My family owns part of this land and I was wondering if anyone knew anything about this?

The well has pulled substantially less than it did a year ago. I have tried to reach out to Prime Rock but I am not getting a response.

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Todd, I am not sufficiently familiar with AC decline rates so I'm posting the monthly production reports to date.  Maybe we can get an opinion from Rock Man.

LEASE\UNIT\WELL PRODUCTION

RPT DATE

LUW CODE

 

 

 

OPENING STK

OIL PROD(BBL)

GAS PROD(MCF)

DISPOSITION

CLOSING STK

PARISH

01/01/2022

052260

 

 

 

653

2553

10989

2842

364

VERNON

12/01/2021

052260

 

 

 

352

2994

11932

2693

653

VERNON

11/01/2021

052260

 

 

 

501

3076

12908

3225

352

VERNON

10/01/2021

052260

 

 

 

667

3395

15065

3561

501

VERNON

09/01/2021

052260

 

 

 

1323

3983

16533

4640

666

VERNON

08/01/2021

052260

 

 

 

814

5188

21942

4679

1323

VERNON

07/01/2021

052260

 

 

 

827

4741

19527

4754

814

VERNON

06/01/2021

052260

 

 

 

909

5224

21292

5306

827

VERNON

05/01/2021

052260

 

 

 

1402

5989

24184

6482

909

VERNON

04/01/2021

052260

 

 

 

1470

6485

25729

6553

1402

VERNON

03/01/2021

052260

 

 

 

519

7969

32542

7018

1470

VERNON

02/01/2021

052260

 

 

 

1169

8354

32515

9004

519

VERNON

01/01/2021

052260

 

 

 

633

11011

42253

10475

1169

VERNON

12/01/2020

052260

 

 

 

2142

14574

55589

16083

633

VERNON

11/01/2020

052260

 

 

 

1770

18400

65792

18028

2142

VERNON

10/01/2020

052260

 

 

 

798

20944

68413

19972

1770

VERNON

09/01/2020

052260

 

 

 

0

2312

8070

1514

798

VERNON

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From prior experience in the AC, this charts like a good (not great) older AC well - quick decline on oil with gradual increase of GOR and (although not tracked in SONRIS) the water fraction builds to fill the production void.

Marginal wells tended to have lower IP - if a bit of a higher IP the decline curve would be steep.

Would definitely want to hear from Rock Man given his access to well data.

Thank you -  mainly curious if the decline was due to government restrictions, economic concerns or just because the well is not the best and maybe this is normal?

thanks

Not sure what government restrictions or economic concerns would be but my first reaction is to agree with Dion.  The decline looks normal for a less than great AC well.

Definitely no government restrictions or similar production restraints in play here - Dion is dead on as to this being typical decline profile.

One needs to remember that these "unconventional" reservoirs produce like a large balloon losing air when you open it up - rate is very high at first but rate quickly declines over time as the pressure within the balloon decreases due to its losing air.

Frac stimulation in these unconventional horizontals both rubble-izes the matrix reservoir to release oil and gas plus also over pressures the formation (via the pumping / injection of all the frac fluid). This helps contribute to the higher rates once wells are opened up - but once this pressure is produced / drawn down, you get a much lower rate of fluid influx due to lower pressures pushing oil and gas into the wellbore.

The Austin Chalk in this part of the world has another factor that comes into play - formation water

  • Natural fractures in the Austin Chalk tend to be very water rich and can produce huge volumes of water over time. This water cannot be avoided.

In looking at this specific well, one needs to look beyond the O&G production volumes as noted above in this discussion.

Look at the IP test and periodic production tests posted in SONRIS.

  • IP was 1824 BO, 5400 MCF & 11,928 BW per day (9/2020). Huge water volume / only a 13.3% oil cut as to total fluid.

Subsequent production tests were:

  • 11/2020: 615 BO, 2333 MCF & 8525 BW per day (6.7% oil cut)
  • 4/2021: 301 BO, 1191 MCF & 8500 BW per day (3.4% oil cut)
  • 11/2021: 190 BO, 750 MCF & 4200 BW per day (4.3% oil cut)

Moving lots of fluid with very little oil. And high SWD costs (hopefully water going into a disposal well located near this well location).

Total production for this well as of Dec 2021 is 124,631 BO & 474,286 MCF.

  • Although no water production numbers are cited, I would estimate that over 1.5 million BW has been produced so far from this well.

Attached are two PDF's from ENVERUS - one shows the production thru Dec 2021 (on log scale) while the other shows a theoretical EUR projection for oil using the production decline profile so far.

Only about 71,500 BO left to produce in this well over a theoretical 30 year remaining well life (this well life is very optimistic - high water volumes and economics will probably kill this well in about 10 years if not less).

As a royalty owner, one will get some really good early monthly paychecks, but these will start decreasing immediately (assuming constant O&G prices) with an 80-90% decline over the first two year period.

After this initial screaming decline, production / royalty checks will flatten out at a rate equivalent to 5-10% of the initial check totals.

Attachments:

This is great information! Not what I wanted to hear ( haha ) but very good insight. Thankyou for taking the time to explain this.

You are very welcome.

Even with this scenario, royalties for 120,000+ BO plus half a BCF of gas over around 2 years is not a bad bit of mailbox money in today's price environment

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