Replies to This Discussion

Permalink Reply by Henry on September 12, 2009 at 3:38

Michele,
Here are my answers. Others might think differently....
1. Is is good or bad? It depends on how you look at it. You are one of the few people who will see more than one well in your section any time soon. On the other hand, with the price of gas so low, it's not clear to me you want to be drilled right now.
2.Yes, everyone in the unit who is leased should receive royalties. It will take a few months after the gas is sold to market.
3.Every acre in the unit participates equally in the payout. It doesn't matter where your acreage is.
4.If your lease is like most everyone else's, you are held by production (HBP) by the first well. The gas company has the right to drill all the others without any re-negotiation. Of course, you will receive royalties from all those other wells too.
Hope this helps.

Permalink Reply by Michele Etzkorn on September 12, 2009 at 10:07

Henry,
Thank you so much for the information. I'm a novice at this. I have absolutely NO idea about the oil and gas industries. Just what is in my current lease agreement...which as you explained was my take on the "renegotiation". I really just don't know what to think. According to Les's reply, the psi is only 4,000...why drill 4 additional wells to compliment 1 well with only 4000 psi? Doesn't seem to me to be a very thought out investment, or, am I missing something?

Permalink Reply by Les Bamburg on September 12, 2009 at 4:24

Michele, the Haynesville Shale will require multiple wells in a unit (section) to effectively drain the gas reserves so this is good technically. Some sections could eventually have up to eight wells.

Every mineral owner in the unit will share in the production of all wells in the unit.

Each horizontal well is separate but may have surface locations adjacent to each other in a single "pad". This should not have any effect on royalty percentage under a lease agreement.

The Thompson well (and subsequent wells) will maintain any existing lease agreement.

EOG, Thompson 11 #1 Well, Serial #239415, S11-T11N-R13W, DeSoto Parish, 13643 Mcfd, 30/64" Choke, 4000 psi Flowing Pressure

Permalink Reply by Michele Etzkorn on September 12, 2009 at 10:11

Since it takes approx 9 million $'s investment, why would they put 4 adjacent wells on a well with only a 4000 psi Flow Pressure? Doesn't make sense to me... Do you know when Thompson 11 #1 Well drilling was started? Or, can you tell me where to go to find that information? When I look on the DeSoto Parish rig count/location, that well isn't posted. Confusing to me, and I guess I don't understand.

Permalink Reply by Les Bamburg on September 12, 2009 at 10:21

Michele, the Thompson well was completed on 6/5/09 with a spud date of 3/2/09. On my rig count/location group I only post currently drilling wells.

A 4000 psi flowing pressure is fairly good and th reservoir pressure is much higher ~ 9000 to 10000 psi. Each well is projected to recover 6.5 Bcf which will give excellent economics.

Permalink Reply by Michele Etzkorn on September 12, 2009 at 11:42

Oh my!! I have so many questions.

1 - You listed 13643 "Mcfd" - does that mean "thousand cubic feet per day"?
2 - Also, can you explain the term you used "30/64" choke?
3 - what is mean by "spud" date?

See, I'm very ignorant regarding these matters.

Permalink Reply by Les Bamburg on September 12, 2009 at 12:29

Michele,

1 - Yes, Mcfd is thousand cubic feet per day.
2 - A 30/64" choke is the size opening (hole) in the choke that limits the well's flow rate so slightly smaller than a one-half inch diameter.
3 - Spud date is the 1st day the rig begins drilling the well.

Permalink Reply by Michele Etzkorn on September 12, 2009 at 17:56

I really do appreciate the information. Thank you so much. I will keep you in mind if I have further questions as you seem to be knowledgable in these matters.

I know absolutely nothing...I guess that's bliss!!! LOL

Again, thank you.