Replies to This Discussion

Permalink Reply by MARK NEEL on June 22, 2012 at 3:24pm

Jodi,

Knox energy purchased Nether Brother LLC (independent) wells today.  Purchased some Hamby farm wells in Nashport, Licking County.

In the last two weeks, Knox is offering 600.00 acres east of Utica for leases coming up for renewal. 

Things are quitely progressing.

Permalink Reply by 0i7okn54zwbdo on June 22, 2012 at 3:28pm

Harstine was strictly a core and not meant to be in production until possibly 4Q12 or 1Q13.  

Permalink Reply by MARK NEEL on June 22, 2012 at 3:35pm

FYI, The Harstine horizonal permit is on the same property as the core well.  The horizonal is staked on a completely different location on the farm.  

The core well site is finish graded with a small gravel pad at the well head for a pump jack.  I was told the core well was plugged back to the Clinton.  Don't beleave it because it was the Knox Energy landman.  They are offering 600.00/ acre a mile from the well with gas prices at 2.50 / 1000.  These offers have been prior to drilling the Sensibaugh well.

Permalink Reply by Utica watch on June 23, 2012 at 4:52am

Marcus why would you drill a well and not produce it especially when it turned out to have such good porosity as you stated in an earlier post "The permeability data came from Devon's Analyst Day that they held on April 4th.  Typical permeability in the Eagle Ford tops out at 1.5 microdarcy.  The Harstine well core showed perm above 30 microdarcy."  This does not make sense to me but as I have stated this is all new to me.  We heard they were going to make this core well an injection well.  Only what we heard with no facts behind it.  Any insight you can provide would be very much appreciated.  I am just trying to understand how this all works.

Permalink Reply by 1w1vl8clda7t4 on June 23, 2012 at 5:30am

"Marcus why would you drill a well and not produce it especially when it turned out to have such good porosity..." Maybe the below post by Garfield from " Why is the 640 vs. 1280 a giant new hot topic?" will help put things into perspective for you....this is why it is so imperative to have a reputable O&G attorney during negotiations.



"Reconfiguration has been a reality for decades, my friend. In many leases, the driller specifically reserves the right to reconfigure units at will - no permission is required from the landowner. You might try reseaching the unit maps for a few old wells in your area --- you will probably find a few where the boundaries changed over time. Usually they grow, not shrink, since drillers are looking to hold as much land by production as possible. As good as my ALOV lease with CHK is, it fails to prevent CHK from reconfiguring... the lease just limits the total size of the unit to 640 + a 10% fudge factor. An even bigger problem occurs when CHK gets a landowner to amend a lease to say that there is no maximum unit size, or that the maximum shall be whatever the state's limit is (which there is no limit in state law). On top of that, CHK's amendments also state that they can unitize leased property with uncontiguous property, and even unleased property! Under that scenario, CHK could create a 10,000 acre unit of disconnected properties in different counties, and legally hold it all with 1 well. Royalties would be diluted by a denominator of 10,000 acres, but CHK would only have to pay royalties to landowners with leases. Obviously, no royalties are due for unleased acreage, and obviously CHK has no right to drill, use or produce unleased properties --- it just serves to reduce the total amount of royalty money they have to pay out. Yes, this violates common sense and is totally unfair, but it is unfortunately legal. The O&G business is not about what's fair, it's about money. Landowners beware."

http://gomarcellusshale.com/group/ohio/forum/topics/why-is-the-640-...

Permalink Reply by 0i7okn54zwbdo on June 23, 2012 at 5:46pm

The vertical hole and subsequent core are not expensive.  That particular property is now a known quantity.  Spending more to get it into production does nothing to hold any land and it doesn't yield you new data.  Drilling at five other locations instead gets you much more data.  They can always come back and redrill it and add a lateral.

Permalink Reply by 1w1vl8clda7t4 on June 25, 2012 at 6:27am

I found this post from 'Utica's Wet Gas Zone just about Leased' by Utica Shale.

 

 "I was at a meeting this week with Dr. Robert Chase (Ph D in Petroleum Engineering) of Marietta College. He stated, 'The  western border for the Wet Gas play in Ohio is going to expanded even more west than currently drawn on our maps.'"

http://gomarcellusshale.com/forum/topics/utica-s-wet-gas-zone-just-...

Permalink Reply by 0i7okn54zwbdo on June 25, 2012 at 8:56am

He's probably right.  The knowledge base of the Point Pleasant is still very, very small.  We have so much more to learn over the next few years about pressure, porosity, permeability and fracking techniques.  If this play works out like many of the other shale plays in America you'll see the most profitable area contract to a much smaller fairway with limited production outside of that area.  If it develops like the Eagle Ford (let's hope) you'll see good production from all of the windows and the profitable areas will be much bigger.  From what we're seeing this looks like it's going to be more spread out than anyone ever thought.  

Permalink Reply by 1w1vl8clda7t4 on June 26, 2012 at 1:46am

Marcus, can you elaborate on your statement, "From what we're seeing this looks like it's going to be more spread out than anyone ever thought." Do you mean that the profitable areas are going to be bigger than anyone thought, or its going to be more hit and miss, and/or its spread out vertically. From my research, and from the recent activity from Rex Energy and their JV's in the Devonian, Ohio is going to be a multi-formational play; which tells me that if one formation is not a success in one’s area...your not out of the game.

 

Permalink Reply by 1w1vl8clda7t4 on June 26, 2012 at 2:22am

From my understanding there is a lot of variables when it comes to fracturing techniques and the time required to complete the process...but the mean is probably around 10 days. I know Enervest lets their fractured wells rest for 60 days after fracturing before they start flow back operations; however, Devon started the flow back operations at the Eichelberger well shortly after the fracturing was complete. I did here that with the normalized pressure at the Eichelberger well they are having to pump the flow back water out vs. it coming to the surface from its own pressure...a very time consuming process. So, I would say each well site has its own variables that determine the time required to perform different operations.

I found this article from Seeking Alpha regarding Devon and their new fracturing process using carbon dioxide. I don’t know if they are using this technique in Ohio, but it’s possible.

“Devon continues to explore enhanced recovery methods and more efficient operation methods. Its production at Beaver Creek in Wyoming, is exceeding expectations, producing 1,000 boe per day more than anticipated, at 5,700 boe per day. This production is possible due to Devon's use of liquefied carbon dioxide in injection wells for fracturing. This relatively new technology can result in a 15% to 20% improvement in oil recovery, and may pose less risk of aquifer contamination than traditional hydraulic fracturing.”

BGJ

http://seekingalpha.com/article/601301-devon-ready-to-jump-40-on-na...

Permalink Reply by 1w1vl8clda7t4 on June 26, 2012 at 3:03am

Sorry...I can't answer that...I just own farms in the area, I don't live out there.

Permalink Reply by 0i7okn54zwbdo on June 26, 2012 at 3:38am

The profitable zones will likely be more spread out.  In the Barnett or Haynesville there are very small sweet spots with outlying areas being much more marginal.  The Point Pleasant seems to be capable of spreading the profit zones throughout the windows.  Each window will have a concentrated sweet spot which makes it ultimately larger and potentially more profitable.  

As far as multi-formation you're dead on.  I worked in different parts of Ohio where we were looking for Clinton production first but always hoped that the Devonian shale would be economically supported by good gas prices.  I wouldn't hold my breath waiting for anyone to sink real money into shallow shales just yet, as they are usually gas bearing and at current prices are unattractive.  But in my amateur geologist opinion Ohio is well positioned for several decades of growth.  Add in the secondary recovery methods in the East Canton Oil Field and we're talking about a real, sustainable energy plan for Ohio.

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