Replies to This Discussion

Permalink Reply by Bernell McGehee on May 6, 2013 at 12:27

I wonder why these laterals keep coming up short of the planned length?

Every other well they drill comes up a couple of thousand feet short..  They may need to rethink these long laterals.

Permalink Reply by Skip Peel - Mineral Consultant on May 6, 2013 at 14:36

Laterals are hardly ever drilled to the MD on the permit.  There is a fudge factor built into the permitted TVD and MD to allow for unexpected circumstances.  An operator can always drill short of both depths however in LA they can not exceed them without filing an amended permit to drill.  And that means idling the rig until the approval comes through.  Not something you want to explain to your boss.

Permalink Reply by Bernell McGehee on May 6, 2013 at 15:50

I have no knowledge of why this Ash well was drilled short or of wells out of this area, but I do know about five wells drilled in Amite County and that three were drilled short here only because of problems with drilling.  Two were drilled within a few feet of the permitted length.  Two were drilled 3,000+ feet short with admitted drilling problems (the "rubble zone"). And, one, unannounced at present, is rumored to have been drilled about 2,000 feet short due to unexplained (at this point) drilling problems. 

So, based on my knowledge of five wells I'm going to have to challenge the "hardly ever" statement above.  Further, why would a driller voluntarily stop thousands of feet short unless there were problems?  A hundred feet or so to be safe...sure...but 2,000 feet or more?

The "fudge factor" answer makes no sense to me and I'm betting it would make no sense to an investor either.  Why cut your production potential by 30% up front?

Permalink Reply by Skip Peel - Mineral Consultant on May 6, 2013 at 15:59

Bernell, five wells is an insufficient number upon which to base an opinion but go ahead if you like.  I've reviewed hundreds and can tell you that wells drilled short of permitted depths are common.  Yes, mechanical problems can cause shorter than planned laterals as can faulting.  My point is that an operator always requests depths greater than they plan to drill to cover unexpected contingencies.  The formation dip may change over rather short surface differences.  There can be a fault with throw sufficient to make a significant difference in formation depth.  Those that drill wells could make a much, much longer list.

Permalink Reply by Bernell McGehee on May 6, 2013 at 16:08

Are you telling me that hundreds of wells are drilled to only 70% of permitted distances routinely? 
And no royalty/mineral owner has questioned this practice before a state's oil and gas board?

Why should state's grant units larger than will be drilled? 
Why wouldn't these companies have smaller unit sizes so they can drill more wells?
Out of the hundreds of wells you've seen drilled short, has there never been an explanation offered?

Permalink Reply by Skip Peel - Mineral Consultant on May 6, 2013 at 16:25

I'm telling your that wells drilled short of permitted depths are common.  You can choose whatever percentage you want.  I'm simply stating a general fact.  Certainly specific wells have specific circumstances.  I can't speak for "states" but I do have knowledge of how the Commissioner and staff in LA review and approve units.  Operators generally apply for a unit size based upon their intended lateral length but can also apply for cross unit laterals for multiple existing drilling & production units.  All units for horizontal development which I have reviewed are a mile wide and allow up to 8 laterals, 660' per well (660' x 8 = 5.280').  The length of the unit can be 5,280', 10,560' or 15,840' depending on the operators well profile.  As to explanations, sometimes but not often in state reports.  When there is a large discrepancy on an important well it may be addressed in corporate press releases and presentations.  Operators do not routinely or purposely drill laterals far short of their permitted depths.  If they did so regularly I think the state would seek an explanation.

Permalink Reply by Bernell McGehee on May 6, 2013 at 16:43

"Operators do not routinely or purposely drill laterals far short of their permitted depths.  If they did so regularly I think the state would seek an explanation."

So, "drilled short" and "far short" are where you and I are not communicating.  The Ash well was supposed to be about 7,300', but was 5,300'.  In my book that is "far short" and means there was a drilling problem. 

So, my point is this "far short" situation is becoming rather common in the TMS and it appears to me these operators should rethink the laterals or explain how they plan to correct the problem.

By the way, I don't follow your math on the 8 wells per unit. 

I come up with 7 wells per unit. 

The units I've seen leave 660' borders on either side.  So, that would leave 7 wells with 660' between them (6 X 660') + (2 X 660') = 5,280.  What am I missing here?

Permalink Reply by Skip Peel - Mineral Consultant on May 7, 2013 at 1:22

It's 330' on either side of the horizontal wellbore for 660' total width.  A mile (5,280') divided by that 660' swath would equate to 8 wells.  When you initiated this exchange you did not define "short".

Permalink Reply by Bernell McGehee on May 8, 2013 at 1:41

Actually, Skip, the plat online at the Mississippi Oil and Gas website reads 660' for the Anderson 17H-3 well.  I think the 330' is the distance they stay from either end rather than from the sides, but I'm only familiar with what has occurred so far in the TMS.

By the way, the Ash Wells are a little less than 1900' from the section lines (one north and one south well in the 1900+ acre unit). 

So, if they separated toward the end line for 660', they could place two wells to the west and leave about 600' and 4 wells to the east and leave about 700'.

I certainly hope they will put in 8 wells per unit, but, so far in the TMS, they appear to have spaced them in such a way that they plan to put in only 7.  

Permalink Reply by Bernell McGehee on May 8, 2013 at 2:01

I do see where the Goodrich Crosby well was set up to allow for 8 wells.

Apparently Encana is being more cautious with their spacing and Goodrich more aggressive.  Not surprising considering the mindset of the two companies.

Permalink Reply by Andrew on May 9, 2013 at 5:41

A staff member at Mississippi Oil and Gas Board emailed me the following in regards to well spacing:

After reviewing the orders for the wells you mentioned, the orders describe only the approved exceptional spacing as to the unit lines, not between additional wells (density wells) authorized to be drilled in the unit.  Spacing between wells would be established when special field rules are developed, which hasn’t occurred yet.  Each of Encana’s units have been approved to allow for 2 to 4 wells per unit.  

Permalink Reply by Bernell McGehee on May 9, 2013 at 11:35

Since I can't reply to Andrew, I'll just add a comment which I hope will appear below his.

Regardless of the permitted authority, let's look at the plats for these wells to understand the intent of the companies.

Looking at the Anderson 17H-2 and 3 wells (I may get them backwards here, but it doesn't matter), 2 is set up 660' west of the eastern unit boundary while 3 is set up 660' west of 2. 

So, it is apparent Encana is spacing these wells with the current intent of having 7 wells per unit.

Meanwhile Goodrich's Crosby plat is set up to allow 8 wells per unit.  I have not looked at what they are permitted to drill because I don't think that matters. 

If Goodrich/Encana management believes they can drill 8 wells without impacting a neighboring unit and present the info to support this decision to the oil and gas board, the permit will simply be amended.

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