Replies to This Discussion

Permalink Reply by Terry L. Antee on October 27, 2009 at 7:58

It is where the bottom of the hole is located. Directional tools are used to locate the bottom hole, it has to be a certain distance from unit and lease lines and other wells. The surface location and bottom hole location are not usually the same, even in vertcal wells.

Permalink Reply by Missy on October 27, 2009 at 8:15

So the bottom of the hole is at the end if they are drilling a horizontal well? Most likely 330' from any section line?

Permalink Reply by Les Bamburg on October 27, 2009 at 16:06

Missy, yes the bottomhole location (BHL) would be at the end of a horizontal well. The BHL can be closer than 330' from the section line but the last perforation must be at least 330' from the section line.

Permalink Reply by Hobbs on October 28, 2009 at 9:37

Sorry, Missy - I'm not following you around. You just ask good questions!

To answer your last question "is that where the minerals are extracted from?" as it relates to a horizontal well, the portion of the "lateral" (horizontal portion) that produces usually consists of only a portion of the total length of the lateral. Once a well is "kicked out" from vertical and becomes horizontal, the distance from the base of the "elbow" (curve) to the bottom hole location is available to yield hydrocarbons. Normally, a portion of the lateral is perforated, then fractured (frac'd), and the "effective perfs" (perforations) in the lateral include only that perforated portion of the lateral that produces hydrocarbons with no or low amounts of water or shale.

Therefore, depending on things such as the quality of the shale, the water in place, and the quality of the perforating and frac jobs, a 5000' lateral may have as little as 100' and as much as 4500'+ of effective perforations from which to produce. For this reason, there's value dealing with companies that are considered industry experts in shale completions. Note, though, that a company completing a 10 MMCFD well could have a great shale zone and a terrible frac, versus a 10 MMCFD completion maximizing a bad shale interval (containing water) with a great frac. Unfortunately, there's usually not enough public information to get down to that level of validation, but a high rate is a great start!