When we signed our lease, we were told that horizontal wells in the Utica would last for 20 to 40 years although the decline would be steep in the first few years. But I have heard now that wells are being plugged much sooner. Has anyone had their wells plugged that were good producers in the first couple of years? We are in Belmont County, Ohio.
most Utica wells are choked back to make last for years&years, but some companies opt to run them full bore to get as much profit as possible NOW, so they peeter out a lot sooner.
Would really be nice if there was some way to know if the wells were choked back.
I doubt if the producers would give that info to the royalty owners. They don't even have to report that to the ODNR.
Yeah, just wishful thinking haha.
In my limited knowledge, the choke of a well may certainly affect the IP and subsequent early production totals, but the E&Ps know their business (for the most part), and choking is the method to ensure the highest EUR for that well....time is not the driving factor here. Managing the decline curve is as important as IP numbers and NG price.....all this IMHO.
As a royalty owner, the long term 'flat' decline is more important to me than the IP....and chaotic NG price is secondary.
the answer to the question is a moving target and not known with any certainty. Utica wells haven't been around long enough to make longevity predictions. to make it even harder, as each year passes, new procedures make newer wells more likely to outperform wells drilled even just a couple of years prior. GPS mapping of early Mar/Ut wells look like spagetti on the wall. the laterals are not as straight as the diagrams always show. this results in "drill outs" leaving the payzone and getting close enough to other laterals resulting in "frac hits" and reducing production. today less of these problems are occuring and wells are staying in pay more accurately. not only have completion designs increased production with higher sand [proppant] loading and increased fracturing but reservoir management technology has become a more recent application. artificial intelligence and machine learning is replacing the guesswork of bringing wells online. alot of data points are used to bring a well on with the goal of maximizing production without blowing the sand out. sounds simple but to repeat the procedure as accurately as possible the software becomes a guide. hopefully the results will be wells that produce more for a longer period of time. that's why it is so hard to answer the question since the target keeps moving.
Thanks for the comments but I have a bit more information on the life of a well from publications from EQT and also the former Rice Energy.
Both companies have published decline curves for "typical" Utica gas wells in Ohio. From these reports, you can derive the percentage of natural gas that has been produced from a well over time. EQT's recovery rate is somewhat greater than Rice's but both show the dramatic decline of production in the first few years of a well.
Years of Production % of total gas (EQT) % of total gas (Rice Energy)
1 33% 26%
2 47% 39%
5 66% 58%
10 80% 71%
EUR 100% 100%
The total amount of gas recovered in the two examples was also different possibly reflecting well lateral length differences and other factors. Given the rapid decline of production in the first few years, the meaningful life of a well is fairly short.
nearly half the gas in place is still left in the ground based on the current examples. as recovery rates increase with technological advances we hope to see further improvements in newer wells. also the money is in total volume produced whether in 5 minutes or 500 years. i would always prefer the higher producer over the longest producer. money now is worth more than money 20 years from now.
If I was in producing well units, I like the way you think about producers draining the wells now as opposed to weening them out over many many years. $ now may well be worth more than $ over a lot of time. taxes may be higher then. On the other hand ,more $ now may be causing one to be in a higher tax bracket, causing paying more taxes. and the price of oil&gas may go way up in a few years,but who would know? It could go down. I suppose your AGE can also be a deciding factor. ,on either hand, you usually don't get to have your choice of producer or how they operate anyway.
It is sad that recovery rates are so low for the gas company, our country and royalty recipients. OT - what will future technological advances be like to improve the extraction of gas? Is it well/lateral spacing, fracking techniques or other completion techniques? How many years down the road to achieve higher yields from these wells?
we are seeing the recovery rate increase each year . when i compare older wells on the same pads to more recent wells off the same pads the production increases are very evident. maintaining consistent drilling through the highest payzone coupled with fracture technology like Gopher[tm] and reservoir management software to maximize inflow/outflow, allows for continued increases in extracting the huge amount of gas which is still left behind. half the corn field is still being left unpicked. that's where the real money is. volume is the name of the game in any commodity business.
Thanks OT - It sounds like full recovery isn`t possible despite new technology. How do gas companies decide what EUR will be for a well or many wells in a region? How actuate are these calculations? Are higher EUR`s primarily for investor notice? Do investor`s go back and review actual EUR vs predictions?