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Permalink Reply by James L. Williams on October 12, 2010 at 17:43

There was recently an article in the Ft. Worth Star Telegram about the wells Carrizo has drilled into the Barnett Shale under the campus of the University of Texas at Arlington. The drill site is 2 1/2 acres on the southeast corner of the campus. So far 22 wells have been drilled from this small site, and Carrizo says they intend to drill 22 more. (The RRC map shows all of the existing wells.) The well spacing appears to be about 30 acres. The 22 wells are producing 62 mmcfd according to the article. The Barnett Shale is thicker than the Haynesville, and it appears that Carrizo has drilled stacked laterals. It appears on the RRC map that wells are being drilled in a similar manner under Lake Arlington. The Haynesville Shale is different than the Barnett, but it seems likely that 80 acre spacing would be productive in the Haynesville Shale.

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Permalink Reply by Grillin' - MmmMmm on October 8, 2009 at 1:50

What you need is a well decline curve that takes the 4-8 BCF per well and breaks it out over time. Large percentage of the EUR will come in the early years.

Now, well decline curves are about as argumentative as the EUR's, and are also closely related...dependent variables as they say. Give one EUR to 10 engineers and we'll give you 10 decline curves!! Give us one initial production rate, and we'll give you 10 EUR's and many more decline curves!! The key will be to get more long term data. I believe the decline curves published by CHK and HK aren't bad for starters in predicting income from your royalty. However, the big unknown will also be gas price. So even if we were really good and came up with a statistical distribution from 150 wells and got you a nice median production decline curve, the price of gas could still screw it all up!

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Permalink Reply by Grillin' - MmmMmm on October 8, 2009 at 1:52

Hard to argue with those ranges. As to well spacing, hard to tell in the short term!

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Permalink Reply by Mark on October 8, 2009 at 2:21

Question for Jay: In the seminar what percentage (%) first year decline rate was discussed/used as well as what b factor ratio was discussed/used in the decline curve(s)?

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Permalink Reply by Mark on October 8, 2009 at 2:49

Thanks Jay. 80-90% first year is what I've heard from the major players. I recently attended a HS seminar as well. Seems like the major players, from their website presentation data and from what they say in the seminars, are really mulling over what b factor to assign to the their decline curve. Time will tell as we all know.

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Permalink Reply by w.r. frank on October 8, 2009 at 4:57

Thanks Jay for your report. This is the kind of info that we need for GHS members to share with others.

As you well know, the problem is 1) lack of production history (earliest wells were not the best in completion technology and had short laterals), 2) unknown decline rate, 3) unknown "b" factor (shape of curve) and 4) unknown terminal decline. See slides 120 and 121 of XCO Analysts Day presentation.

As pointed out in slide 120, XCO's longest producing well is the Oden #6 which produced 2.8 bcf in 287 days, is still producing at 5 mmcfd. at 2,900 psi and is projected to produce 3.2 bcf in its first year. Oden produced 18.71 mmcfd. for it's first 28 days on line and according to XCO is at 5 mmcfd., for a 73% decline over the first 287 days. Clearly, this well will "slightly" exceed Arthur's projections, but, obviously, one one is statistically irrelevent.

We will know more when reputable engineering firms have 12-18 month actual production data from 500+ 2009 generation wells with 10+ frac stages and 4,000'+ laterals, along with choke and pressure data.

So it will be interesting in late 2011.

Everybody save AB's posting.

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Permalink Reply by Bobi Carr ("parker") on October 11, 2010 at 15:07

One big unknown will also be whether or not there are any additonal productive zones.

HK has stated that 80% of the EUR will be produced in the first 10 years of each well.

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Permalink Reply by Dion Warr, CPL on October 12, 2010 at 10:00

Jay:

Not to get too far afield here, and I have not had the opportunity to parse through the presentation, but what, if anything, did the engineering group have to comment on as far as how the frac jobs (particularly proppant condition) were holding up in the second generation wells? It would appear that this factor would significantly impact the 'tails' of the wells going forward.

Oh, and good bump, Bobi.

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Permalink Reply by drilltheshale on October 13, 2010 at 1:54

Thanks for the great info, Jay.

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