Replies to This Discussion

Permalink Reply by jim weyland on June 23, 2014 at 6:00

steve,

the louisiana department of natural resources(dnr) definition of allowable is:

"The daily rate of oil or gas that a well is permitted by state authorities to produce during a given period."

its not my area of expertise, but my guess is that the offsetting well is just a better one. 

jim weyland

Permalink Reply by Steve Bacle on June 23, 2014 at 6:02

Why would the state reduce a well's production? Why does it seem like the reduced allowable occurs when gas prices go up?

 

Permalink Reply by jim weyland on June 23, 2014 at 6:43

as they are produced, wells production decline, think of it like letting air out of a balloon, at some point there won't be any air left in the balloon.

the allowable at any point in time is going to be at or near to as much as the well can produce at that time.

i believe la allowables are set twice a year. note: there are many on this board way more familiar/knowledgeable, maybe one or more of them will add their knowledge.

Permalink Reply by Skip Peel - Mineral Consultant on June 23, 2014 at 11:23

The wells get a state DT-1 24 hour flow test twice a year.  The results of those tests are used to assign the allowable.  No two wells are alike so variance in performance even across short distances is common. 

Permalink Reply by Steve Bacle on June 25, 2014 at 7:38

Thanks, your answers make sense. Not that I like my declining royalties. I guess its time to drill more wells! 

Permalink Reply by Skip Peel - Mineral Consultant on June 25, 2014 at 8:36

Yes, it is and operators are beginning to drill more wells just not in your part of DeSoto Parish.  They probably need another 25% increase in price to make your area more economic.

Permalink Reply by Steve Bacle on June 26, 2014 at 1:25

What about Natchitoches parish? Any good news there? It has so much potential. Its right on the border of the Tuskaloosa trend and is in the Haynesville shale.  

Permalink Reply by Skip Peel - Mineral Consultant on June 26, 2014 at 1:35

Steve, Natchitoches Parish is, geologically speaking, a complicated area.  The southern extent of the Haynesville Shale stops in north Natachitoches on the northern and northwestern flank of Natchitoches Island which is an upthrust dome.  The generally consistent stratigraphic column dipping south from NW LA gets faulted and folded along the edge of the Island.  I am told that the same thing happens on the south side of the Island for the S LA stratigraphic column.  At the moment the only inkling of possible exploration activity of which I am aware is by XTO forming Hosston Units in the San Miguel Creek Field in NW Natchitoches Parish.

Permalink Reply by Steve Bacle on June 26, 2014 at 3:17

Thanks. My Dad tells me about a big oil field in Black Lake. The flaring of gas would make a light that could be seen hundreds of miles away. They plugged during WWII because they thought it was a beacon for air attacks.