Replies to This Discussion

Permalink Reply by Snake Stewart on July 7, 2008 at 13:03

Hello Pilgrim, Those are some mighty fine questions that you have asked. I believe I have heard some chatter about 8 wells per section when it is all said and done.If they can't extract enough gas then I am quite sure that number will increase if current law allows ! I do not know the exact % but I believe your 90% is rather high on draw out. As to the life of these shale wells I do not feel there is enough evidence to truely know for sure but I have heard 40-50 years.That sure sounds like a long time.
The number of wells at a time ,I think will be dictated by number of rigs and sections that need to be drilled to be "held by production". I do not feel that they can afford to let these newer , more expensive leases run out and have to resign them again. Just my thoughts on it .

We would certainly appreciate someone with a better understanding of these topics to chime in.Thank you in advance for doing so ! Thank you Pilgrim for the questions !

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Permalink Reply by Randy on July 7, 2008 at 13:08

I'm honestly not sure about the 90% draw out, so let's just forget that questions for now. I have heard 8 wells per section, but I have seen more, and of course less.

Royalties are for any well drilled in your unit, for the life of those wells. You are paid on ALL gas extracted from your unit.

They tend to drill, move the rig to another pad site(unit), then come back, so it's not constant drilling in one location. As snake brought up, there is a finite amount of rigs and lot of drill sites, so they will probably get one in as many sections as possible first. Just my thoughts, not the definitive word.

There is no way to tell how long the well will last, I think snakes estimates are on the high end. 20 years would be very nice.

Feel free to ask any questions, this is what I do.

Randy

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Permalink Reply by pilgrim on July 7, 2008 at 13:32

Randy and Snake- Thanks for the response. I thought, too that one well per section is all these companies can manage initially. I was just trying to project and confirm some of the information I had been given.

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Permalink Reply by pilgrim on July 7, 2008 at 13:35

Randy and Snake- Thanks for the response. I too, think that one well per section is all these companies will be able to manage initially. I was just trying to project into the future and confirm some of the information I had been given.
Another question- Can an O/G company drill a well in your section cap the well, pay you token royalties and thereby keep it tied up as long as they wish?

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Permalink Reply by Randy on July 7, 2008 at 13:53

Depends on the lease you negotiate, it is called a shutin....

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Permalink Reply by insomniacnla on July 7, 2008 at 14:21

In my lease, Chesapeake initially asked for a 5 year shut-in period and they have now agreed to shorten it to 2 years. I have yet to sign, I would prefer an even shorter period.

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Permalink Reply by Randy on July 7, 2008 at 14:28

Recognize it takes time to get infastructure...they aren't holding it for gas prices, they want their money out of the ground as much as you do. Go for a fair and equitable deal :)

Randy

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Permalink Reply by pilgrim on July 7, 2008 at 14:34

That is why I am asking these questions- I am trying to figure out what a fair and equitable deal is.

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Permalink Reply by pilgrim on July 7, 2008 at 14:35

Five years is a long time for a senior citizen to wait for a royalty check!

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Permalink Reply by Les Bamburg on July 7, 2008 at 15:50

Pilgrim, I will focus on the gas recovery question. The average gas in place for a section (640 acres) is about 150 - 170 billion cubic feet (Bcf). Recoverable gas is about 50 Bcf per section with 8 wells or about 6.5 Bcf per well. As others have stated the operator will probably drill only one well per section initially to hold the acreage in the unit. Later in the development phase I expect the operator to drill many if not all of the remaining 7 wells before leaving the section as this is the most efficient. In the Barnett Shale and similar fields the operator has drilled multiple wells from the same pad.

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Permalink Reply by pilgrim on July 7, 2008 at 15:57

Thanks for the info.

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Permalink Reply by VSC DeSoto South on October 19, 2008 at 7:58

How long did it take to come back and actually 7 other wells completed in a section, from the time the first well was drilled?
1 year, 3 years, 5 years, 10 years?
Are they still backfilling/filling in?

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