Replies to This Discussion

Permalink Reply by Rock Man on June 6, 2018 at 5:21

REPLY BUTTON NOT WORKING SO CUT AND PASTING ORIGINAL COMMENT WITH MY COMMENTS

RM-
1. Thank you for the time and effort put into your posts.
2. As Eagles Ranch 14H has produced 102,425 BO in its first 7 reported months, is this well economically viable? My rough math would be 102,425 BO X $65 per barrel X 75% = $5 million.
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RM comments

I'm not sure where to find the actual D&C costs for this well but I figure is north of $7 MM - especially with the pilot hole and all the science (logs, cores, etc.) that EOG did prior to drilling the lateral.

The $5 MM net value of the oil volume produced so far is an undiscounted view of this value - discounted value numbers will be a lower. One needs to add in the LOE associated with producing this well. One of the biggest factors is the SW trucking and disposal (which will run between $1 to $2+ per BSW).

It is impossible to calculate a good EUR projection for this well right now (IMO) - especially if EOG has not yet installed artificial lift as I expect.

In the long run, I figure that this well will make some money for EOR from a discounted rate of return perspective. But remember that this is the FIRST well in this play area and only a 4000' lateral.

Future best practices (to be determined after more wells and analysis) and longer laterals (up to 10,000') should equate to better EUR's and economics. Future wells will also be helped by SWD wells and pipeline system to transport produced water for SWD.

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Permalink Reply by Skip Peel - Mineral Consultant on June 6, 2018 at 5:24

I know where RM.  EOG reported the cost of the Eagles Ranch 14H #1 as $11,941,039.

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Permalink Reply by Rock Man on June 6, 2018 at 5:31

Wow! I was way soft on that total number. Figure that about $1.5 Million of this is tied to the vertical / science well portion of this operation. But that still leaves a bit over $10 MM D&C.

I may have to retract my earlier comment about this specific well "paying out" over time from a discounted ROR perspective.

Thanks for looking up these costs!

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Permalink Reply by Skip Peel - Mineral Consultant on June 6, 2018 at 5:37

I should have included the cost break out for your review.  Here it is.

EAGLES%20RANCH%20WELL%20COST.pdf

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Permalink Reply by Rock Man on June 6, 2018 at 5:51

Thanks for posting this

Nothing about coring / may be lumped into another category

$1.8+ Million for Labor and Supervision???!!!!

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Permalink Reply by Hydrocarbonite on July 7, 2018 at 1:11

Hey guys,  there is no production posting for May on this well.  How long can they delay posting?

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Permalink Reply by Skip Peel - Mineral Consultant on July 7, 2018 at 1:18

There is no delay, just standard procedure.  Cumulative production is not known until after the close of the last day of the month.  The operator then has a mandated time period to report to the state.  Then the state has to process the report and enter the production in the database.  Therefore, May production will appear in the database six to eight weeks from the last day of the month.  So look for May volume in the second half of July.  This is the case with all wells, not just this one.

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Permalink Reply by Hydrocarbonite on July 7, 2018 at 1:31

thx Skip.

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Permalink Reply by Skip Peel - Mineral Consultant on July 7, 2018 at 1:35

You're welcome, Hydro.

Permalink Reply by Robert Craft on July 8, 2018 at 3:51

Based on the normal production decline through April, I would expect May production to be about 4,500 BBL

Permalink Reply by Robert Craft on July 30, 2018 at 5:03

Updated report.  4792 BBLS

http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2...

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Permalink Reply by Spring Branch,mineral owner on July 7, 2018 at 12:28

Last year (2017) Chesapeake was regularly drilling  Haynesville CUL wells to 21,000' for $4 million or so.  The bigger expense was the completion cost which would take the total well cost to $11 million or so for the 10,000' lateral wells.  I would guess that in time EOG could get the actual drilling cost of an AC well below the $9+ million reported on the Eagles Ranch well, though the completion cost will likely rise above the $2.7 million reported on the Eagles Ranch.

If Chesapeake can drill a 10,000' Haynesville for $4 or $5 million, I don't know why EOG couldn't drill a 4'000 or 5,000' lateral Ac well for way less than $9+million.

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