Replies to This Discussion

Permalink Reply by CB on September 14, 2010 at 10:29

Is that an exceptionally good well?

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Permalink Reply by ken hatcher on September 14, 2010 at 14:18

At 4$ gas how many will be around after mid 2011 when HBP Iis mostly completed?

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Permalink Reply by CB on September 15, 2010 at 7:49

Well, let me see. If it makes 3 BCFG X $4,000,000 X 60% (rule of thumb after royalty, severance tax, and operating costs) that leaves $7,200,000. I believe an average HS well including lease bonus costs more than that. I might be wrong. I don't believe any HS well has made 3 BCFG in one year because of the high decline rate. Maybe I'm missing something? We need the price to go up!

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Permalink Reply by CB on September 15, 2010 at 9:11

Could you list some of the many. I can verify on Sonris.

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Permalink Reply by Terry Johnston on September 16, 2010 at 6:39

I'm not sure where the individual production data came from, except perhaps for the last one. Production data is reported to the state by LUW code. Each unit has it's own LUW code. All the production from all the wells in a LUW code get dumped into the same pot.
The first three wells have a second well producing in the unit with them. the last example well is the only well in that unit. Also the production data companies get their data from the State.

The production shown for Serial # 238770 includes production for 239022 as well. In 1 yr 5 months the 2 wells combined have produced 3.3 BCF. (See production for LUW CODE 615515 and the wells in LUW Code 615515).
Same situation for 283381. Production also includes that from well 238544; 5.2 Bcf in 1.5 years from 2 wells. LUW Code 615456
Well 238585 production also includes 238222. Total cumulative, 7.8 BCF in 1 yr 8 months from 2 wells. (See LUW code 615398)
Ser # 238928 is the only well in that unit. 3.07 Bcf in 1 yr 3 months.

These are all super wells, but probably head and shoulders above the average well. The good news is there will be additional wells in those units, hopefully as good.

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Permalink Reply by The_Baron on September 16, 2010 at 7:04

PI Dwights breaks down to indivual wells. It is very handy. This info is made available by subscription only.

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Permalink Reply by Bacon on September 15, 2010 at 9:46

Search in the Thorn Lake field (8918). Just about all of the HA wells are doing at least that much or close.

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Permalink Reply by CB on September 15, 2010 at 10:09

I know there are really good wells. What do you think the average well makes the 1st year. I don't think most wells are that good. What were these wells production rate at the end of the 1st year?

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Permalink Reply by Skip Peel - Mineral Consultant on September 15, 2010 at 11:37

Companies invest in wells that they know will not make a profit. However that initial well secures their right to develop the BO and HA shales (along with any other productive zones depending on the depth rights of the lease) for decades to come (6 to 15 additional future wells depending on location) and hopefully will also be sufficiently profitable to cover the infrastructure required for that well. That same access road, well pad, pipeline connection and gathering system (sometimes including treating and compression facilities) will serve all the future wells . This is a one time investment that will pay dividends for twenty to thirty years at least. Once the price of gas dropped below ~$6.50 Mcf, this became a play for the companies that had substantial cash reserves, exceptional credit facilities and/or the ability to sustain a cash flow based on production that did not fully cover the initial costs to develop. Except for a very small number of operators, that economic model can not last. Without an increase in nat gas prices, the play will slow over the next year. The leading indicators, leasing and unitiization, have been signaling that decrease in activity for several months now.

Permalink Reply by Les Bamburg on September 14, 2010 at 14:46

Yes.

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Permalink Reply by P.G. on September 15, 2010 at 11:28

$4 gas is 100% better than $2 gas..

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Permalink Reply by CB on September 15, 2010 at 23:24

Very very well put Skip.

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