Rex Energy One Well Producing Two Layers

See attached jpg of Rex Harvey 3H.  This well is in Penn Township Butler County, Pa.  The well pad location is behind the Gumto Greenhouse on Meridian Road.  This well is producing at somewhat less than double the output of nearby Marcellus only wells. 

Phil

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Permalink Reply by KAR on May 7, 2016 at 9:59am
Ah, no you're correct. The 1H was never drilled. My bad. However, the 3H and 5H are both Marcellus. The Stebbins 2H is a Burkett well but it goes to the NW and the Harvey wells are going to the SE. The first picture you posted is part of the permit application. They permitted both a Burkett and marcellus lateral from the same top hole location but the DEP does not allow them to drill both laterals. They have to choose one or the other. Permitting both let's them be more flexible with decisions and not have to wait for a new permit to be issued.
Permalink Reply by Philip Thackray on May 7, 2016 at 9:40am

Harvey well plats attached.

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Permalink Reply by Jon on May 7, 2016 at 10:32am

Have there been any new presentations for rex lately?

Mike MurphyPermalink Reply by Mike Murphy on May 7, 2016 at 11:03am

They permitted both a Burkett and marcellus lateral from the same top hole location but the DEP does not allow them to drill both laterals. They have to choose one or the other.....its impossible to drill 2 laterals off one hole economically .....the cost would be so high the well would never pay for its self in 20 years of production

Permalink Reply by Coffeeguyzz on May 7, 2016 at 11:58am
Mr. Murphy
Now you've got me digging up the latest info on multi lateral wells. Lottsa new developments.
Back in 2011, Penn State Univ made a 131 page PDF on this which I just downloaded and will read later.
It is a technically feasible 'job' and, if workable in the Appalachian Basin, might prove very interesting indeed.
Mike MurphyPermalink Reply by Mike Murphy on May 7, 2016 at 4:56pm

too many risk involve to take a chance on a very expensive drilling project .....would cost 10s of millions of dollars to complete the well

Permalink Reply by Joseph-Ohio on May 7, 2016 at 10:55pm

I think that the potential to develop multiple laterals from one (1) vertical is the best reason ever for a lease to be 'strata specific'.

Permalink Reply by paleface on May 8, 2016 at 1:48am

Joseph-Ohio,how would a mineral owner determin the value for each layer? I would be happy with the royalty's percentage I agreed on.

Permalink Reply by Joseph-Ohio on May 8, 2016 at 2:26am

Thinking all it's ever worth to a land / mineral owner is the sign on bonus (which some say includes the delay rental) and the royalty percent; but that, seems to me, would / ought to be figured on a per well / per lateral basis.

Permalink Reply by Joseph-Ohio on May 8, 2016 at 3:28am

Thinking that each lateral is a separate well (except for the common vertical portion).

Thinking. that each separate lateral ought to be a separate negotiation.

But, the lessee may want to lump all strata into one lease (like what's happening (I think) in most cases now) and present their offer on that basis anyway.

Then there's the 'getting them to honor the agreement' and the 'getting paid for all the harvested natural resources' parts to be concerned about - and as we all are reading hear on these pages those parts appear to be a very valid concern.

Permalink Reply by Bluflame on May 8, 2016 at 3:15am
J-O,
Limiting a lease to one strata is easily accomplished via a vertical Pugh Clause in the lease. There is such a clause in my lease. Quite honestly, I would never have thought to do that. Tip of the hat to my attorney. It seemed to have no bearing on the lease economics.
BluFlame
Permalink Reply by Joseph-Ohio on May 8, 2016 at 3:41am

Thank you BluFlame.

Should I experience the need in the future I would appreciate your sharing your O & G Attorney's identity with me.

J-O

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