Replies to This Discussion

Permalink Reply by Parkdota on January 31, 2010 at 9:03

Les, on one post you and/or Skip mentioned that it might take 10-20 years to drill all 8 possible wells per section. I would assume with the massive natgas production due in part to HBP would lead to all wells per section being finished towards the latter part of the time frame of 10-20 years. I'm intrigued by this time frame and haven't had much luck on gathering research via the net on it. Obviously royalty owners want them all drilled asap, assuming gas prices aren't too deplorable. Do you think the time frame will be pushed to a longer stretch for full 8 well development due in part to the massive HA production?

• ▶ Reply

Permalink Reply by Les Bamburg on January 31, 2010 at 9:16

Parkdota, I actually said it would be 40+ years before most of the wells were drilled and reduced drilling would occur for many years after that.

The number of wells drilled per year should be fairly steady for the 1st 20-40 years. Assuming it takes 3-5 years to hold all acreage (at least one well per unit), it is difficult to predict the timing for remaining wells to be drilled in a particular section. With the pad drilling concept, the operator drills several wells per section in one or more sections before moving to the next pad. Now does that mean the operator drills all 7 remaing wells or does he drill 3-4 per section in Phase 1 and come back later to drill the remaing wells? We just need to see this play out and it may vary by operator and area.

By the way, keep in mind that some sections may require 16 wells to develop both the Haynesville Shale and Bossier Shale.

• ▶ Reply

Permalink Reply by Parkdota on January 31, 2010 at 12:15

Wow.....I had no idea it might take that long. I guess that's why some people sell their royalties as to have the proceeds up front as they may see very few wells if any at all. In 14n 14w it appears that operators are drilling one to HBP then moving on. I guess there's no telling when they'll return. I guess if it takes 3-5 years to hold all acreage then there's little chance they'll be back in that time frame especially if you're with a large operator that has many sections to HBP.

• ▶ Reply

Permalink Reply by Les Bamburg on January 31, 2010 at 12:50

Parkdota, just remember we may be looking at 40,000+ wells in Louisiana alone to develop the Haynesville/Bossier Shale play. One township-range could take 288 wells to develop the Haynesville Shale and that number is doubled if the Bossier Shale is present also.

• ▶ Reply

Permalink Reply by Parkdota on January 31, 2010 at 14:59

40,000 well seems almost incomprehensible. If each one might produce roughly 6.5bcf then that would total 260tcf of natgas. I believe I've read that this would be enough for 10 years of U.S. need, and if you count the BO as being half then you'd have a total of both being around 390tcf that would meet 15 years of U.S. need. I believe the MA has 20 years of reserves. So, just counting HA, BO, & MA we'd have 35 years of reserves and that's not even counting all the other sources, shales, etc. I believe current monthly production is at 1.7tcf and we use 2.2tcf a month which would be around 26.4tcf needed per year. So, lets say the BO gets put off due to HBP in HA and the HA & MA get one well per section to HBP then it would meet 3.75 years of need. This would be around 8.25tcf of natgas which means with the current need to production difference of 0.5tcf it would take 16.5 years until they needed to drill the 2nd well per section assuming need holds constant. Even if it went up 2% a year it would still take roughly 15+ years. So, I guess it would be around that long for most sections until a 2nd well was drilled, and the BO would be no where in sight. This is all theoretical (and probably not the best theory) but it does put in to mind the massive amounts of natgas that can be produced.

• ▶ Reply

Permalink Reply by Les Bamburg on January 31, 2010 at 17:11

Parkdota, the 40,000 wells included both the Haynesville Shale and Bossier Shale developments. The Bossier Shale has an estimated EUR of ~ 5.0 - 5.5 Bcf per well. The total recovery for all the wells would total ~ 240 Tcf.

The Marcellus Shale will take a very long time to develop due to the topography and water and regulatory issues.

• ▶ Reply

Permalink Reply by Parkdota on February 1, 2010 at 6:53

Good, that cuts my theory by more than half based on the BO wells and even further due to the issues in the MA. I also didn't take into account depletion on existing wells. I wish I knew what that was but of course do not. Maybe my 16.5 year theory will come down to around 5-7 years lol.

• ▶ Reply

Permalink Reply by Bacon on January 31, 2010 at 12:04

Les, Do you know what the current take away capacity for the La. HA area is? Thanks.

• ▶ Reply

Permalink Reply by Les Bamburg on January 31, 2010 at 12:38

Bacon, I will try to give you an answer tomorrow when I have access to all my files. I have a "loaner" laptop this weekend.

• ▶ Reply

Permalink Reply by Spring Branch,mineral owner on January 31, 2010 at 18:38

Parkdota, Les B, Bacon .........FYI, EOG is drilling 4 wells per some of their sections right now, so it will certainly vary by Operator. Petrohawk is drilling 2 wells per section in some of their more prolific sections. For Chesapeake, I predict it will be a long time....they have so many sections to drill. I really don't see how Swepi will retain the acreage in many of their sections past the primary term.

• ▶ Reply

Permalink Reply by ledlights on January 31, 2010 at 21:01

Spring Branch,

If I remember correctly, EOG is already up to permit #5 in the Hassell unit in the Y'Barbo survey of Nacogdoches county. I have been assuming either that a large part of the leases they acquired from Sonerra had no deep rights releases so they do not have to press to get their leases HBP and/or they have very favorable economics with their leases there. Other reasons?

• ▶ Reply

Permalink Reply by Parkdota on February 1, 2010 at 6:59

Spring Branch, I figured maybe some operators would drill more than one at a time with the larger companies doing as few as needed to HBP. I wonder, though, if some are drilling more than one would that push even further the dates for 2nd wells for the larger companies seeing as how more natgas would be put into production? In 2008 Encana told us they were going to drill 7 in our section but then prices tanked in 2009. They have since stated they're drilling 1 to HBP and that's all we know. I've noticed that before prices dropped Encana to the north of us (we're in 14n 14w) drilled 5 in one section then I guessed changed strategy due to prices.

• ▶ Reply

• ‹ Previous
• 1
• 2
• Next ›
• Page