Replies to This Discussion

Permalink Reply by MB on April 11, 2009 at 14:16

Skip, appreciate the helpful and thorough breakout. Respectfully, MB

Permalink Reply by lanadan Ds3 on April 11, 2009 at 22:03

MB,

Go to: www.haynesvilleplay.com/2009/03/decline-curve.html

Click on full color graph for a good visual of the info that Skip has presented.

ALSO: please note (among other interesting data) the EUR (Estimated Ultimate Return) of these wells!

FURTHERMORE: On a 10.0mmcf/d the F&D is just a buck/63 cents !!

As the little German dude on the old "Laugh-In" show used to say, ". . . very interesting. . . "!

Your thoughts?

Permalink Reply by MB on April 11, 2009 at 23:57

Lanadan,
I think my own "learning curve" is a mirror image of the HA decline curve. Thanks for the amplifying info.
Best

Permalink Reply by Spring Branch,mineral owner on April 12, 2009 at 3:00

your link doesn't work, Lanadan Ds3. Better stick to "law", KB.

Permalink Reply by Spring Branch,mineral owner on April 12, 2009 at 9:42

KB, you don't allow a "reply to this" after your posts so I have to reply to my own post. Today is the first time that I have heard anyone say a word about "exponential decline" in the Haynesville. From inception till today, every operator that I am familiar with has referred to the decline in the Haynesville as being "hyperbolic". I guess I just missed the "rumor". You're the best! Keep teaching me.

Permalink Reply by lanadan Ds3 on April 12, 2009 at 21:36

Well then, don't know why, but just Google: 'haynesville shale decline curve" and you will see the correct link (www.haynesvilleplay.com etc.). I think it is the 3rd or 4th from the top of the list. Same conclusions, however, 81, 34, 22, 17, 13, 11, 9,8,7, and so on for % of decline per year.

Permalink Reply by Frederick O. Humke on April 11, 2009 at 8:24

From what I have read, Chesapeake is intentionally suppressing some production this year because of low prices and in some cases because of pipeline capacity. At the same time, Regency Gas is still moving ahead to double capacity (two 42 inch pipes in parallel) from the production unit. My guess would be that they plan to drill more wells (there is only one now) and increase production from the unit when prices get back, which they must interpret to be in the near term, like several years.

Permalink Reply by Skip Peel - Mineral Consultant on April 11, 2009 at 8:38

Chesapeake has shut in 7 or 8% of their system wide ng production. All in Oklahoma. If they wish to continue drilling wells, and they must do so to maintain leases with no existing production, it is imperative that they turn their new wells to sales quickly as they are developing their leasehold on cash flow. It is inefficient to build infrastructure to support a single well. With the steep decline curve of HS wells, they gotta drill baby drill. Even at depressed prices. Just my opinion.

Permalink Reply by Alan on April 12, 2009 at 5:39

You must also understand that no royalties are going to be paid until all the unit title opinions are complete and the company is satisfied that you are indeed the mineral owner. Exceptions to this would be if your lease has a royalty payment clause with some sort of specified time limit for payment. Speaking from the landman side, I know a vast majority of wells are still shut in waiting on pipeline. I talk with the crews buying the right of way daily and they just cannot get it bought fast enough, not to mention the usual slow down of landowners outrageous price demands and long drawn out negotiations. Then if negotiations are unsuccessful, there is the drawn out court condemnation process. So sit back and enjoy the ride and look forward to that nice first check which should be a pretty healty one since it is the one which will contain all back payments due if the well has been online.

Permalink Reply by MB on April 12, 2009 at 9:27

Jim,
Haven't titles already been researched by an o/g company attorney when a lease is signed, accepted, bonus paid, filed, etc? How would one determine title deficiencies if already reviewed prior to accepted lease? TIA

Permalink Reply by sesport on April 13, 2009 at 2:42

MB - I'm aware of a group that was signed and before the ink was dried the m/o's were then told what their title deficiencies were (ie. mortgage subordination needed, to include HELOCs).

Permalink Reply by Jimmy Dale on April 12, 2009 at 10:11

Where does the law specifiy that royalties must be paid within 90 days of first production?

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