Replies to This Discussion

Permalink Reply by BirdDawg, plain ole' idiot on September 12, 2008 at 14:42

Spring Branch,
Good anology!

• ▶ Reply

Permalink Reply by BirdDawg, plain ole' idiot on September 12, 2008 at 14:41

Oil Neophyte,
Surely you are kidding. This is the oil industry, not the vacuum cleaner business. Just my opinion.

• ▶ Reply

Permalink Reply by CR on September 16, 2008 at 4:54

It works like this. When the well is fractured it is first perforated with a pipe impregnated with explosives called a gun. This puts small holes and cracks in the shale. Many of these guns are lowered down in a vertical well or pumped down in a horizontal well and detonated at different places within the shale. Then water and sand are pumped into the hole under extreme pressures. This causes the shale to fracture or frac as it's known. One fracture can run over a mile with many smaller fractures running off of it. The fracturing can cause dozens of these long cracks to form and when they do the frac sand and water fills them which causes more cracks or fractures. This chain reaction will continue to occurr depending on the pressure of the frac pumps. This is when the shale releases the gas that is trapped within it. When this happens the well will "come in". The gas will follow the sand like a sponge to the well bore and then to the surface. It is possible for a driller to create several "horizontal legs" into the shale from one location or well. They will fracture all the legs and this will create massive amounts of gas pressure at the well head. Most of the time they will put plugs in the well bore after perforation to restrict the farthest frac zones from producing until a later date in which the plugs will be removed. The well in Elm Grove only has one horizontal leg and is producing 16.8 mmcf on a 28/64 choke. (64/64 being wide open) So when someone tells you a HS horizontal well will play down to 70% in one year? They need to do more studying on how a horizontal shale well works. Not everyone can create a well as I described. It takes a lot of time, know-how, and money but this is an example of the ultimate Haynesville well and yes, there are a few. When we get pipelines that can handle the pressures there will be quite a few!

• ▶ Reply

Permalink Reply by Les Bamburg on September 16, 2008 at 8:35

CR, for your information. Decline curves for Barnett Shale horizontal wells.

Attachments:

• Decline Curves.zip, 385 KB

• ▶ Reply

Permalink Reply by CR on September 18, 2008 at 1:15

Thanks Les B. I should have said a Haynesville Shale well. The charts are great but they don't give any details on the configurations of the wells. How long are the horizontal "legs?" How many frac zones? The cost seems to be indicative of a one leg well. The Barnett is only comparable to the Haynesville in the way it has to be extracted. The Barnett is not under the pressures the Haynesville is. I'm told many Barnett wells are now on compressors due the fact that the formation pressures are much less. The shale is also different. I think it's a wait and see game over here. If they drill and frac like they say they are, it should be years before the pressures drop that fast. Maybe I'm being overly optimistic but I try to base my opinions on facts collected over these past years in dealing with various aspects of the business, especially the perf and frac aspects.

• ▶ Reply

Permalink Reply by Les Bamburg on September 18, 2008 at 9:38

CR, there are many factors in addition to pressure (and the loss thereof) that impact production decline. Because initial production comes from close to the fracture, the rate is high. As production continues over time gas is being drained further from the fracture and has to travel through more of the low permeability shale. We will learn more about the HS well decline rates over time.

My understanding is a typical Barnett Shale well has a +/- 4000 ft lateral with ~ 5 frac stages.

Permalink Reply by fireside on September 12, 2008 at 7:10

the six wells per section you mention, are these verticals or horizontals?

• ▶ Reply

Permalink Reply by Snake Stewart on September 16, 2008 at 15:44

Hey Les B,
With well costs in picture 1 being between $2.6 and $1.7 Million , wouldn't the data be somewhat skewed comparing a Barnett verticle with a Haynesville horizontal ? Thanks and have a good one.

• ▶ Reply

Permalink Reply by Les Bamburg on September 18, 2008 at 9:29

SS, I believe these primarily represent Barnett Shale horizontal wells given the cost and reserves per well. There are differences between the HS and BS so only time will tell how the HS wells will decline in flow rate.

• ▶ Reply

Permalink Reply by Snake Stewart on September 18, 2008 at 11:48

Thanks Les , I was just wondering from an economic standpoint how the well costs would be so much higher on the Haynesville VS Barnett. Some of the wells drilled over there are about 10 years old tho. Looking at what costs of everything else have done in the last 6 months , it makes one wonder how economically viable the Haynesville really is considering the present N/G market and costs associated.
Thanks again Les.

• ▶ Reply

Permalink Reply by jkw3 on September 18, 2008 at 14:44

Everyone seems to want to compare the Haynesville Shale to the Barnett Shale. Most are very, very optimistic in thinking that the HS will have more reserves than the BS. I truly hope they are correct. But let's look at the leasing that is presently taking place. In the newer areas where the neighborhood associations have been successful in rallying the homeowners there are some truly amazing leases being negotiated. However, in some of the bypassed areas the offers are much less impressive. In west Tarrant County (Fort worth) I am representing a client that has an undivided interest in 200 acres. North of the tract Encana has two wells. XTO has wells offsetting the tract to the east and west. Devon has a well to the south. All are horizontal wells in the Barnett Shale. Two years ago the highest offer was $250 an acre. Some of the owners leased - two different lessees took leases. I advised against leasing. Now one of the offset operators comes offering $5000/acre and 25 royalty. After months of negotiating I was able to get the offer up to $7000/acre. Better, but clearly not the reported $28,000 reported in other parts of the county.

I am not sure if this tract will be drilled, and that is probably the realization of the operators also so the offer is not "top dollar". There is production on four sides of the tract. Only one company is interested. The offer is 1/4 of what is reported on the other side of the county. What would you do?

The point is that some of the mineral owners in the Haynesville Shale will be bypassed. Those who think everyone in Caddo, DeSoto, Bossier, Sabine, Red River and Webster Parishes is going to cash in on this may be disappointed. There is a topic on this website focused on whether the companies have changed strategies and have moved from a leasing phase to a drilling phase. I believe that change in focus is beginning to be the situation here. Natural gas prices are down significantly ($13/mmbtu to $8/mmbtu) and the operators cannot justify unbridled leasing without more production. Unfortunately the revenue from that that production will be significantly less than what was forecast as late as June and July. The operators are in a Catch 22 of falling product prices v. their very optimistic investment in leases that must be protected.
No one wishes more than I do that the potential of the Haynesville Shale will be
realized. But, there are many obstacles to be overcome - shortages of rigs, casing and pipelines. Unless the commodity prices rise, drilling dollars will not be as plentiful. There is the possibility of a new administration that will not treat the industry as kindly as past ones. Some mineral owners will profit handsomely, but not all will.
Raise money through the stock market? Have you seen what has happened to the stock prices of Petrohawk, Chesapeake and others have done since July? Significant drops - Petrohawk down from the high 40's into the low 20's, Chesapeake from 66 to 39. Now may not be the time to float stock.
Again, I hope that the play doesn't slow, but there are a lot of reasons that the operators may be putting on the brakes.

If you want to know my bias - I am a Fort worth resident, an attorney and am in land management with an oil and gas exploration and production company.

• ▶ Reply

Permalink Reply by Bobi Carr ("parker") on September 18, 2008 at 15:14

Do you believe that either camp would be equally able to do this?

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• 4
• Next ›
• Page