The Economics of the Longer Laterals
I have been hearing for some time that the economics of this play are going to usher in different scenarios then one may be accustomed to seeing. Because of the expences incurred from site prep and of course the shortage of equipment capable of drilling the horizontals, the longer lateral with multistage frac (12 & up) is the apparent future of shale play drilling in this part of the world.I understand its savings from an O&G perspective, but what about from a mineral owners perspective ? For example...............Permit info in care of Earlene. Thank you love.
The Peironnet 001 well, serial # 239339, API # 17017346980000. Caspiana Field , Permitted in Caddo Parish to CHPK actually covers S/29 of Caddo & ends up in S/20 of Bossier. The longest lateral to date that has been seen by the Pro's on this side of the fence. A true vertical depth of 11,876' and a measured depth of 20,000'.
Even tho Jay left me the keys to the Geo Department, I'm not a brainiac. This is going to floor my hottie wife but the facts are the facts. I am however capable of doing some 'rithmatic. If you subtract the 11,876' true vert from the 20,000' measured, that leaves a lateral of 8,124', or roughly a mile and a 1/2.
How exactly are they going to divy up the monies on this deal ? It appears to be 2 different units. Instead of 640 acres (roughly) to be divided amongst, it now appears that you will be sharing your royalty with another 640 acres. Am I looking at this right ? How will the taxes be split up ? 33% of the lateral in 1 parish and 66% in the other ? And I been hearing about paperwork headaches ? HA!
Maybe some were premature in their thoughts on wells being drilled in the middle of a section. Because thats exactly what is going to have to take place for this to happen.
I know this hasnt come to fruition yet as the well has just been permitted but I would certainly enjoy anyones insight on this matter.
P.S. Cannon has been rolled into powder room for short term dry storage. :-)
The Peironnet 001 well, serial # 239339, API # 17017346980000. Caspiana Field , Permitted in Caddo Parish to CHPK actually covers S/29 of Caddo & ends up in S/20 of Bossier. The longest lateral to date that has been seen by the Pro's on this side of the fence. A true vertical depth of 11,876' and a measured depth of 20,000'.
Even tho Jay left me the keys to the Geo Department, I'm not a brainiac. This is going to floor my hottie wife but the facts are the facts. I am however capable of doing some 'rithmatic. If you subtract the 11,876' true vert from the 20,000' measured, that leaves a lateral of 8,124', or roughly a mile and a 1/2.
How exactly are they going to divy up the monies on this deal ? It appears to be 2 different units. Instead of 640 acres (roughly) to be divided amongst, it now appears that you will be sharing your royalty with another 640 acres. Am I looking at this right ? How will the taxes be split up ? 33% of the lateral in 1 parish and 66% in the other ? And I been hearing about paperwork headaches ? HA!
Maybe some were premature in their thoughts on wells being drilled in the middle of a section. Because thats exactly what is going to have to take place for this to happen.
I know this hasnt come to fruition yet as the well has just been permitted but I would certainly enjoy anyones insight on this matter.
P.S. Cannon has been rolled into powder room for short term dry storage. :-)
Views: 52
Replies to This Discussion
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Permalink Reply by Two Dogs, Pirate on -
Go back and look at the Austin Chalk in Rapides Parish in the mid to late 90s. Units were damn near 2,000 acres. The mineral owners saw little profit from production. CHK was the main player, look at it today, some still HBP with trickel down payments. All guns pointed at CHK.
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Permalink Reply by Taylor on
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I'm anxious to see how this "pans" out. Thanks Snake and Earlene (you tha' woman!) for posting this. I was under the impression the units could only be 640 acres. Can they HBP two sections with one well? I would love to see the longer frac stages, but only within the boundaries of my section. That scenario has section 20 and 29 sharing royalties and I wouldn't want to share my royalties from good ole' section 20 with section 29. Chesapeake trying to p*ss everyone off or they just don't give a rip?
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Permalink Reply by Spring Branch,mineral owner on -
I had the same question/concern as the rest of you folks when I saw the permit for the Peironnet 29 with a MD of 20,000 ft. My mind raced off in all different directions and I quickly reached several erroneous conclusions as several of you have. I hurriedly made contact with a certain geologist friend whose name I won't mention, but who clearly is a "brainiac". I told him what I had discovered about the Peironnet 29 and "two sections" and blah, blah, blah. After patiently listening to me he said, "Give me a few minutes and I'll check it out.". In short order he got back with me to inform me, " this is a Section 20 well. The reason the pad is in Section 29 is because the southern portion of Section 20 is a horseshoe lake. Unless Chesapeake is planning on moving in a barge rig to drill this well, they had to move the pad to Section 29 to find some high ground. "I feel pretty certain that the perforations will only be in Section 20", he said. Look at a map! Pretty simple!
