Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 4, 2014 at 1:45

All major Haynesville operators are drilling CULs in all the play parishes.  CULs probably account for 90% of new HA permits to drill and have for some months now.  It's not rare, it has become the norm.

Permalink Reply by Doob on March 4, 2014 at 5:14

adubu is correct. The evidence is in that infill wells to 80 acres show depletion. These wells see half the pressure of the offset wells, so the area is already being drained. Yes, some increased production will occur, and some higher gas price might justify it, but it would need to be well above $8.

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Permalink Reply by w.r. frank on March 6, 2014 at 8:29

Adubu, I agree with you, unfortunately, on NG pricing in the future.

Our problem in the Haynesville is the relative economics with 1) associated gas production and 2) the Marcellus dry gas window in NE PA.

Cabot, Range and others are getting monster wells with EURs in the 16B at less cost. Nobody is projecting those EURs even in the HA "sweet spot" (XCO is there) and also HA is higher cost. The highest EUR ever mentioned in HA was ECA and ,guess what, ECA doesn't  currently operate a single rig in the HA ( I predict ECA and Shell exit the HA if a buyer could be found). Shell cancelled its GTL project in LA and sold its interest in a LNG plant in Australia. Doesn't sound to good to me!

The only advantage I see for HA dry gas is the transportation differential to serve industrial/petro chemical demand on Gulf Coast (now and future), installed infrastructure and more friendly regulatory regimes in HA, Mexico exports and LNG export (which is in the future).

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Permalink Reply by adubu on March 6, 2014 at 8:44

w.r.frank-- think you got it right 

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Permalink Reply by Skip Peel - Mineral Consultant on March 4, 2014 at 2:00

Agreed.  The former CHK units may represent the bulk of the opportunities remaining to drill CULs.

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Permalink Reply by kittycatmama on March 4, 2014 at 3:28

I thought that a co. had to justify a reason for CUL. If I remember correctly, it was a big deal in south Bossier for EnCana to get right to drill a CUL.

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Permalink Reply by Skip Peel - Mineral Consultant on March 4, 2014 at 3:42

Petrohawk was the first HA operator to apply for and receive a permit to drill a Cross Unit Lateral.  The reason cited in that instance was the need to avoid a fault.  Petrohawk approached the mineral lessors and explained the geology and the well design.  The lessors and the professionals assisting them reviewed the data and agreed to support the application before the Commissioner.  This was about a year and a half ago or more.  Spring/Summer of 2012 if memory serves.  The CUL was approved as presented.  Since that time all the other active  HA operators have begun to permit CULs.  As far as I know, they make no attempt to justify the application based on geology.  What started out as an exception to the rule has now become the norm.

The operators favor CULs because they can stimulate and produce about 160% of the rock with a single well compared to previous well designs required to conform to the boundaries and set backs of the original one section, 640+/- acre units.  For them it's all about the lowest cost to produce an mcf.

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Permalink Reply by dominator on March 4, 2014 at 13:24

by reducing the number of wells from 8 to 6 how much reduction in total B's do you think that will amount to? are they accepting the fact that 6 should do the job? and that "in the core" we will still be able to get 80 B's? also, do you think Chesapeake or Petrohawk might try this?????

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Permalink Reply by Two Dogs, Pirate on March 4, 2014 at 13:36

As Shalegeo (Jay)  has said in the past, the 8 well units  are starting to communicate  with each other, so additional length between spacing may be needed between laterals. You may in the future see increase in production in 6 over 8 but I am not a geologist or PE.

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Permalink Reply by adubu on March 4, 2014 at 13:55

Skip-- does the  CUL help with getting nice N/S long laterals out of old weird shaped unit that was for Vertical wells HBP and today new units permitted are mostly nice rectangular unit longer length for N/S drilling laterals. 

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Permalink Reply by Skip Peel - Mineral Consultant on March 4, 2014 at 14:26

adubu, in regard to the Haynesville Basin the portion that is shale has very, very few historic vertical wells.  For that reason there is nothing to work around. No odd shaped Haynesville units to accommodate. Since the shale units are laid out based on sections they already nicely accommodate the N/S laterals.  Historically units are geographic (sections, half sections, quarter sections) in North LA and geologic, often called amoeba shaped, in South LA.  For decades a company drilled a well and then, if it was a producer, presented geologic evidence to support the creation of a drilling and production unit.  That process was abandoned with the shale as operators formed units based on sections and then drilled a well.  They convinced the regulators that the shale was continuous and productive over a wide areal extent.  In fact they got us all thinking that there was little variation over relatively short distances which is now proven inaccurate.  The cart before the horse approach had infrastructure being built in areas where no wells had yet been drilled.  And the expectation of "no dry holes" became widely accepted.

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Permalink Reply by adubu on March 4, 2014 at 15:24

skip--- i was just looking at all the old vertical units in East Texas that have shallow HBP leases that are now drilling the shale that require H today.  The La. history you just discuss interesting  

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