MARCELLUS VS HAYNESVILLE WELL ECONOMICS - GoHaynesvilleShale.com2024-03-29T08:13:00Zhttps://gohaynesvilleshale.com/forum/topics/marcellus-vs-haynesville-well-economics?commentId=2117179%3AComment%3A3618526&feed=yes&xn_auth=noVery good information on this…tag:gohaynesvilleshale.com,2016-08-13:2117179:Comment:36212042016-08-13T01:09:27.877ZJay Calkhttps://gohaynesvilleshale.com/profile/JayCalk
Very good information on this post. Prior to the latest petroleum industry decline the price of natural gas had to be $2.55/ tcf and oil needed to be $75.00/bbl for the break even point. There is so much borrowed money that fueled the shale industry throughout the US. Haynesville wells cost roughly double what Marcellus wells cost to drill and frack but there is double the production. Decline rate of Haynesville wells are still a guess and there have been several refracks that haven increased…
Very good information on this post. Prior to the latest petroleum industry decline the price of natural gas had to be $2.55/ tcf and oil needed to be $75.00/bbl for the break even point. There is so much borrowed money that fueled the shale industry throughout the US. Haynesville wells cost roughly double what Marcellus wells cost to drill and frack but there is double the production. Decline rate of Haynesville wells are still a guess and there have been several refracks that haven increased production. Unfortunately the facts are are there and with flood of natural gas on the market even with exports it's a tough market. Nice work, Doob. It has beco…tag:gohaynesvilleshale.com,2016-08-05:2117179:Comment:36201672016-08-05T21:21:47.560ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Nice work, Doob. It has become evident just how poor the recovery factor was in the early short lateral wells. The difference in 1.0 well designs/performance and 3.0 are significant. Using 1000 wells with likely ~900 representing 1.0/2.0 does not disprove the performance of 3.0. The data points are much fewer but try completions since June 2015 and see how that graph looks. </p>
<p>Nice work, Doob. It has become evident just how poor the recovery factor was in the early short lateral wells. The difference in 1.0 well designs/performance and 3.0 are significant. Using 1000 wells with likely ~900 representing 1.0/2.0 does not disprove the performance of 3.0. The data points are much fewer but try completions since June 2015 and see how that graph looks. </p> That's the story--and it's va…tag:gohaynesvilleshale.com,2016-08-05:2117179:Comment:36202702016-08-05T21:11:36.430ZDoobhttps://gohaynesvilleshale.com/profile/JohnRhodes
<p>That's the story--and it's valid, but it doesn't explain how a 2 BCF well can become a 20 BCF by doubling the length, increasing the frack etc. Because this post got me curious I just downloaded all the Haynesville production in San Augustine. The graph is attached here. the 50th percentile well is just over 2 BCF. 18 wells out of more than 1000 have made more than 7 BCF. About 100 (10%) might make more than 5 BCF in 15 years of production. The stats aren't much different in LA.</p>
<p>That's the story--and it's valid, but it doesn't explain how a 2 BCF well can become a 20 BCF by doubling the length, increasing the frack etc. Because this post got me curious I just downloaded all the Haynesville production in San Augustine. The graph is attached here. the 50th percentile well is just over 2 BCF. 18 wells out of more than 1000 have made more than 7 BCF. About 100 (10%) might make more than 5 BCF in 15 years of production. The stats aren't much different in LA.</p> The Kardell was a great well…tag:gohaynesvilleshale.com,2016-08-05:2117179:Comment:36199552016-08-05T20:42:35.564ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>The Kardell was a great well that Devon pulled too hard as evidenced by the 37/64 choke. They, and other operators, learned their lesson. If you wish to make your point you need to pick another well. I believe the IP announcements are factual. The EUR (<span style="text-decoration: underline;">estimated</span> ultimate recovery) is just that, an estimate. however there are rules on how companies derive that figure because total reserves are a key metric used in financial transactions. …</p>
<p>The Kardell was a great well that Devon pulled too hard as evidenced by the 37/64 choke. They, and other operators, learned their lesson. If you wish to make your point you need to pick another well. I believe the IP announcements are factual. The EUR (<span style="text-decoration: underline;">estimated</span> ultimate recovery) is just that, an estimate. however there are rules on how companies derive that figure because total reserves are a key metric used in financial transactions. The SEC is watching.</p> I do not believe the press re…tag:gohaynesvilleshale.com,2016-08-05:2117179:Comment:36202632016-08-05T20:31:49.993ZDoobhttps://gohaynesvilleshale.com/profile/JohnRhodes
<p>I do not believe the press releases because they have been exceedingly optimistic in the past and because they are not supported by data. Remember the Kardell well in San Augustine TX operated by Crimson? It tested at "30.7 million cubic feet of natural gas per day on a 37/64 inch choke with 6,824 psi of flowing pressure". It has produced 1.08 BCF in the six plus years since.</p>
