Replies to This Discussion

Permalink Reply by phaco on September 15, 2008 at 6:35

I believe the unit size is regulated by the state.

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Permalink Reply by David Porter on September 15, 2008 at 7:16

You are correct. In north Louisiana, Hosston, Cotton Valley units and now the Haynesville are set by the state as 640 acre units on section lines.

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Permalink Reply by qwert on September 15, 2008 at 8:07

The size is "regulated"only in the sense that the commissioner considers the unit application by the company. The company requests a unit and designates the size. An administrative hearing is held before the Commissioner to consider the unit application, including the size. The commissioner then makes a determination to adopt, reject or modify the unit, including its size. An aggrieved landowner can then appeal this decision to the State District Court. There is no "law" that says units have to be 640 acres. CHK, HK and the others would love people to believe this, but it ain't so. Units in the Barnett usually run from 80 acres to 250 acres, with some exceptions.

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Permalink Reply by Ron Jon on September 15, 2008 at 8:45

You fail to mention/realize that the Barnett units are undersized and as a result those surrounding property owners excluded from units are being drained by adjacent units.

I’m not arguing that they can efficiently drain 640 because I don’t know, but I’d bet they can easily drain an area larger than 300 acres (depending on the length of the lateral.

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Permalink Reply by qwert on September 15, 2008 at 9:14

I'm not a petroleum engineer or geologist familiar with effective fracing distances through shale, but my point is that these E&P companies are getting 640 acre units quietly approved so they can indefinitely hold by production massive amounts of acreage that are not being drained by the single well drilled in the unit. These units are not based on geology...they are based on the absence of any opposition because people do not realize the long term consequences of their property being indefinitely held by production. If one well could effectively drain 640 acres, why is CHK planning 80 acre spacings on their wells when the play is fully developed? The companies are currently section hopping with their rigs just to hbp the entire section/unit, and that's what they will be doing for the foreseeable future. Even with today's fracing technology, they leave a whole lot more gas than they get out of the rock. Drainage is not the problem -- taking property out of commerce (from a leasing standpoint) is the problem.

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Permalink Reply by Ron Jon on November 11, 2008 at 7:51

That is absolutely the case; however, until the field is well into development it is hard to pinpoint the area effectively drained. The more holes they drill the more they will figure out. They are going to try and hold as much acreage as possible with as few wells as possible.

From the landowner's perspective, I wouldn't really have a problem with a 640 but I wouldn't want the pool to get much larger.

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Permalink Reply by Robert Griffin R on September 19, 2008 at 16:43

Ron,

"surrounding property owners excluded from units are being drained by adjacent units" What?

Are you saying that lateral horizontal lines for Barnett wells can or do run outside their unit boundaries and beneath properties in other units thus draining gas from those properties? Is that legal? I thought that 4000' to 5000' ft laterals in 640 acres units were required to justify the cost of these shale wells?

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Permalink Reply by Ron Jon on November 11, 2008 at 7:53

look into the use of rule 37 in the Barnett; then let me know if you still think folks are not getting drained

They have owners within the unit excluded under Rule 37. Now, that was there choice, essentially opting out of a unit. This is how TX accomodates for the lack of force pooling. A problem we don't have in LA; however, here in LA we are at the mercy of the Commissioner of Conservation.

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Permalink Reply by The_Baron on November 11, 2008 at 9:03

Except when you are force pooled you still get your royalty.

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Permalink Reply by Ron Jon on November 13, 2008 at 6:02

exactly my point

Permalink Reply by mekat on November 19, 2008 at 13:17

Wells cannot be completed outside their boundaries and have a minimum standoff from lease or unit oulines. Also, shales are so tight they can only effectively drain for a few hundred feet (closer to 100'). But they are hydraulically fractured. In theory these fracture treatments stay on the lease, but sometimes they don't. When they don't, they aren't very effective in shales, but that can't be helped. Some wells are always better than others. The wells are not commercial without these frac treatments.

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Permalink Reply by Kojikabuto on September 15, 2008 at 3:15

Actually, they're many reasons. The biggest at the moment is the lack of raw material needed to actually frac these wells.


It is that simple...... not an opinion, it's a fact.

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