.g. - would an 18/64 choke produce twice the volume as an 9/64? Is there someplace that I could look to better understand this?

2: If I understand your other answer, if our company (Beausa) has a fixed contract for, let's say, $6/mcf, then the wellhead price would be $6 minus allowable deductibles. Any additional moneys made (as an example, hedging profits/losses) would not be part of this. That being correct, how does one know if you are being paid the correct wellhead price?

Regards ...

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Permalink Reply by Les Bamburg on August 31, 2009 at 6:33

Gregory,

1) The choke curve is non-linear and closer to a square function. As the choke is opened to larger sizes the formation properties may become more of an issue and limit the flow rate. Also operators are careful to avoid the formation damage and limit the choke size.

2) My understanding is operators provide some information supporting the royalty calculation. This should include the pricing. Most gas is sold at a price differential to the NYMEX closing price for the month in question. You can compare to that to determine if the price is "in the ballpark".

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