Parker, using CHK's type curve, which seems to require a 14 million/day IP to equate to a 6.5 B EUR, all the wells in the play will not have that 6.5 B EUR, because they don't have a 14 million IP. That is offset by the fact that some wells in the play will have greater than a 6.5 B EUR. Hopefully the $4.00 price turns out to be conservative over the next 20 years.
Are your calculations based on 1 well, or on more than one well per section?
Be careful about what you do with your estimate. If it's $80,000, but payments are spread over the next 20 years, the "present value" is a lot less.
Things have been so uncertain recently with fluctuations in natgas price, production curves, pipeline considerations, politics, regulation, LNG imports, oil prices, proposed new gas uses, carbon tax, etc., that almost anything is a wild guess. Don't forget that oversupply may cause a "double dip." The production company may cut back production, and your price per MCF drops as well.
Don't put too much of your financial future into any particular bet on natgas.
Great. There are far too many people who have already spent their shale money before getting a check. Or the people who signed big lease offers, got fake "checks" and then ended up with nothing when the companies reneged.
I'm dreaming, too, but haven't told the boss to "take this job and xxx it" yet.
I have tried it out.Comes up with a higher number. It calculates the totals differently though, the rate of decline is different in PA. I saw Chesapeakes latest chart showing decline rates it looks like production is under '1' by the 3rd year that's faster than I thought. Fun to dream though.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More