Decline Curves: Barnett vs. Haynesville
The recently released Chesapeake report included Haynesville Shale decline curve data from the initial wells. I was surprised to see a steeper curve than the Barnett Shale data. I am interested in the reasons for the steepness of the HS production decline and feel that those who are about to be first time recipients of royalty income should be aware of the affect. It does appear that though the initial years' decline is greater, the HS curve is flatter over the productive life of a well. What formation conditions and/or production methods explain the difference and does the decline percentage correlate directly to royalty income?
Decline By Year:
1- Barnett - 56% HS - 81%
2 - " - 27% " - 34%
3 - " - 18% " - 22%
4 - " - 12% " - 17%
5 - " - 8% " - 13%
Decline By Year:
1- Barnett - 56% HS - 81%
2 - " - 27% " - 34%
3 - " - 18% " - 22%
4 - " - 12% " - 17%
5 - " - 8% " - 13%
Views: 1328
Replies to This Discussion
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Permalink Reply by Les Bamburg on
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Grice, as Skip said these are LNG Receiving Terminals (regassification terminals) where LNG is received and vaporized for delivery into natural gas pipelines. Only one of these project's (Sempra's Costa Azul) has actually been built and placed in service. The others have been cancelled or have run into problems. By the way I have attached a picture of an LNG receiving terminal if you are interested.
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LNG Terminal.pdf, 129 KB
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Permalink Reply by Grice on -
Yes, and it is the receiving of foreign LNG which may negatively effect the need for domestic ng production (such as the HS). I understand where early projects were already in development, but with the new discoveries of domestic ng, one might hope future projects would be curtailed. However, that does not appear to be the case, indicating a need for priority restructuring.
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Permalink Reply by Les Bamburg on
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KB, Skip is spot on with his observation about the new reality of excess natural gas supply and lower demand requiring a complete rework of everyone's crystal ball. I just felt the Baker Institute was trying to force fit their analysis to arrive at a predetermined answer.
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Permalink Reply by Les Bamburg on
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KB, actually Schlumberger's statements about shale gas production are consistent with earlier information. Many tight gas sand wells would have very high initial rates of 20 MMcfd versus a typical Barnett Shale well at 2 - 6 MMcfd. After the initial large decline in production rate in the first 1 - 2 years, "once the production stabilizes, they will produce consistently for 30 years or more" with a very low decline rate of ~ 7% per year. This is what has been stated previously, HS wells will produce for a very long time but not necessarily at 10 MMcfd. With more information we will learn if decline rates in the first 3 years are similar to BS decline rates.
Sorry, but Schlumberger is a good technical company but not a US energy balance expert. Their 6 to 1 factor (actually it should be ~ 5.825) is simply the energy equivalency factor and does not reflect the actual commodity prices. Check my graph and see how often the ratio is at 100%. Some of their prospective is for international natural gas prices which are somewhat tied to crude oil rather than US natural gas prices.
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Permalink Reply by The_Baron on
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If KB thinks she can make sense of the energy market, then good luck.
Even those that are paid good money to do this full time can't predict the future energy prices, Its kinda like being a weatherman. Not to hard to say what will happen in the near term, but for long rang forcasts, might as well as use a magic eight ball.
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Permalink Reply by The_Baron on
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LOL
I think we both agree that prices will rise again, but in todays market with the economy the way it is, who knows. I just hope that people realize that gasoline prices will rise and buy their next vehicle accordingly.
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Permalink Reply by The_Baron on
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Of course, if the arabs and Venzulaians ge tired of this cheaper oil, who knows what may happen. OPEC may find a way to set quotas and actually follow them!
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Permalink Reply by Martin on
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July or August this year there was an article in Barron's about the NG market and the various shale fields. The author observed that the NG market price for break even shale production was in the mid-$6.00 range. That included average costs for fract or horizontal drilling.
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Permalink Reply by Cheerleader on
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Les B,
Are "sand wells" synonymous with "Lime wells"?
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Permalink Reply by Les Bamburg on
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Cheerleader, actually no. Sand wells mean sandstone formations while lime wells refer to limestone formations so two different types of rock. What is common is neither is a source rock for hydrocarbons so oil & gas would migrate into the formations from a shale formation.
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Thanks LesB,
I am intrigued with these sand and lime wells.
This site indicates that the lime wells have a potential at 20mmcf a day vertical and possible 2-5 times this on horizontal. Devon confirms this with their wells in east Texas. Do the sand wells have this potential? I understand the wells are less costly, the lime is easier to fracture...the list of positives goes on...Why aren't these wells the #1 priority in drilling? Are the Lime and Sand formations beneath the Haynesville?
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