Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 3:36

scout, that information is above my pay grade.  Unless you work for EOG or a land company in their employ, there is no way to know those things.

Permalink Reply by littleasy on March 21, 2018 at 1:47

Is it possible that the “lull” has more to do with LA State, National, and Geopolitical issues, and not the results of the first EOG attempt at a LA AC well?  “STORMY” weather may well be on the horizon (see upcoming 60 Minutes, etc), however, it could be the lull before the storm of exploration activity and analysis?  Not an O&G expert, but I’ll bet “There will be Oil before there's Blood.”  Just saying!!!

Permalink Reply by Andrew on March 21, 2018 at 1:50

Rock Man,

I have seen some AC wells in Vernon Parish come on strong with high 24-hr IP rates only to see them decline to virtually zero production within a couple of weeks. Does that have something to do with the AC's properties near the TX/LA border or do you think it was an execution issue by the operator?

Permalink Reply by Bob Zimmerman on March 21, 2018 at 4:06

It was my experience back in that day in Vernon Parish that some AC wells declined when their lateral(s)  collapsed. Application of the slotted liner helped somewhat, but not enough to overcome the drop in price for hydrocarbons. Product is still in the ground, waiting to fulfill my prediction, namely that the AC will be one of, in not the largest and longest play on the North American continent. You had to be there when the wells were brought in to believe it. It was more like what you expect from offshore wells. And then, three days or three weeks later, poof! It was all over but the crying. 

And to address a previous concern, it doesn't make any difference if wells are drilled or not in a play. To paraphrase former CHK head Aubrey McClendon commenting about a shale play, you don't need to drill when you can make money like this flipping leaseholds.

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 4:12

Bob, I think mineral owners like for wells to be drilled.  Something about "mail box money"?  For those who are willing to consider a future quite different from last century, I would suggest they consider the possibility of stranded reserves.  If I owned considerable mineral interests I would very much like to get them under development in the next five to ten years.  Thereafter I would have a plan to liquidate them in their entirety over the following ten years.

Permalink Reply by Rock Man on March 21, 2018 at 4:27

Re: Vernon Parish AC wells

These wells are in an highly overpressured part of the AC trend. The reservoir here is a naturally fractured system - so production is from open void spaces (fractures). If these void spaces are not recharged by "new" O&G migrating from the rock (matrix) into the void space, you are depleting the open void network and pressures drop and production decreases. High IP's followed by rapid decline has been common in the AC across the trend in the historical natural fracture play. 

Better wells with longer production lives have more extensive fracture systems. Poor wells like you referenced in Vernon Parish die quickly as the void system is drained and not recharged.

The lack of recharge points to the ultra low (or nano) perm that is common in unconventional reservoirs. This is what the fracture stimulation approach works in certain areas - the frac job creates a stimulated rock volume (SRV) that creates a network of "perm" that connects up the pore space that contains O&G. Essentially liberates the O&G from the matrix and allows it to flow into wellbore via the induced fracture system (perm).

As in other unconventional hz frac plays, production will decline over time as bottom hole pressure decreases around the wellbore with production. This decline can be rapid - 40 to 60% in the first year is common. After several years, production will reach a point where it flattens out and holds steady for years (or decades). This "flat line" production can be only a small percentage of the initial IP rate (e.g. 5-10%).

Multiple factors impact how a hz frac'd reservoir will respond - the reservoir system itself (P&P, geomechanics, pressure), how the well is drilled (landing zone, staying in zone) and cased (good casing integrity and cement job), stimulated (frac stages, perf clusters, proppant types and volumes, pump pressures) and produced over time (ESP's, artificial lift changes over time, maintenance, corrosion control).

I have just touched on some of the variables tied to making a complex reservoir like the AC "work" in economic volumes. In Central Texas, there are areas where the AC Hz Frac play just doesn't work - this includes Gonzales County (which is adjacent to Karnes Co where the big AC wells are located). EOG drilled several Hz Frac AC wells in Gonzales with uneconomic results. Then got out and focused on areas where the play was working.

Even the best operators cannot make a play in a reservoir that doesn't have the properties to "work". And the biggest factor (IMO) is tied to the volumetrics of the reservoir - or O&G in place. As the old phrase goes, you can't get blood from a turnip. Or O&G from tombstone with little to no pore space.

Permalink Reply by Edwin Koenck on December 31, 2018 at 4:19

I recently have heard there may be leasing in the Leesville/Pickering area?   Does anyone know who? 

Permalink Reply by Skip Peel - Mineral Consultant on December 31, 2018 at 4:51

Edwin, check the discussions in the Vernon Parish group.

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 4:24

John, I considered that possibility. How about Hunter? Did your attorney tell you they were a land company? Not an operating company?

Permalink Reply by John Lann on March 21, 2018 at 4:28

He just said that Cypress was a land company.  I will have to ask more.

John

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 4:46

John, ask if you like but if you were not told in the beginning that Hunter was not an operating company, there is little to gain now from the answer.

Permalink Reply by John Lann on March 23, 2018 at 6:06

I just signed my contract with Hunter Exploration Co. INC this morning and received a check from Cypress Energy, not a draft.  Hunter will not be the operator per Jeff.  He had seen the name but could not recall it while here with me.  He could only think of Bay.............  something.  He said I could ask him again when gets back home and looks it up.  For now Cypress has no more work for him until they start leasing smaller acreage.

Skip,  I understand to late to know now, but I still do not know how it could have helped me to know the actual operator.  We had three companies that made offers.  If I had even knew who the actual operator was and did not want them, how was I going to get a lease with someone I wanted.   We are very pleased with the $850 and now just hope the different operators that come into EBR have good luck and maybe learn from each other as they drill.

Anticipating will be fun and I will continue watching this site just to know about different things as they are happening.  Have enjoyed what each have posted on the site.

John Lann  EBR Parish  " Go Austin Go "  or should it be " Give it up Austin "

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