Replies to This Discussion

Permalink Reply by tony allen on November 1, 2012 at 9:08

Thanks Skip. This seems like good news.

Permalink Reply by Skip Peel - Mineral Consultant on November 1, 2012 at 9:39

We'll have to wait to see, tony.  All this accomplishes at this time is to HBP 2560 acres instead of 160 acres with two piddly vertical wells.  That's to SWN's benefit, the question is whether it is to the benefit of the lessors whose leases are now held by those units?  And who will receive a vastly smaller decimal percentage of royalties paid in large units with miniscule production.  Back in the early Haynesville Shale days lessors screamed about being HBP'ed by verticals which they knew were incapable of meaningful production. And those wells were only holding 640 acre units. 

Permalink Reply by Skip Peel - Mineral Consultant on November 1, 2012 at 12:41

Here's the Brown Dense excerpt from today's SWN News Release:

Southwestern has approximately 506,000 net acres targeting the Lower Smackover Brown Dense formation in southern Arkansas and northern Louisiana. The company has drilled six wells in the play area to date. The company's first three wells, which were completed earlier this year, are currently shut-in. The company's fourth and fifth wells, the Johnson #21-22-1 #1 and the Dean 31-22-1E #1 both located in Union Parish, Louisiana, were drilled to vertical depths of 10,507 feet and 10,503 feet, respectively. Both wells encountered higher pressures within the target formation and the company is using these wells to obtain additional log data and core samples and to optimize fracture stimulation designs in the vertical sections of the wells. The company currently plans to re-enter these wells as horizontal wells in 2013. The company is also completing the Doles 30-22-1H #1, located in Union Parish, Louisiana, which was drilled to approximately 10,673 feet with a 4,731-foot completed horizontal lateral. This well also encountered high pressure within the formation and flowback is planned during the first week in November. In late-November, the company plans to place both the Doles well and the company's third well, the BML #31-22 #1-1H, to sales with the expectation of learning more about the decline characteristics of both wells before year-end. Southwestern has permitted and plans to drill additional wells in the area in 2013.

Note the mention of turning the wells to sales.  This will allow unrestricted flow which is what we have been waiting on to get an idea of decline rate.  Very important.  If SWN has applied for any new permits in this area as stated in the release they haven't hit the state database as of today.

Permalink Reply by Big E on November 29, 2012 at 3:59

Just got notice of Dean 31-22-1H #2 as the alternate unit well, looks to be in section 30.

Attachments:

• dean well #2.tif, 857 KB

Permalink Reply by Big Little Oil on November 30, 2012 at 1:02

That alternate unit well site is clearly on Exxon's surface fee acreage and appears to be set to go ~5000' lateral at most(if it is a lateral)

Wouldnt Exxon get to see all the cards now? They own the surface majority of the Dean 31 unit by fee simple ownership. What are the implications of Exxon in this?

Permalink Reply by Ed on November 30, 2012 at 18:45

Looks to me Dean #2 is just a horizontal extension of Dean #1. Plat shows PBHL(Proposed Bottom-Hole Location).

Permalink Reply by Skip Peel - Mineral Consultant on December 1, 2012 at 2:04

The "discovery" well is also on Exxon fee lands.  And it was drilled over three years ago. It appears that SWN has chosen to drill a new well instead of re-entering well #1 to go horizontal as they stated they would do in an earlier presentation.