Replies to This Discussion

Permalink Reply by North LA on June 25, 2013 at 4:10

Any experts care to comment? It looks good to me but I'm ignorant when it comes to production numbers. I guess it all depends on depletion curves??

Permalink Reply by John D Cook on June 25, 2013 at 7:07

One fine well for a vertical.  Lot of oil recovered and gas flared off before well was put to pipeline.  Not a expert by far but this one is a success for SWN in my opinion.

Permalink Reply by Skip Peel - Mineral Consultant on June 25, 2013 at 7:50

From the IP data I don't think the well is economic.  That opinion, in part,  is based on the reported  gravity. The gravity for WTI is 39.6.  The 62.9 gravity is short a lot of long chain hydrocarbons.

Permalink Reply by Rock Man on June 25, 2013 at 7:55

Agree that this vertical is probably not economic but it is a good indicator that a horizontal may work in this section. One concern on that would be the spread of the perforations (242') - could a frac'd horizontal access this entire section effectively?

Lack of "black oil" and instead having condensate is also a concern as to eventual EUR mix and economics.

Permalink Reply by Skip Peel - Mineral Consultant on June 25, 2013 at 7:58

Mark, there already is a horizontal well in this unit.  S/N 244319.  This is an alternate unit well.

Permalink Reply by Skip Peel - Mineral Consultant on June 25, 2013 at 10:28

State spacing requirements for all field orders that I have reviewed allowing for horizontal development regardless of formation anticipate a frac cylinder with a radius no greater than 300'.  Of course there can be a difference in what is allowed and what is feasible or possible. 

Permalink Reply by Rock Man on June 25, 2013 at 10:41

Has any company done microseismic to monitor frac growth in this area?

Permalink Reply by Skip Peel - Mineral Consultant on June 25, 2013 at 12:16

Yes, SWN.

Permalink Reply by tony allen on June 25, 2013 at 13:23

Mueller said they were receiving a premium to the WTI for the oil/condensate SWN produced in the area. I don't understand how that can be a negative. Page 3.

http://www.swn.com/investors/Press_Releases/2012/8.7.12.pdf

Permalink Reply by tony allen on June 25, 2013 at 14:54

The Dean produced over 15k bbls of oil/condensate and approx. 90K mcf in 90 days . If they received the pricing Mueller stated, the well has already grossed over 2 million in sales. Even after the royalty burden and severence tax, it still has a net to SWN of 1.5 million. It is still producing 112 bbls and 668 mcf on a very tight choke. If this was drilled on a "pace setter" schedule, then the AFE would have been less than 2.5 million without the science. In 90 days they would have achieved a 60% ROI even after royalty and severence tax burdens.

Permalink Reply by Skip Peel - Mineral Consultant on June 25, 2013 at 15:39

As I  pointed out above, WTI is 39.6 gravity.  The condensate being produced is 62.9.  It is not as valuable as light crude because it lacks some of the fractions found in WTI.  It does not command the price per barrel that WTI does.  As Mark P points out, it is not "black oil".

See slide 7 of 11.  http://www.slideshare.net/tommckeown/api-gravity

Permalink Reply by tony allen on June 25, 2013 at 18:38

http://www.rbnenergy.com/dont-let-your-crude-oil-grow-up-to-be-cond...

http://seekingalpha.com/article/1188401-an-unexpected-surge-in-u-s-...

http://www.mining.com/web/whos-making-a-killing-on-condensate/

Just trying to find some hope...

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