Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 27, 2025 at 3:07

Cole, that is a question without an answer at this time.  Although we have seen applications and permits for a handful of horizontal laterals that follow the line between two sections/units, we have not seen a completion report.  The most logical assumption is that such a lateral with have 50% allocated to each unit.  Considering the significant lag in completion reports being enter on SONRIS, this is a question that may not be answered until next year.  When the first such wells are reported complete, we will reveal and discuss how this is handled.

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Permalink Reply by Cole Prothro on June 27, 2025 at 3:24

Thank you sir we have land in coushatta and three new permits and ones on the line

255106 WD 4&3&21&22-12-9 HC 001

328' FNL & 1707' FEL OF SEC 4-T12N-R9W. PBHL: 2470' FNL & 0' FEL OF SEC 21 & FWL OF SEC 22-T13N-R12W

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Permalink Reply by Skip Peel - Mineral Consultant on June 27, 2025 at 3:33

You're welcome, Cole.  I have put that question to some of my contacts with the state.  Hopefully they have anticipated how this would be handled.

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Permalink Reply by w.r. frank on June 27, 2025 at 6:56

I think it says how to allocate in the approved Field Oder

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Permalink Reply by Skip Peel - Mineral Consultant on June 27, 2025 at 7:08

I think you are right, w.r.  You wouldn't be an industry member would you?

See Section 7 in the Field Order.  The "as drilled" survey may be a sticking point as horizontal lateral are never perfectly straight.

Boundary%20Lateral%20Production%20Allocation.pdf

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Permalink Reply by Ryan Howrish on Tuesday

All of the lease line well orders that I have seen state that the allocation will be done evenly between the two units on either side of the lease line. Skip is correct that the as-drilled wells are never perfectly straight.  I suspect, unless there is a significant deviation (>75-100ft), the allocation will still be done 50/50, but I am guessing at this point.

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Permalink Reply by Skip Peel - Mineral Consultant on Tuesday

I hope that we don't get into a situation where there is a significant deviation.  That may well turn into a legal mess.  There are a number of those lease line wells now permitted.  It may be next year before we see completion reports that address the as drilled well paths.

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Permalink Reply by Hale Yayuh yesterday

I don't understand how a company could drill a well without knowing how it will be allocated. Surely that is known prior to spud. I must be missing something here.

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Permalink Reply by Skip Peel - Mineral Consultant yesterday

Hale, what you are missing is the permitted well path and the fact that no wellbore is straight.  Not the vertical portion nor the lateral.  On the permit, the lateral is a straight line but in reality the as drilled lateral varies.  This is easy to see on SONRIS well plats.  Proposed laterals are straight lines while the previously drilled and producing laterals are not.  They do not vary much from the straight in all the instances that I recall but they are not straight.  I'll post a link below to demonstrate.  Scroll down to the well plat.  This is a plat for a permitted but undrilled well (the straight line) in a unit with two existing earlier wells, BSMC LA HZ #1 and #2 (not straight lines).

https://sonlite.dnr.state.la.us/dnrservices/redirectUrl.jsp?dDocnam...

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Permalink Reply by Hale Yayuh 7 hours ago

I didn't compose my last post very well. What I was saying is that if a company wants to drill right under a section line, surely they would propose some kind of sharing arrangement between the sections to each side of the lateral. And that they would have approval already to do so. I can't envision a company drilling a $20mm well and this being an unknown. I would think a field order or permit would make such a lateral 'legal.' The field order you posted above appears to address this very thing.

The fact that they are drilling some laterals within the 330 ft offset to section lines seems to be a good thing in that some acreage that would be otherwise not drilled due to the spacing of laterals already drilled.

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Permalink Reply by Skip Peel - Mineral Consultant 7 hours ago

The original spacing application stated that the production would be allocated 50/50 to the two adjoining units.  Yes, this is a good change in the spacing requirements.  There has been a lot of gas left unproduced over the previous iterations of horizontal Haynesville development.  From set back requirements promulgated under the old era of conventional drilling to the short, under-stimulated laterals of the first ten years of the play, there has been a tremendous volume of recoverable gas left behind.  Some of that unproduced gas can be recovered by refracks and new wells will produce more of what was formerly left behind.

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