<p>I have good assets in the Haynesville, and believe me I wish the fairy dust was real--but it is not.</p>
<p>I do not believe the press releases because they have been exceedingly optimistic in the past and because they are not supported by data. Remember the Kardell well in San Augustine TX operated by Crimson? It tested at "30.7 million cubic feet of natural gas per day on a 37/64 inch choke with 6,824 psi of flowing pressure". It has produced 1.08 BCF in the six plus years since.</p>
<p>I have good assets in the Haynesville, and believe me I wish the fairy dust was real--but it is not.</p> Doob and HBP: Would you buy…tag:gohaynesvilleshale.com,2016-08-04:2117179:Comment:36197932016-08-04T13:47:42.949ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Doob and HBP: Would you buy 22-24 Bcf per well by CHK in the Haynesville? I would agree that companies put the best spin possible on their press releases and presentations however anything beyond that assessment would invite investor lawsuits and/or questions from the SEC. If you're not keeping up with the impressive increase in IP and EUR in the newest well designs in all major basins you will continue to find these reports hard to believe. The following is from the Aug. 4 CHK…</p>
<p>Doob and HBP: Would you buy 22-24 Bcf per well by CHK in the Haynesville? I would agree that companies put the best spin possible on their press releases and presentations however anything beyond that assessment would invite investor lawsuits and/or questions from the SEC. If you're not keeping up with the impressive increase in IP and EUR in the newest well designs in all major basins you will continue to find these reports hard to believe. The following is from the Aug. 4 CHK presentation. I have added links to both the CA 12&13 - 15 - 15 wells for reference. The disparity between the IP in the state test and the IP reported by CHK is due to the extended length of time these long lateral wells take to "clean up".</p>
<p class="Default"><b><i>Transformational change in Haynesville Shale economics and well productivity</i></b></p>
<p class="Default"><i> ˃Extended laterals and optimized completions significantly enhance economics across the field</i></p>
<p class="Default"><i> CA 1 3,000#/ft. 10,000' Lateral $9.8MM 38 MMcfd 22 - 24 Bcf EUR</i></p>
<p class="Default"> </p>
<p class="Default"><a href="http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2?p_wsn=249493" target="_blank">http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2?p_wsn=249493</a></p>
<p class="Default"><a href="http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2?p_wsn=249494" target="_blank">http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2?p_wsn=249494</a></p>
<p> </p> Shale drillers produce more g…tag:gohaynesvilleshale.com,2016-08-02:2117179:Comment:36195992016-08-02T19:37:37.369ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p><b>Shale drillers produce more gas with less wells in 2015</b></p>
<p><b>By <a href="https://stateimpact.npr.org/pennsylvania/author/sphillips/" title="Posts by Susan Phillips">Susan Phillips</a> August 1, 2016 | 3:37 PM stateimpact.npr.org</b></p>
<p>Natural gas production in Pennsylvania is up despite a drop in the number of new wells. The Department of Environmental Protection released its <a href="http://www.elibrary.dep.state.pa.us/dsweb/Get/Document-113887/8000-RE-DEP4621.pdf">2015…</a></p>
<p><b>Shale drillers produce more gas with less wells in 2015</b></p>
<p><b>By <a href="https://stateimpact.npr.org/pennsylvania/author/sphillips/" title="Posts by Susan Phillips">Susan Phillips</a> August 1, 2016 | 3:37 PM stateimpact.npr.org</b></p>
<p>Natural gas production in Pennsylvania is up despite a drop in the number of new wells. The Department of Environmental Protection released its <a href="http://www.elibrary.dep.state.pa.us/dsweb/Get/Document-113887/8000-RE-DEP4621.pdf">2015 annual oil and gas report</a> on Monday, detailing such things as the number of wells drilled, locations, and inspections. The state’s shale wells produced 4.6 trillion cubic feet of natural gas in 2015, marking a continued increase since the start of the shale gas boom. This happened despite a drop in newly drilled wells. In 2015, shale producers drilled 785 wells, about half the number developed in 2014, which was 1,372.</p>
<p>The top three producers included Chesapeake Energy, Cabot Oil and Gas, and Range Resources. The top counties for shale gas production include Washington, Susquehanna and Greene counties.</p>
<p>The report also detailed the drilling activity for the Utica and Point Pleasant Shale Plays, which the DEP says could expand should the market for shale gas improve. Both of those formations lie beneath the Marcellus, and just 55 wells were drilled into those formations in 2015.</p>
<p>DEP also reports that while both conventional and unconventional well inspections have increased since 2008, the number of violations has decreased. For shale gas wells, 404 violations were issued by inspectors in 2015, compared to 1,280 in 2010. The number of conventional natural gas well violations more than double the number for shale gas wells, this despite far more unconventional than conventional wells.</p>
