Is Expand Testing Up-Spacing? Fewer Wells Per Section?
Over the course of the Haynesville Shale era operators have experimented with drilling fewer and longer wells. There is always the question of how much recoverable gas there is in a section and how few wells can be drilled to produce something close to the ultimate recoverable Gas In Place (GIP). Fewer and longer wells make it possible for operators to produce an mcf of gas for the lowest price.
We started the play with eight wells to the section. Then over time operators moved to six and then to five employing larger frack cylinders. This recent application by Expand Energy brings to mind the question of whether the company is experimenting with drilling one U-Turn well in a section with only one older version unit well. The spacing is curious and creates other questions. I'd like to hear opinions from our site experts as to what Expand is attempting here and whether this might be successful in recoveries that would make sense with so few wells per section.
I should also point out that Section 19 is "stranded". That means the EXE does not operate Section 18 to the north (Apex) nor Section 30 to the south (Comstock). So to me it makes some sense to try this approach in Section 19 - 14N - 15W. How might this change the dynamics for mineral lessors going forward?
https://sonlite.dnr.state.la.us/dnrservices/redirectUrl.jsp?dDocnam...
Views: 176
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant
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I am hoping this is an experiment limited only to stranded unit situations but would like to hear from Ryan and Rock Man. And any others with an opinion.
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Permalink Reply by w.r. frank -
I thought the 100' set back on the N & S boundaries was interesting?
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Permalink Reply by Hale Yayuh
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WAIT A MINUTE! How the heck are they doing this? Isn't it 330'?
As for what they are doing, I hate to see this but it doesn't surprise me, as I have commented on this very thing for years now, that they are almost always drilling 4-5 laterals/section rather than 6. But three? That is not good for mineral owners. The operator cares about the bottom line, the MO cares about maximizing ultimate production. Of course, the MO has pretty much zero control over this. I guess one could protest but that'll probably get you nowhere.
In this particular section, I suppose that sometime in the future, if gas prices were to get real high, it might dollar up to drill another lateral between the two legs of this u-lateral, because that is a pretty far spacing. It would be interested to hear from someone as to how far wide a frack can reach. It certainly has limits, else they would just drill one lateral/section!
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Permalink Reply by Skip Peel - Mineral Consultant
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Hale, this just another example of the state abandoning any regulation that the industry does not like. In this case, as in others, the 330' unit set back is a hold over from a by gone era of vertical wells producing from conventional reservoirs when drainage outside of established units was the concern. The state no longer appears to have that concern and only adjacent mineral owners care about being drained without being compensated.
The question regarding future infill drilling in cases such as this is one of how much rock can be stimulated with larger frack cylinders and how much gas an operator thinks was left behind and whether it is worth drilling more wells to recover in the future. If the volume of un-stimulated rock is not worth the cost of a future well or a re-frack, it will remain un-produced.
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It would surprise me if the state just ignores the 330ft setback rule that has structured the history of the HA shale thus far. I mean, I'm all for 100ft but it just seems odd. Seems that is just trolling for a lawsuit. I would think they could just amend the regulation to change it to 100ft. Why have regulations? Oh, I get it... this is the trump era. Just ignore laws.
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Permalink Reply by Skip Peel - Mineral Consultant
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The state may have the rational that more gas produced equals more severance tax revenue and they really don't care whose gas it is. 99% of lawsuits are a waste of time with a judiciary that knows little to nothing about the O&G/mineral business but knows that they are major donors to their election campaigns.
Its been a while since I touched on the subject but it bears repeating. Mineral owners have a decent winning record when suing O&G operators in state courts here in NW LA. The problem is a Second Circuit Court of Appeals that tends to overturn those rulings. And that problem has two roots. An appeals court where judges have little to no O&G/mineral law experience. And judges who are elected and beholden to the parties that fund their campaigns. Mineral owner have the votes to elect knowledgeable judges that are not behold to the industry but they are too apathetic to do it.
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