Upper Devonian shale - Vertical vs horizontal drilling

Upper Devonian shale or more specifically Rhinstreet strata in certain areas has produced many prolific and long lasting natural gas production 20-40 years, low decline rate, less expensive, more pearmable sandstone areas.

My question relates to the benefits or lack thereof for drilling vertical vs

horizontal.  Is the vertical well considered "conventional" and  the holrizonal considered "unconventional"?

Obviously the cost of the horizontal well is more expensive but it seems that since the strata is more pearmeable the fracking might be easiers and less expensive and more environmental friendly and much more productive with longer laterals?   Is the cost of horizontal drilling not worth the increased production of a horizontal well?  Does it make sense to test drill vertical before considering horizontal drilling?  Or it drilling a vertical well an inexpensive way of holding land by production.

The gas company that owns our lease has an existing Medina gas well that is producing almost no natural gas, my last royalty check was $3.80 for 110 acres (the total leased area is 270 acres).  There is no Marcellus in the area, the Utica is at 7000' or so and the first test well about 4 miles away has not be flow tested or completed.  There seems to be 100's of Upper Devonian in the area that have been producing natural gas for years, mostly older shallow vertical wells. The current price of gas may be too low at the current time to encourage any drilling but a local gas company has pulled a permit for a new well (around 2,800' and I am guessing a vertical well...they were planning to start drilling this spring but with current pricing-wlho knows!!

Can some of you more knowledgeable people shed some insite...

the land is located in NW Pa. near the NY border--Empire Energy and Stedman Energy are mostly in this area.  A new gas company, Nucomer Energly purchased our 270 acre lease along with 21 other properties (1,400 acres) and they recently completed a $10million gas processing plant nearby and are processing the natural gas into byproducts.  My interest is to increase production at some point.

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Permalink Reply by KAR on January 21, 2015 at 5:06am
Yes, generally vertical wells are considered conventional and horizontal wells are considered unconventional.
Permalink Reply by Dexter Green on January 21, 2015 at 5:45am

"Or it drilling a vertical well an inexpensive way of holding land by production."

It really depends on a lot of factors.  

Permalink Reply by Jim Litwinowicz on January 22, 2015 at 2:16pm

Rex has drilled several UD horizontal wells in southern Butler Co. I think that Range drilled a few also. Reports are that they are getting a lot of liquids. Also, the original production is lower than than Marcellus wells but they have a very low decline rate, which makes sense as the UD is more porous.

UD wells are cheaper to drill because they are much shallower.  One big issue is that there are a lot of legacy wells into the formation and they would have to be plugged before any horizontals are drilled adding to the costs.

Permalink Reply by george m vietze on January 23, 2015 at 12:59am

Why would a gas company chose to drill a vertical shallow Upper Devonian well vs a horizontal well?  Obviously, the vertical well is less expensive but does the cost of the horizontal well proportionally exceed the increased production value or is the vertical well a test well to determine the feasibility of aditional horizontal drilling?  The reason I ask the question is that a local gas company has pulled a permit to drill approx. 2,800' vertical well just 4-5miles from our property,

another larger gas company owns hundreds of old Medina wells in the area and a midstream gas company is building distribution lines and has completed a natural gas processing plant within 15 miles from the area which they say already is at capacity and they have plans to expand.  Is it possible or an advantage to a gas company purchasing natural gas a todays low prices, processing that gas into its by-products and be profitable.  Looking for an incentive to encourage drilling of lower risk, less expensive, more pourus, low decline.  Empire Energy a New York based comany that is pretty much shut down from drilling in NY specializes in these types of wells but with the current price of gas it becomes challenging.  I was wondering if a model of re-processing the gas at al processing plant an opportunity?  The midstream gas company who owns the processing plant said they were at full capacity but have plans to expand but they said that they have no interest in a joint venture with another company to provide gas at todays prices and providing the provider with an upside after processing.

Can you provide any logic to this scenerio?  All I can discern is the owner of the plant can purchase all the gas they can process and do not need to share in the profits with anyone else.

Permalink Reply by WLW on January 23, 2015 at 3:07pm

If I had a well only producing $3.80 in royalty's for me, I would be looking for a good attorney and a new lease.

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