Replies to This Discussion

Permalink Reply by 5thGenTexan on March 27, 2012 at 5:18

Wade would be interesting.......

Permalink Reply by Larry Lynch on March 27, 2012 at 10:18

I was wrong, it is Ward. Why would Wade be interesting?

Permalink Reply by 5thGenTexan on March 28, 2012 at 8:31

My family

Permalink Reply by jffree1 on March 28, 2012 at 12:51

OK, now that we have that cleared up...  Ward SU #1H (API 405-30404) was completed last June.  The IP was 10.735 MMcfd on a 20/64 choke with a 6703# flowing pressure.  It looks like the producing interval was about 3600' so that is a pretty short lateral and would account for the IP not being higher.  

Production through January was 1,049,925 mcf.

Permalink Reply by Larry Lynch on March 29, 2012 at 2:20

obviously we are new to this. So the well is producing 10,735,000 million cubic feet per day? Is that good? Do you know how my dad can calculate what he would receive in royalties? He knows his decimal interest. Thanks so much for your help, we really do appreciate it!

Permalink Reply by Les Bamburg on March 29, 2012 at 2:56

The initial production rate was 10,735 thousand cubic feet per day (Mcfd) or 10.735 million cubic feet per day (MMcfd).  The production rate declines with time but that is a good well.

 

The total gas production was 1,049,925 thousand cubic feet (Mcf).  If the average price were $3 per Mcf the total revenue thru January would be ~ $3.15 million.

Permalink Reply by jffree1 on March 30, 2012 at 2:54

Since you know your decimal interest, the calculation is pretty simple:

Production (mcf) X price per mcf X decimal interest = gross royalty

1,049,925 mcf X $3.00 = $3,149,775 X decimal interest = gross $ 

Just keep in mind that a) you are using an average "guess-timated" price ($3.00/mcf) and b) there will be deductions from the gross royalty.  The first check is always the largest because it will be for several months.  Each check after that will be for one month. 

Permalink Reply by etx44 on March 30, 2012 at 4:39

iffree1,

Will you please give a "guess-timated" "deductions from the gross royalty" for the above at some decimal interest, like .001 or .010.

 

Thanks, Kelly

 

 

 

 

Permalink Reply by jffree1 on March 30, 2012 at 6:04

Kelly,

I wouldn't even hazard a guess.  I have read comments by some knowledgeable members here on GHS that typical deductions should run below ~7% but I have seen, with my own eyes, a sizeable check where the stated royalty gross for 5 months of production was reduced by 22% in deducts.  I recommended that an attorney should be consulted.

Permalink Reply by Larry Lynch on March 30, 2012 at 4:54

Thanks! Doesn't look to promising for a big payout. My dad might get $100 bucks or so. O well it was fun thinking about it anyway. Thanks for your help. Maybe we will win the mega millions tonight!...lol!

Permalink Reply by Larry Lynch on March 29, 2012 at 2:31

So the producing interval is when they have depleted the gas from where they are retrieving it and then move to a new spot and begin again?

Permalink Reply by jffree1 on March 30, 2012 at 2:55

This is a horizontal well so the producing interval is the portion of the lateral section that was perforated and frac'd.  The total well bore includes a vertical section and a horizontal (lateral) section.  If they wanted to they could plug the lateral off and re-complete the well in the vertical section to try to produce from an up-hole formation (Cotton Valley, James Lime, Pettit).

I haven't yet seen that done with a horizontal Haynesville well.  The oldest horizontal HA wells are only 3+ years old so it could happen someday.

They won't necessarily wait for the total decline of one well before drilling more wells in the unit.  That is more dependent on the price of natural gas as long as there is production from somewhere to hold the unit leases.

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