<p>The gas industry paid far less in fines during 2015. After reaching a peak of $7.1 million charged to drillers in 2014 at the end of the Corbett Administration, DEP issued a total of $3.4 million in sanctions in 2015. DEP investigations into water contamination through methane migration, yielded no findings of wrongdoing by the gas industry last year.</p>
<p>Industry and environmentalists reacted differently to the findings. The Marcellus Shale Coalition released a statement praising the collaborative efforts of regulators and producers.</p>
<p>“At the same time, while DEP’s performed a record number of inspections, overall regulatory compliance is at a five-year high and trending in the right direction,” said MSC president Dave Spigelmyer. “We’re also very proud that despite the Commonwealth’s unique geology and longstanding shallow methane-related challenges, there were zero stray gas issues in 2015, thanks in large part to the strong, common sense well construction regulations that our industry supported.”</p>
<p>Spigelmyer added that any new taxes could jeopardize that progress.</p>
<p>Maya Van Rossum, from the Delaware Riverkeeper Network, said the numbers don’t paint the real picture.</p>
<p>“The level of harm being inflicted by drilling and fracking on our communities and environment is not going down it is continuing to grow,” said Van Rossum. “You still see deforestation, you still see methane emissions, you still see the opportunity cost in that we continue to drill and frack instead of investing all that time and energy and resources into the clean energy path.”</p>
<p><b> </b></p>
<p> </p> Your welcome, Mike. The pipe…tag:gohaynesvilleshale.com,2016-08-02:2117179:Comment:36195682016-08-02T01:36:14.047ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Your welcome, Mike. The pipeline projects providing increased capacity to the Gulf Coast markets should come on line later this year and next. Then we will see if there is sufficient demand to support increasing that capacity. By then I hope that new markets for Marcellus/Utica supply to New England and the Atlantic Coast become possible. At the moment that is looking doubtful.</p>
<p>Your welcome, Mike. The pipeline projects providing increased capacity to the Gulf Coast markets should come on line later this year and next. Then we will see if there is sufficient demand to support increasing that capacity. By then I hope that new markets for Marcellus/Utica supply to New England and the Atlantic Coast become possible. At the moment that is looking doubtful.</p> I don't buy 22 Bcf UER per we…tag:gohaynesvilleshale.com,2016-08-01:2117179:Comment:36190552016-08-01T20:01:11.053ZHBPhttps://gohaynesvilleshale.com/profile/HBP
<p>I don't buy 22 Bcf UER per well at 5.3 Million. The economics may be better to some degree but not to that degree.</p>
<p>I don't buy 22 Bcf UER per well at 5.3 Million. The economics may be better to some degree but not to that degree.</p> Thanks for the observations,…tag:gohaynesvilleshale.com,2016-08-01:2117179:Comment:36190532016-08-01T19:54:33.608ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Thanks for the observations, Doob. I don't recall the Haynesville Shale operators that claimed a 6.5 Bcf average across all their acreage. By the parameters from the early days of the Haynesville Play 6.5 Bcf would have been a lower Tier One well. The problem with comparisons comes with the evolution of well designs. Data analysis from Haynesville 1.0 wells does not provide an accurate assessment of 2.0 wells and data from 2.0 wells does not provide an accurate assessment of 3.0 wells. …</p>
<p>Thanks for the observations, Doob. I don't recall the Haynesville Shale operators that claimed a 6.5 Bcf average across all their acreage. By the parameters from the early days of the Haynesville Play 6.5 Bcf would have been a lower Tier One well. The problem with comparisons comes with the evolution of well designs. Data analysis from Haynesville 1.0 wells does not provide an accurate assessment of 2.0 wells and data from 2.0 wells does not provide an accurate assessment of 3.0 wells. A number of companies have claimed significant increases in the amount of their acreage that is economic with each major improvement in well designs and the ability to drill longer laterals with HC wells. There should be sufficient data for the 3.0 HC wells this year and we will likely see some articles that provide an opinion of the accuracy of company EUR claims.</p>
<p>The bottom line for myself, and I think a lot of GHS members, is that Marcellus/Utica gas is considerably cheaper currently and that more of it is coming into the Gulf Coast market to complete directly with Texas and Louisiana production.</p>
<table border="1" cellspacing="0" width="100%">
<tbody><tr><td><p>Natural Gas, Marcellus NE PA, $ per MMBtu-I</p>
</td>
<td><p>...</p>
</td>
<td><p>...</p>
</td>
<td><p><b>1.440</b></p>
</td>
<td><p>1.460</p>
</td>
<td><p>1.400</p>
</td>
</tr>
<tr><td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr><td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr><td><p>Natural Gas, Haynesville N. LA, $ per MMBtu-I</p>
</td>
<td><p>...</p>
</td>
<td><p>...</p>
</td>
<td><p><b>2.640</b></p>
</td>
<td><p>2.710</p>
</td>
<td><p>2.780</p>
</td>
</tr>
</tbody>
</table>