I know that many people in Avoyelles signed with EOG and some signed with Halcon around the 2011 - 2012 time range and they had a 3 year lease with an option to renew after three years if the lease wasn't held by production. Well it's about time for the renews to start or possibly ,,,,, not. Is anyone hearing anything on that front?
In my gut I would think that the the Halcon wells in Rapides, the lower initial production rates of the EOG wells and the success in the eastern part of the play may have Avoyelles landowners not getting renewed under the contracted terms unless the greater oil maket dictates otherwise.
Any thoughts or news?
Dupuy Land Co 30H #1 $13,712,807
EOG's investment in the drilling and completion costs of their Avoyelles wells is likely close to $50,000,000.
I like eog. i'm over near mcnutt. almost surrounded by indigo, but was checkerboarded and I got left out. I tell the grandkids to wait for umo!
All good stuff. Or not so good. The problem seems to be the cost of hydraulic fracturing to get production in paying quantities from the TMS. Just how much does it cost a stage to frac one of these money sinks?
There doesn't seem to be a lot of wiggle room in vertical drilling costs or they would have found it by now and the stampede would be underway.
The Dupuy Land Co 30H has a lateral of ~6300'. The other three EOG horizontal wells around ~5000'. The completion costs for all four wells would be approximately half the total well cost. The costs are in line with or slightly better than average wells with similar Total Vertical Depth and Measured Depth. Cost is not the problem. Initial production and decline rate are the reasons EOG stopped drilling in Avoyelles.
Skip, do you remember the specifics on how EOG completed these? #'s of proppant per stage, stage spacing, clay stabilizers, where the well was placed in the formation? I don't recall...
It seems the operators have made lots of changes since these wells were drilled.
ATLG, the number of stages and the #s proppant would be included in the Final Completion report. EOG never made public pronouncements concerning rubble zones, clay related casing issues, etc. Did they experience those problems and not publicize it? Maybe. Did they have a different completion design that did not experience those problems: Maybe. The fact that they are not back in Avoyelles employing the widely reported and improved drilling and completion designs and instead are drilling in Vernon Parish tends to indicate that the science they generated from their early TMS wells informs the decision. The industry recognizes EOG as the most successful and one of the most experienced unconventional E&P companies. Discounting a limiting factor associated with their leasehold I think they would be back drilling in Avoyelles if they thought the drilling and completion changes would make commercial TMS wells.
For those who would like to compare the completion data that is available, here is a link to the WH-1 for the EOG Dupuy Land Co 30H which was the last and best TMS well drilled. See Page 2.
Skip, have you heard any indications on EOG Vernon Parish well or is it still a bit early to tell how its going?
I'm providing weekly rig reports on the well. You can follow them here:
Not true, public companies don't have to give well results. Only if result would have a material impact on the company/stock must they provide info and for a company the size of EOG the well will not have material impact. That being said, if the well is good and it convinces EOG to stay in the TMS, then you might get a mention during an earnings/conference/presentation call.
Actually, it depends on the terms of your lease and what the future might bring. Sometimes early signers win on the bonus, true, when an unproven area turns out to be a bust. Then again, if a productive formation is under the ground and it is eventually drilled, the holdouts might come out the big winners when they sign sweeter leases, as is now happening in certain ares near productive TMS wells. Word is by way of gossip, some of the landmen who were working for EOG and nailing down 100,000 acres, well, that block of leasing has been put on hold with those particular landmen being pulled off the hunt. So the flop could go either way. You are right.