Replies to This Discussion

Permalink Reply by Rock Man on April 24, 2021 at 4:49

3454' in a week / finally got into drilling groove. Should be at TD by next week's report.

Looking forward to seeing the final drilling and completion costs for this well once it is posted

Permalink Reply by Skip Peel - Mineral Consultant on May 8, 2021 at 2:53

Prime Rock received a work permit on 5/4 for the following:

PRESSURE TEST CSG. PERFORATE FROM 20,414'-14,635'. HYDAULIC FRACTURE IN 30 STAGES W/1500 GAL OF ACID, 500,000 LBS OF SAND & 8,500 BBLS OF WATER PER STAGE.

Additionally, the Prime Rock Crosby SWD #2 was spud on 5/3.

Permalink Reply by Rock Man on May 8, 2021 at 6:33

Glad to see that they got lateral to TD and got casing set.

Only have a 5779' long section of lateral to frac / complete here.

• On comparison, operators in other unconventional horizontal plays are drilling 10,000' in their sleep and now regularly getting 15,000' laterals drilled and completed.
• With 20,000' laterals coming soon (if not already!)

Anyway, based on the work permit details, 30 frac stages so planning for 193' long completion stages. That is good - the tighter the completion zone, the better.

• 500,000# proppant per stage works out to close to 2600# per foot of frac'd interval - very intense approach.
• The acid used is just a clean up effort to make sure perforations are open and some initial etching of the carbonate reservoir is initiated. .
• Frac fluid volumes of 44 bbls per foot also high.

Big money going into this frac job. Results will be interesting as to O&G volumes..

Operator is expected a LOT of water  (as am I) - ergo the SWD well being drilled. 

Permalink Reply by Lisa Melder-Johnson on August 9, 2021 at 6:31

Looks like new postings on Sonris for this well.

Permalink Reply by Skip Peel - Mineral Consultant on August 9, 2021 at 8:21

Thanks for the heads up, Lisa.  I'll post a link to the well file below and a cut-and-paste of the Initial Production data.  This landman's perspective is that the oil production, gas production and pressures look good but once again the produced water is a drag on economics.  Rock Man is on the road but we ought to hear his opinion when he gets a chance to log in to the website.

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

 

07/05/2021

10

20466

15650

COMPLETED AS OIL WELL IN AUSTIN CHALK W/976 BOPD; 3557 MCFD; 5400 FTP; 2500 CP; 24/64" CK; 3578 BWPD; 78% BS&W; GOR 3644 CF/BBL; GVTY 51 API @ 60F; PERF: 14643-20391

Permalink Reply by Rock Man on August 9, 2021 at 15:25

Initial rates not surprising - massive water volumes.

Issue here as in similar AC wells like this will be the decline profiles for O&G production versus water production. The high initial O&G rates will be kicking off $45-$46,000 net per day (assuming 25% royalties). This does not include LOE for SWD. Drilling and equipping 1 or 2 SWD's to handle this much water is a costly operation - but the only way to come close to even thinking about making money out here.

Based on what I have seen in other low oil cut producing reservoirs (and here it is only 21-22% oil cut), the oil and gas volumes will tend to drop over time while the water either stays flat or increase. And even if the water rate drops, I highly doubt that we will see an increasing oil cut in time - odds are, we will see decreasing oil cut which my be in single digit percent range in near future.

Remember that O&G are the anomally fluids in the reservoir - water is the "host" and dominant fluid. O&G are the minor components with more limited volumes.

Even at a post royalty (but pre LOE and Pre SWD costs) net cash flow of $45,000 per day, it will take some time to pay out this operation.

I haven't seen final well costs here but let's assume $15 Million. Plus another $2 Million for SWD wells and gathering / injection facilities. At flat O&G production (and that won;t happen), one is looking at over a year for the wells to pay out (non discounted economics). This time frame isn't that bad IF (stress IF) the O&G rates stay high. . .

Suggest those who are interested keep an eye on production rates over time here.

But in the meantime, the royalty owners will be getting some nice checks out here.

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