Replies to This Discussion

Permalink Reply by Scott on January 4, 2011 at 16:32

Based on your thinking of an average Haynesville well producing 6.5 bcf over the 30 year life span. Would you could consider the following well to be average or above average and if above, your best guess of the EUR?

IP at 17,200 mcfd, Flow Pressure-7649 psi, Choke-22/64

9 months and 10 days of production-1.97 bcf

 

As always Les, I sure appreciate it.

 

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Permalink Reply by Les Bamburg on January 4, 2011 at 18:17

Scott, based on the Petrohawk type curve that well should be closer to a 6.7 Bcf EUR.

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Permalink Reply by Scott on January 5, 2011 at 4:22

Thanks Les. I can live with that.

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Permalink Reply by Les Bamburg on January 4, 2011 at 15:31

Henry, you need to include some operating cost also but that should be low for the first 12-18 months.

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Permalink Reply by Henry on January 5, 2011 at 0:43

Les,

Agree.  My estimate was a simple ball-park way to think about it.  So, for a UMO, my conservative estimate would be this for the average 6.5 Bcf well:

 

UMO:  Reach payout in 3 Bcf.  That leaves 3.5 Bcf to the UMO.  Take off 10% for operating costs, and the UMO receives payment for 3.15 Bcf of gas.  (If gas prices were to rise, payout would be reached earlier, leaving more for the UMO.)

 

Compare that to the royalty owner.  The royalty owner (assuming 25%) would get 1/4 of that 6.5 Bcf, or 1.625 Bcf.

 

So, in principle, the UMO can come out way ahead.  But it is a risky way to go -- wells can screw up and end up costing a lot more than $9M, and payments come later so there is that whole issue of the "time value of money.".  Also, if the UMO has a sizable tract, I would imagine the driller would be less inclined to come back for well #2 on his section, compared to a section that is 100% leased.  It's a gamble.

 

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Permalink Reply by Linda Whatley on January 4, 2011 at 10:54

Ditto!!!!!!!

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Permalink Reply by VSC DeSoto South on January 17, 2011 at 12:22

Could someone who is on lease owned by Encana and SWEPI tell me:

1 How soon after their well went to sales they began receiving royalty checks?

2 Did you receive the checks at the same time for both Encana and SWEPI?

3 Which company was faster?

4 I am told Encana does not send a division order prior to sending out royalties, does SWEPI? If SWEPI does how long does that delay royalty payment?

5 Are the cost free royalty payments the same form both? If not, how far apart in rate of compensation are they?

6 Who pays at the highest rate?

 

 

Anyone.....anyone....?

 

Thank you!

 

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Permalink Reply by Henry on January 17, 2011 at 14:30

VSC,

Go over to the Red River Parish group, and read Joey's post on gas prices.  There is a good discussion of EnCana and SWEPI in there, and that might answer some of your questions.

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Permalink Reply by Jim Cobb on January 19, 2011 at 15:08

Henry

I finally got all the pricing together for J&W Operating back to April and Questar (QEP) since July.  There are no deducts on these leases, but we are being charged a transporation charge from QEP that is being handled.  I did not put this into the prices.  I will keep updating and let me know if you can not open the spreadsheet.   Also, if this is not easy for you to copy and paste or if you need it diferently, please let me know.

Thanks for all your effort.

Jim Cobb

Attachments:

• gas prices.xlsx, 11 KB

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Permalink Reply by Henry on January 23, 2011 at 1:45

Hello everyone,

I'm hoping to update the data this week.  If you haven't sent me data lately, please send it so I can include it in the upcoming post.  Please send data via a GHS email.  As always, thanks.

henry

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Permalink Reply by Linda Whatley on January 27, 2011 at 16:47

Hi Henry,

 

I'll send my information when I get another check on the 1st.

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Permalink Reply by Henry on January 27, 2011 at 9:13

Good afternoon, all, 

I have updated the prices.  You can find the latest prices in the discussion at the top of the page. 

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