Replies to This Discussion

Permalink Reply by Two Dogs, Pirate on August 22, 2010 at 8:49

I think giant flow rates put downward pressure on the price of natural gas. It has been a long time since any of the Big Boys have announced extremely high flow rates. In my opinion I think the IPs on many of the wells is just a fraction of what the well will do.

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Permalink Reply by Josh on August 22, 2010 at 9:03

I hear that there are a lot of wells being pinched back due to pipeline restrictions.

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Permalink Reply by Bsmit on August 22, 2010 at 10:03

A choked back well is not such a bad thing in the long run. Less production means less gas on the market which will lead to higher gas prices (royaltys) If most of the operators would follow the same practice. Lower initial flow rates generally mean longer production life of the well. More years of production at a higher price is not such a bad deal.

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Permalink Reply by Les Bamburg on August 22, 2010 at 12:03

Bud, yes - a well will produce a higher rate on a larger choke size. To get a better idea concerning this well one would need to know the flowing wellhead pressure also.

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Permalink Reply by Bud on August 22, 2010 at 15:36

The pressure reading I heard is 7000 psi, but I am not sure if this is the flowing pressure.

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Permalink Reply by Les Bamburg on August 22, 2010 at 17:30

Bud, at that flowing pressure the well could be produced on a slightly larger choke size and would probably produce around 10 MMcfd.

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Permalink Reply by L. Brent Moseley on August 22, 2010 at 16:50

Quit whinning and be grateful that you have one of the best operators in the area that knows how to prolong the production. I have interest in a well that after 11 months, has had little decline in production due to Petrohwk's choking it back. Do you want a 85% decline in the first year or a 45% one? They are forecasting 6 to 7 BCF out of my well in 5 years. Would you take that?

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Permalink Reply by Bud on August 23, 2010 at 1:34

Nobody is whining. I just started the discussion to better understand the production process. I actually have no interest in the well, but it is close to property in my family.

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Permalink Reply by L. Brent Moseley on August 23, 2010 at 5:02

My apologies. It is just that I see a lot of greed expressed on this site instead of gratitude that we have the good fortune to have an interest in certain plots of real estate that just happen to have valuable hydrocarbons beneath them.

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Permalink Reply by Mac Davis on August 23, 2010 at 14:00

Brent, there's plenty of reasons to whine. The O&G companies are acting like 19th century robber barons and have shafted a lot of property owners and continue to do so when they get the chance.

However, choking down a Haynesville shale well in early stages of production is probably in the best interests of the landowner, the O&G company, and the end customers as well. The only reason to really open the choke up early in production is for bragging rights or to pump up the stock price or inflate their financial estimates.

i.e. in this case, the company is doing the right thing by choking back the wells.

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Permalink Reply by Les Bamburg on August 23, 2010 at 16:07

Mac, the decision about initial production rates is more complicated as it involves generating the best economics for the investment. Each area is different as some are better suited to higher initial rates. Even Petrohawk acknowledged they will use different approaches for different regions of the Haynesville/Bossier Shale play. They also stated the approach would be adjusted if natural gas prices move above $6.00 per MMBtu since it changes the whole economic analysis.

So there are good reasons for the traditional approach of producing shale gas wells - the least of which would be bragging rights or stock price.

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Permalink Reply by Mac Davis on August 23, 2010 at 20:28

Even if what you say is correct, there's no ulterior motive for a small choke that benefits the operator and doesn't similarly benefit the landowner.

i.e. they're not choking the wells down to shaft the landowner.

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