Replies to This Discussion

Permalink Reply by Elizabeth Netterville Coleman on December 28, 2010 at 7:57

I am not an energy professional, but my family has an interest in this well and other lands nearby. I am curious about what happens next...one report mentioned that this would be a vertical well. Other drilling reports state that there are about 150+ drilling days ahead. Does this mean that they are going to drill horizontally next? I have learned alot from reading your posts and hope that it is okay to ask these questions.

Thanks.

Permalink Reply by WilliamW on December 28, 2010 at 8:27

My understanding is that the well is solely horizontal and according to the previous post reached total depth of 22,000' two days ago. The 150 days reported for drilling is apparently total elapsed time required to drill the well.  Remaining activities are well logging, the installation of casing,  testing and cleanup.

 

I hope that the well is a resounding success for you and your family sake and wish you and yours Happy season Greetings.

Permalink Reply by Les Bamburg on December 28, 2010 at 8:34

William, I assume you meant soley "vertical".

Permalink Reply by M Pevonka on December 28, 2010 at 8:31

Elizabeth-- 150 days drilling ahead simply means that they have been drilling for 150 days and that they are continuing to drill. That, however, is an old report. They reached TD (target depth) on Dec. 26. This is a vertical well, so they will not be drilling horizontally from here. Having completed the drilling phase, they will log the well, then frac (if that's what they're going to do) and complete.

Permalink Reply by Elizabeth Netterville Coleman on December 28, 2010 at 8:47

To the Energy Professionals:

I truly appreciate your helping me to understand all of this. I know that all of you must enjoy this field...it is quite exciting!!! I wish all of you a Happy New Year's as well!

Many thanks,

Elizabeth

Permalink Reply by jeff boler on December 28, 2010 at 8:50

After following this project from before spud, I don't believe that Nick Atenico would have engaged in such an interview without having first received promising results from Core Laboratories. He made some powerful statements... 

He stated that MNLU would be fracking at around 20,000 ft [TVD], but given the context of his statement, and the nature of their conversation, I believe that this is a rounded number (I don't think that he was indicating 20000.0000 ft). 

I wonder how long it will take them to line up a frack-job??? I would suggest delaying as long as possible, in the hopes for higher gas prices... You only your IP once.

Permalink Reply by Wilmer Sparks on December 28, 2010 at 10:01

I would say quiet the opposite.  With as much publicity that this well has generated, they have to get this well online as quickly as possible to show the investors and all potential future investors a successful result.

Permalink Reply by jeff boler on December 28, 2010 at 11:28

I'm not disagreeing with you, but that could be quite a price tag to pay for those investors. If they waited until more favorable gas prices, those investors would be all the more interested, plus the increased revenue that it would generate for MNLU. Nick Atenico's interview indicated to me that the project was only profitable at natural gas prices above $5/MCF... I can't balance a checkbook much less decide the best path forward for such a company. The more and more I look at the recent PR, the more and more it looks like it might be bad news...

Permalink Reply by FXEF on December 28, 2010 at 13:19

Six months of drilling plus completion cost will make the Burkley-Phillips #1 much more costly than a traditional Haynesville well.

IMO, the Burkley-Phillips #1 will need to come in at a very high IP to be a successful project. If in fact it is a barn burner, MNLU can take advantage of their lease hold and move to other wells, otherwise they just have an expensive, deep, vertical gas well.  

Permalink Reply by Buck Marshall on December 28, 2010 at 16:18

The projections I've heard on production are 20 - 25 million, with 20K mcf a day being the lower end of the range.  Thats 600K mcf a month.  At $4/mcf that comes to 2.4 million a month.  After paying landowner royalties, they'd have roughly 2 million a month.  Thats 24 million a year off of this one well. 

 

Whether or not 20,000 PSI is a reality and 20K mcf/day is a real production potential remains to be seen.  But Chevron logs showed that PSI and higher. 

 

I don't see how 24 million a year isn't economically viable.  The cost of the well is close to 14 million, not 8.5.  So the company has to spend 14 million to get a well worth 24 million a year.    I'm comfortable with that cost/benefit ratio.  I expect Guggenheim is comfortable with it too.

Permalink Reply by Les Bamburg on December 28, 2010 at 10:30

Jeff, just remember the context of Nick's statement.  He was responding to the interviewer's question regarding concerns about fracture stimulation.  His answer was to make the point that any "fracing" would be occurring at a very deep depth.  

Permalink Reply by jeff boler on December 28, 2010 at 10:47

I agree, That's exactly how I interpreted it...

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