Mystery solved! Y'all are sure gonna miss him!
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Spring Branch,
Looking at the map this morning, yeah that makes sense. I'm glad you asked him. Please thank him for me. Why don't you ask him to come on back? Others and myself miss his input. Can't let silly misunderstandings run you off. Getting mad is fine. Not getting over it tends to be a waste of time.
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Permalink Reply by Snake Stewart on
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That well bore easment sounds worse then actually sharing royalties with another section. Now you have the dynamics of having a rig in your backyard yet no royalties to prove it ? This is not the only example of a lateral exceeding a mile, thus covering more then 1 section.
Drilling over 2000' laterally without a frac sure seems like more wasted money to me.
Whats a shame is the fact that certain "Pro's" only answered questions that they wanted too and belittled folks questions that didnt measure up to what they felt they should take the time to answer. I miss that like I miss a bad case of jock itch, with Brute aftershave splashed on it!
Dont fret so people ! There have already been numerous sightings . I even sent him a note the other day. Things are gonna work out for all those SPAK's out there.
P.S. I did look at a map. Several of then, hense the question. Being fairly certain of something is almost as dangerous as being almost positive. Plenty of room for error when we dont have any say over something. I just feel there may be much more to this then we are seeing. I am "almost positive". :-)
Snake, running from people with Brute aftershave.
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Scratch my previous post. I fully understand why Shale Geo wouldn't want to come back!!!
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Permalink Reply by Spring Branch,mineral owner on
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It's amazing how we can rationalize and justify our erroneous thinking. My experience has been when I have one finger pointing at someone else, I have three fingers pointing back @ myself. Is it possible that the landowner of the pad location in Section 29 also owns land in Section 20, and as a result, has a strong interest in seeing Section 20 drilled? I see that units have been formed in both Section 20 (HA RB SUL) and 29 (HA RB SUM). Directional drilling is done all the time in the industry and is just no big deal. I am "fairly certain" that my friend answered my question because I, a friend of his, asked him. I am "almost positive" he answered the exact question I asked of him and am certain he didn't "belittle" me because I asked the question about the "Peironnet 29 #001", which is, as "most" folks know who are reading all this, the topic of this post.
Taylor, I agree with you 1000% and am proud to have you as one of my "friends".
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Thanks for clarifying S.B. and congratulations on your friendships.
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Permalink Reply by sesport on
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SB - At certain times when I looked at the 3 fingers pointing back at myself I said, "Huh, what'd I do?" I'm reading and trying to learn here, asking a few questions, and whether intended or not came out feeling like I wasn't worth the time. I apologized and others have apologozed.
Now this is collegiate discussion. Most professional people welcome challenges to their thinking. KB has said this about herself before, doctors & lawyers do it all the time. I'm not overly concerned about posting. And, as you said, you looked at some information and came to erroneous conclusions yourself.
That said I will ask is it possible, as I've seen it posted here before, that the unit is not necessarily two sections? That the unit is formed from parts of the two sections as long as it is 640 acres? Just asking ... stating my understanding of previous posts ... may have gotten it wrong ... if it aggravates you please take a pass.
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Permalink Reply by Spring Branch,mineral owner on
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I don't think so. The unit being drilled and produced will be Section 20. I don't get aggrevated at questions at all. I get aggrevated at flame throwers who have no knowlege and love to read their own posts.
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Gosh Spring Branch,
I thought everybody loved reading my posts, if only to gain more info for the next round of hate mail.
As I stated earlier , I am not an expert on anything.While I have a certain advantage info wise on some issues, O&G aint one of them. The main things I have learned, make me leary of O&G's. Cant help it. Until there are a bunch more Les B's, TwoDog's & yes, Dion Warr types on here I will be forced to continue with my, questionable in your mind , approach.
Kinda ironic tho that you would even reply to my Discussion, not having any knowledge whatsoever.
Have a good one.
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Permalink Reply by Spring Branch,mineral owner on
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SP, I have always thought that you came across as very sincere. I certainly addressed no comments to you and feel badly if you thought I did.
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