Replies to This Discussion

Permalink Reply by Grillin' - MmmMmm on October 22, 2008 at 2:15

There were some studies done in the Barnett that related initial production over the first 2 months, peak rate during those 2 months and ultimate recovery (predicted). In that work it appeared that there was a correlation between the higher rates in the initial months and the predicted ultimate recovery. Since none of those wells have reached "ultimate" recovery, they were basing everything on what they had recovered over the first 3-5 years and then the predictions going out from there. So, yes, I believe these high rate wells will have higher recovery.

Makes mathmatical sense as well since the wells have such a high initial decline rate and a nice hyperbolic decline. Most of the companies are showing 3 decline curves, "base case", "high case" and "low case". The data from the wells will range in there somewhere. In the Barnett, as technology improved, those curves moved up. Since the HS is leveraging off of the technology developed in other shale plays, I wouldn't expect huge changes in the decline uncertainty range, but there will be some as the technology is "fit" to the HS.

Permalink Reply by Les Bamburg on October 22, 2008 at 3:29

SS, I wouldn't buy that "damaging the formation" bit as the information indicates Petrohawks' wells are well capable of the high flow rates. As I have previously stated the inital flow rates in the HS are more a function of lateral length and number/size of frac jobs.

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Permalink Reply by Spring Branch,mineral owner on October 22, 2008 at 13:41

Les B, without a doubt you are right about lateral lengths and size/number of frac jobs having a direct bearing on the intial and probably subsequent flow rates in the HS. What I am suggesting is there might be other issues at work and I'll try to give an example: Petrohawk's Hunt Plywood 36 #11 in 15/13 Section 36 had TVD of 11,435 and MD of 14,570' per Sonris. Surface location @ 1,097 FSL and PBHL@ 660' FNL section 36.
Chesapeake's Brenner Estate 6 H #1 in 15/14 Section 6 had a TVD of 11,578 and MD of 16,371. Surface location @ 125' FSL and PBHL @ 250' FNL.
A brief glance at the two wells would clearly indicate to me that the Chesapeake lateral is the longer of the two by a condsiderable margin. I have been told that the Brenner 6 had either an 8 or 9 stage frac and I would assume the Hunt Plywood about the same . The IP of the Hunt Plywood is 70 % greater than the Brenner Est well, @ 17 million cu ft/dAY VS. 10 Million cu ft/day. There is something other than lateral length and number size of fracs at wotk here IMHO. I have no clue what the difference is but eventually we'll find out. Your thoughts about this specific example?

Permalink Reply by Les Bamburg on October 23, 2008 at 9:14

Spring Branch, you may be right but because Chesapeake (and others) is still experimenting it is difficult too make too many conclusions at this stage. I know most of Chesapeake's early wells had 5 frac stages but later ones were being upped to 8 stages with more proppant. Petrohawk has used 9-11 frac stages with 2.5MM pounds of proppant which has contributed to the high initial rates. I think all the operators will continue to improve over the next 6 months as they learn more about completing the HS wells.

Permalink Reply by Les Bamburg on October 19, 2008 at 4:13

Skip, an example of how higher initial flow rates can have a higher initial decline rate is the Barnett Shale. Horizontal wells in the Barnett Shale have higher 1st year decline rates than vertical wells in the same area of the field.

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Permalink Reply by Spring Branch,mineral owner on October 23, 2008 at 15:44

Les B, as always your input is greatly appreciated. I know that Chesapeake has stated publicly that all future horizontal Haynesvilles will have long laterals, and a minimum of 8 stage fracs.

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Permalink Reply by Spring Branch,mineral owner on October 24, 2008 at 15:46

Les B , I have learned from a very reliable source that Chesapeake's newest wells: Walton 23 and Walton 14 which were fraced about a week apart using 10 stage fracs on both wells are flowing to sales @ the rate of 15-17 million cu ft /day. This would certainly indicate that the Chesapeake wells are every bit as good as the Petrohawk wells depending on the length of the lateral and size/number of the fracs, just as you said. The new starting point for the decline curve may be 15/17 million/day, rather than 10 million/day. Once again, thanks for your input.

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Permalink Reply by SharonB T18N R15W S8 on October 19, 2008 at 14:17

I'm glad you posted this, because this is what I was thinking too. Our HS has a higher decline rate because the gas is higher pressured and better to begin with.

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Permalink Reply by Robert Griffin R on October 20, 2008 at 7:06

Jay, by HZ well "commitment" do you mean a lease would contain a written commitment/clause by the lessee to the l/o lessor to drill a Haynesville horizontal well in the unit by such and such date or .... what? Lease is void or lessee pays lessor a $$$ penalty or lease is renegotiated with additional bonus money and/or higher royalty percentage? Would a lessee or operator agree to any such statement in a lease? My guess is no.

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Permalink Reply by Skip Peel - Mineral Consultant on October 20, 2008 at 10:45

Jay, do you think that any companies would consider a lease offer with no bonus, a HZ commitment and a bump in the royalty? Say, 26.5 - 27.5%? Maybe the bump would kick in after well payout. If high bonus amounts are stifling competition for some capable and interested operators, it could a nice option for land owners to consider.

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Permalink Reply by Robert Griffin R on October 20, 2008 at 17:29

Seems to me that since smaller lease bonus offers are already a given and not really a choice I would absolutely choose a fixed time period HZ well commitment. What might be the penalty or consequences if the lessee did not meet the terms of the commitment? The usual answer is spend your hard earned savings/wages on an expensive attorney(s) and possibly wait many months and still no positive outcome. Could a written commitment in a lease have any real teeth to force performance without having to go to court? If your lease was sold to another operator who has no money to drill or a large operator who simply ignores the commitment then doesn't the lease commitment loses its effect and intent?

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Permalink Reply by Les Bamburg on October 21, 2008 at 15:31

Your Honor, I admit it - I'm guilty. Just tell her to stop badgering me!!!

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