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Permalink Reply by a on September 30, 2013 at 10:50

That's because its four wells and not just one well. 

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Permalink Reply by Skip Peel - Mineral Consultant on September 30, 2013 at 11:01

Well SN 244440 is generally an average CV liquid well.  Indigo has a number of them in S Caddo/N DeSoto.   The Berry 25H was considerably better and got it's own press release. The wells produce condensate which is valued at about $42/barrel currently as opposed to $100+ for light crude.  The SONRIS Lite Well File lumps oil and condensate together under "Oil Produced".  You have to look at the Final Completion report or the Allowable report to determine if the production is indeed oil or it is condensate.  This well IP'ed at 42 barrels of condensate a day.  These wells are economic owing to the liquids produced and the low cost to drill for a horizontal well.  This one came in just under $6.5M.  The reason the Lease/Unit/Well Production looks so impressive is that is the cumulative production of 4 unit wells all reporting under the same LUW code, 14687 as indicated in the Well Cnt column.

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Permalink Reply by Skip Peel - Mineral Consultant on October 1, 2013 at 2:41

Yes, they do.  However the NGLs are not reported to the state.  Production reported, other than IP, includes all liquids under "Oil" and natural gas under "Gas".  The Indigo Berry 25H is the only press release that I have run across for one of these wells.  The IP reported to the state for the Berry was 13.24 MMcfd and 65 BBL 59 degree Gravity condensate, no oil.  The press release stated the Berry IP as 3,019 BOE/D.

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Permalink Reply by Skip Peel - Mineral Consultant on October 1, 2013 at 4:28

That's okay, Kathy.  I prefer it to the alternative.  LOL!

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Permalink Reply by W. Marshall Shaw on October 4, 2013 at 4:16

My impression is that numbers reported to DOC can be juggled.  Strictly speaking, this is not dishonest, but one must be careful in taking at them at face value.  There can be reasons why an operator would want to exaggerate production figures, and why an operator would want to minimize them.  As in any bureaucracy, the DOC will replicate anything fed them. 

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Permalink Reply by Dion Warr, CPL on October 4, 2013 at 13:06

Mr. Shaw:

This can be true to an extent. Production is audited via various double checks between operator, purchaser, pumper and transporter with small allowances made for discrepancy. Most errors seem to result NGLs calculations, which are not specifically tracked, and temperature and pressure variances in converting gas data reporting to the state (specified by state procedure according to a standard temperature and pressure). Marginal wells are also culprits, in which an operator / lessee may report minimal production every second or third month - these are sometimes vetted and found to be legitimate, and sometimes are not. It sometimes is beneficial (not necessarily legal or ethical) for an operator to over report, but in general plotting production on a monthly basis and monitoring these numbers tend to bear out common red flags (usually exaggerated reports of spontaneous (commonly initial) production rates) or in booking values and reserves, but wanton over reporting schemes for any significant length of time tends to collapse in a very short time due to nonexistent revenues and cash flows.

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