Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on September 4, 2013 at 15:10

On a number of occasions performing mineral research I have noted the decline in historic  drilling as gas formations produce less gas and more liquids.  This often occurs as drilling moves up dip and the formations become more shallow in depth.  The operating companies were targeting natural gas not the liquid components so they just stopped drilling when this occurred.  This is exhibited in a number of formations across NW LA.  Many are likely targets for modern horizontal development by operators seeking liquids and willing to capitalize the required infrastructure.  I've been preaching liquids for a couple of years now.  Thanks for providing some confirmation that the royalties from these liquid wells are much improved over dry gas by the value of the NGLs. 

Permalink Reply by Skip Peel - Mineral Consultant on September 5, 2013 at 11:38

I think the Harrison County leasing that has gotten a little notice over the last couple of years is targeting liquids.  I think you are correct that Anadarko is doing the same in North Caddo Parish.  I think they have demonstrated their interest in developing liquid plays from their Panola County wells.  Although oil is better, it's hard to find opportunities especially in unconventional reservoirs.  Opportunities for "wet gas" are much more abundant and less risky.

Permalink Reply by jim weyland on September 10, 2013 at 10:26

Skip, hope you don't mind my input. the comingled stream that comes out of the tree is an admixure of gas, liquid hydrocarbons and water. at the wellsite, a good operator will first run this through a seperator where liqiud hydros which float on the liquid water leave through one pipe to well site stock tankage, the liquid water comes out of bottom of the sep & the gas which contains both water vapor and gaseous state liquid hydros goes out the to a wellsite dehydration unit where the gaseous water is extracted. note this is usually done at the wellsite to as to minimize the likelyhood of freezeoffs in extremely cold weather conditions. after the dehy the "rich" gas stream is measured before leaving the leasesite then it is comingled with the rich gas of others via the gathering line/s  to a central gas processing facility where the liquifiables are extracted. they leave the plant to be ultimately "fractionated", that is seperated, into the various constituents, i.e. ethene, C2; propane C3; butanes C4 normal and isobutane; and C5+ which is commonly called natural gasoline. the processing plant pipeline quality "tailgate" gas is then sold to market. having said that, your midstream services provider, can and often will, if he's the only "game" w/in economic distance to your well/s rather than to provide fee for service gathering and processing he will often attempt to buy what's often called "blood, guts & feathers" at the lease site sales meter where he receives the dehyed rich gas stream. another wrinkle, in most instances, an operator of size with critical mass in the area will have set up his own midstream services entity allowing him to have another opportunity down the value chain, after all, why let those $ go to a third party when he just transfers them from his right pocket to his left. he does this whether its providing services for fee or buying blood guts and feathers. i hope you find this helpful. jim weyland  fwiw, now retired, i spent my entire career on the commercial side of the natural gas business. 

Permalink Reply by Skip Peel - Mineral Consultant on September 10, 2013 at 10:41

Don't mind at all, jim.  Thanks for the detailed explanation.  In North Caddo Parish gathering will be done by Bayou Parish Midstream, a subsidiary of Anadarko.  I would think that dehydration will be done in field by Bayou with the dry gas going into the closest tap and the liquids going to Carthage.  Now we just have to hope for some economic wells.  I find your commercial side of the business interesting at least to the point of grasping the basics.  Help is appreciated.

Permalink Reply by jim weyland on September 10, 2013 at 13:22

skip, thank you for letting me know who's the midstream player in this instance.  in light of having had some pre-retirement dealings with them, imo, the good news is that apc is inclined to be honest. from your post, i infer they' re processing at someone's NLA plant and shipping the rawmake to carthage for transshipment, probably to Mt. Belvieu. please advise if i've misunderstood. do you know what p/l index price Bayou uses for gas sales and what the % keep is with respect to liquifiables? jim p.s. growing up, i spent many days @ the jeem's bayou club. i understand that today the lake is clogged w/seaweed, what a shame/loss.

Permalink Reply by Skip Peel - Mineral Consultant on September 10, 2013 at 13:33

jim, it appears to me that APC/Bayou Parish Midstream will construct a field office and gathering and treating facility in the immediate vicinity of their initial wells to handle their rich gas stream.  There is an existing Center Point gathering system in that area that may be able to take the dehydrated gas.  I'm not familiar with any existing NGL pipeline connects close by.  I assume there will be a separate NGL pipeline constructed to the closest connection to Carthage if one exists.  I don't know the prices.  I attended a party at the Jeems Bayou Club last spring.  The noxious aquatic weed is Salvinia molesta.  It's bad news and Caddo Lake in general and Jeems Bayou in particular is exactly the kind of environment where it thrives and is impossible to eradicate.

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