Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2011 at 10:17

LOL!  Yes, it does have a nice ring to it.  Here's what to expect next.  The average time from a well reporting that it has been potentialled (state test to assign allowable production) which occurs soon after being "turned to sales" and the completion data becoming available on the state database is approximately 10 to 12 weeks.  It can be longer, it is hardly ever shorter.  From the report date of "turned to sales", it can be 4 to 6 months before the first royalty check arrives.  Or longer.  The complexity of the title for a section determines how long the process takes but much of the delay is simply for the work to begin.  The law firms and title reviewers are not sitting around twiddling their thumbs.  Their workload is tremendous and new Division Orders continue to pile up on their desks daily.  Be Patient!  And lastly, keep in mind that the first check is for multiple months worth of production and often at a wells peak production.  The second check will likely be much less and all the ones that follow will decline in amount as the well declines in production.  Make a plan.  Get some professional help from an accountant familiar with royalty income.  Each unit should get 8 Haynesville wells over time depending on operator and circumstances.  In some areas where the Bossier shale is also productive, the total wells in a section/unit may be as many as 16.  For many this is a once in a lifetime opportunity.  It should be treated as such.  Good Luck.

Permalink Reply by Deborah Rowell on June 15, 2011 at 10:57

  This is good news!  When news of the Haynesville Shale came out, I never imagined it would be in our section.  I had no idea there could be more than one.  Thanks for the info Skip.  This site has been a huge help as most of us know little to nothing about the O&G business.

Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2011 at 11:00

Thank, Keith.  And consider making a donation to GHS from that first royalty check.

 

http://www.gohaynesvilleshale.com/opensocial/ningapps/show?appUrl=h...

 

Good Luck!

Permalink Reply by bshelby on June 16, 2011 at 3:49

Skip, Just to be sure I understand what you're saying, there could be up to 8 wells drilled in each section/unit?  Am assuming this would be based on production(original well's output falling), price of NG & if the Gods smile upon you & your heirs.  Is this true of ALL the units that have producing wells?  Will definitely keep a donation in mind, you have been a lot of help and it's greatly appreciated.  Learned a lot.

Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2011 at 4:09

The LA. Office of Conservation has set well spacing for Haynesville and Bossier horizontal wells at 80 acres.  A standard governmental section is a mile square, ~640 acres.  Therefore an operator may drill 8 wells for each formation.  The great value of both shale intervals is the ability to build infrastructure that will serve many wells and, baring any mechanical well problems, to drill all of them with no dry holes.  The process is more akin to manufacturing than to exploration and production of conventional reservoirs.  As operators drill more wells and experiment with different production designs, it may be possible in the future to produce the same amount of gas per section with fewer horizontal wells.  I can assure you that operators will not drill fewer wells unless they are sure they are continuing to get all the recoverable gas they believe exists.

Permalink Reply by bshelby on June 24, 2011 at 3:40

Am begining to wonder if the wells in this section will EVER be completed!  Starting to mess with my head.  LOL

Permalink Reply by Skip Peel - Mineral Consultant on June 24, 2011 at 3:55

It helps to know the general time line for the process.  Most lessors start anticipating mail box money when the rig shows up.  It can be many months for drilling, completion, connection to pipelines, state tests, unit surveys, division order reviews, title curative work and accounting to turn out the first check.  I don't even start to look for completion reports at the District 6 office until 10 weeks after I know a well is turned to sales.  And professionals who perform surveys or turn out division orders are swamped.

Permalink Reply by bshelby on July 20, 2011 at 10:06

I almost fell out of my chair today when I went to SONRIS and it said the above well, #241453, has been " turned  to sales"!   Wonders never cease..  Let the good times roll.

Permalink Reply by Deborah Rowell on July 20, 2011 at 12:02

I checked Sonris a few days ago but this new info wasn't on there. It did seem at times that completion would never happen. This is very exciting!

Permalink Reply by BirdDawg, plain ole' idiot on July 20, 2011 at 12:16

Well in Section 6, T15N-R8W, serial #241453, completed 5-16-11, 6.994 MMCFD, 20/64 choke, 6850# CP.

Permalink Reply by bshelby on July 21, 2011 at 9:51

I know this has been answered somewhere on this site, but I couldn't find it.  What does MMCFD stand for?  Know it has to do with how much NG is being produced.  Is 6.994 considered "good"?  Thanks

Permalink Reply by Skip Peel - Mineral Consultant on July 21, 2011 at 10:30

One M = thousands.  Two MM = equal millions.  6.994 million cubic feet per day.  Yes, a good well but how good depends on what kind of well it is, the choke that was used to test the well at 9.994 MMcfd and the Casing Pressure or Flowing Pressure of the well.

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