Peak Production Rates - 3 wells (Jefferson County & Carroll County) - Ohio

 

Three notable recent wells completed by Chesapeake in the Ohio Utica are as follows:

 

  • The Brown 10H in Jefferson County, OH achieved a peak rate of approximately 1,445 boe per day, which included 8.7 mmcf of natural gas per day

 

  • The Bailey 3H in Carroll County, OH achieved a peak rate of approximately 1,420 boe per day, which included 205 bbls of oil, 270 bbls of NGL and 5.7 mmcf of natural gas per day

 

  • The Snoddy 6H in Carroll County, OH achieved a peak rate of approximately 1,260 boe per day, which included 320 bbls of oil, 250 bbls of NGL and 4.2 mmcf of natural gas per day

 

 

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Permalink Reply by Bluflame on August 7, 2012 at 2:45pm

US,

   I also read the CHK 2Q report. I've never seen so much detail expounded in a quarterly report. (if you can't dazzle them with brilliance, baffle them with bull....?!?) I also noticed they said so far, all Utica wells are averaging ~1000 BOE/day peak rates, consisting of 5.7MMCF gas, 250 bbls oil and 150 bbls NGL's. These numbers create great revenue and presumably profit even at current depressed gas and NGL prices.

   As always, the $64K question is the well decline from the "peak" rate. I did not see any mention of that in their voluminous report. Did you?

BluFlame

Permalink Reply by Marcus Grayson on August 7, 2012 at 3:35pm

" As always, the $64K question is the well decline from the "peak" rate. I did not see any mention of that in their voluminous report. Did you?"

 


I didn't see any decline estimates, but these numbers are a decent starting point for CHK and the play itself.  By this time next year (time crawls when you're waiting, doesn't it?) we should have a good idea of how these wells behave in the short term.  The best part of their report is the good oil-NGL ratio.  With NGLs suffering price declines the oil production should do a nice job of buoying profitability.  Now if only CHK could figure out how to make gas $7 mcf...

Permalink Reply by Bluflame on August 7, 2012 at 4:56pm

US & Marcus,

  Gulfport just posted peak production from their Wagner well in northern Belmont County of 17.1MMCF/d NG & 432 bbls/d condensate. No mention of NGL/Oil mix in the condensate. They also noted the 1st Shugert well just south of I-70 in Belmont County is completed and resting. BTW, I've visited both sites.

   Please correct me if I am wrong, but @ $3/mcf ng and $50/bbl condensate (assuming a 50/50 mix of ngl & oil), that computes to $51,300/day NG & $21,600/day for "condensate" totaling $72,900/day. This is serious money, even if it is "peak" rate. I don't believe I've seen any other Utica well anywhere near 17.1 MMCF/d of ng.

   Am I smoking bad stuff here!?!? Have I misplaced a decimal point?

BluFlame

Permalink Reply by Happy for hardworking Farmers on August 8, 2012 at 6:28pm

Bluflame,


Your math looks correct but not to worry for Carroll county as the Wagner well is a much larger unit than the Carroll wells, perhaps 6 times as large.

Permalink Reply by bo boboski on August 8, 2012 at 9:02pm

The size of the production unit may be 1280 acres or 120 acres. But the well lateral is still only 5,000 ft. M/L and drains 550 ft from each side. Or 5,000x1100 ft. drainpool. They declare the unit 1280 ac. sometimes when they want to drill more laterals in the future or just to hold all of it by production.  What I"m saying is; the size of the unit has nothing to do with how good  the well is producing.

Permalink Reply by Marcus Grayson on August 8, 2012 at 9:58pm

I'm pretty sure the lateral for Wagner was significantly longer than 5,000 ft.  ODNR shows it at 8,221 ft. which is ~40% larger than 5,000 ft.  

Permalink Reply by Marcus Grayson on August 8, 2012 at 10:02pm

Those are huge numbers.  I'm curious to see what the 30 and 90 day averages end up being.  If they only decline 40-50% in the first year they'll make a profit by the end of the first three months of the well's second year.

Permalink Reply by Utica Shale on August 9, 2012 at 8:26am

Marcus,

 Doesn't the Wagner Well hold the title for the longest total length of production pipe in Ohio ?

Permalink Reply by Marcus Grayson on August 9, 2012 at 9:05am

I heard that too, but I'm not sure how to verify it.  Either way it's a monster well and I'm glad to see it.  Now comes the agonizing two years to collect data on decline.  By the time Obama is starting his third term--he's so swell, we ought to really just make him President for Life--we'll be boomin' here in the Buckeye State.

Permalink Reply by Bluflame on August 9, 2012 at 8:37am

Marcus,

  Actually the numbers could be even better. In another release, Gulfport noted 17.1 MMCF/day NG; 432 bbls/day condensate; and 1881 bbls/day NGL's. They claim this creates 4650 BOE/day.

   They also said these numbers assume full ethane recovery and NG shrinkage of 18%. I do not know how to interpret this statement. Can anyone help?

   I will not attempt to convert all this to $$/day, but the number could be breathtakingly large! Gulport's CEO said this is their best well ever.

BluFlame

Permalink Reply by Dan on September 16, 2012 at 5:45pm

Here's what Gulfport is doing to get 4650 boe/day:

First read the more detailed excerpt from their 2012 Q2 Report:

"...the Wagner 1-28H, was recently brought online from its resting period and tested at a gross peak rate of 17.1 MMCF per day of natural gas and 432 barrels of condensate per day. Based upon composition analysis, the gas being produced is 1,214 BTU rich gas. Assuming full ethane recovery, the composition above is expected to produce an additional 110 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 18%..."

So you have the 432 barrels of liquids. Then through processing, and with full ethane recovery, they can sqeeze out another 110 barrels of liquids from every million cubic feet of that 17.1 MMCF of gas, so thats 110 x 17.1 = 1881 barrels more.  But doing that reduces the gas down to 18% less than it was, so you have 17.1 - (18% x 17.1) = 14.022 MMCF.  Then you convert that gas to equivalent barrels of oil using the 6000 CF/boe conversion factor to get 14,022,000 / 6000 = 2337.  Add all these up and you get 432 + 1881 + 2337 = 4650 barrels of oil equivalent per day (boed).

 

I might add that while this may be a ligitimate conversion, it is not fair to compare this number with the Buell well production numbers, as have been done in the media.  The Buell well numbers do not take into consideration the extra liquids derived from processing.  They only report the "raw" gas and liquids.  For the Wagner well, those were the 17.1 MMCF and the 432 bbl, which if converted to boe is only 3282 boed, which is only 9% higher than the 3010 boed reported at Buell, not the 54% being touted.  Still, not shabby at all, and it still is the current best producer.

Permalink Reply by Bluflame on September 16, 2012 at 8:21pm

Dan,

  Correct me with this if I am wrong. GPOR proposes to trade ~3000MCF (3MMCF) @ ~$3/MCF=~$9000 for 330 brls of NGL @ ~$35/brl= ~$11.550. Seems hardly worth the trouble.  (@ 110 brls of NGL's/MMCF as reported.)

  Any way you slice it, the Wagner 1-28H is a great well!

BluFlame

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