Chesapeake was asked a question

  I sent the following question to Chesapeake. We have seen some reports of very very good results in oil production so far. But then again we are not seeing any kind of a base line.

So I asked them the following question and what is your guess?

http://www.chk.com/Investors/Pages/Information.aspx

Question in the Utica not too much info is known. But the question is what would be a ball park figure upon the daily oil production of say a 640 acre unit as a hopeful average? I guess at 500 bbl/day am I in the ball park with that figure?


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Permalink Reply by Billy Park Whyde on February 1, 2012 at 7:22am

Mark the Harrison Well came in at about that and it was bragging time! I have not researched how large of a unit the Harrison well site was. I personally think 500 bbl/day would be a low end estimate but it will be interesting to see if I get a answer to my question to them.

Permalink Reply by Paul Martinelli on February 1, 2012 at 7:37am

the Harrison well (Buell Well) was 177 acres....1 lateral

Permalink Reply by Paul Martinelli on February 1, 2012 at 7:40am

I belive it was 3000 BBL equvilent.....liquids are worth ~3x time more than oil

015334grltd9mPermalink Reply by 015334grltd9m on February 1, 2012 at 9:54am

Keep digging?  Knowledge is power.

Permalink Reply by Bluflame on February 1, 2012 at 3:57pm

Hello Ron,

  Thoroughly enjoyed our chat last week.

BluFlame

015334grltd9mPermalink Reply by 015334grltd9m on February 1, 2012 at 5:13pm

Come back anytime BluFlame.

Permalink Reply by Bluflame on February 1, 2012 at 3:56pm

Paul,

   CHK's announcement of "initial" Buell well results last fall cited ~3000 BOE/d (barrels of oil equivalent per day), including ~1500 B/D of NGL's (Natural gas liquids). NGL's are worth less than oil (maybe you meant to say 3X gas, which was about correct at the time of the announcement). Anyway, NGL prices are volatile and I just read yesterday currently are ~$56/barrel. This will vary dependent on the breakdown of specific NGL's. It seems logical to me (not based on any hard facts) that NGL pricing may suffer at some point the same over-production price decline as is currently occurring with natural gas. 

   Finally, a big variable in the equation is the deterioration rate of the well. CHK seems to be very close-lipped about that. In other shale plays, the deterioration rate has been steep.

   Paul, I'm not an expert in these matters by any stretch, just a landowner in the Utica wet gas zone and therefore a very interested observer of Utica developments. Others are welcome to dispute my assessment

BluFlame

   

Permalink Reply by Paul Martinelli on February 2, 2012 at 2:17am

Thanks....

 

 

No expert here either ...just a learning landowner looking to get the best deal from myself finacially and environmently.

Permalink Reply by rmc on February 2, 2012 at 7:38am

I'am just a farmer also but I think in the years to come you will find the big deal with this two plays(Utical-Marcellus) wasnt the intial production but the very slow decline rate of production  Just my guess

Permalink Reply by Bluflame on February 2, 2012 at 7:51am

Hello RMC,

  That would be a big win for everybody! Let's hope you are correct.  CHK will be required to report results of the Buell well and others in March, but it may be too early to draw any conclusions about deterioration rates. Is your property leased? 

BluFlame

Permalink Reply by Billy Park Whyde on February 2, 2012 at 8:21am

Yes Blue Flame March 1st  I believe is the release date) will be a buzzing day in here, I hope!!!!

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