Production Units, Size, Locations, and etc

Lets discuss here about the issues after the lease and well. Right of ways, production units, numbers of production units (each well has a production unit - some 6-8 wells in same area), number of acres in production units.

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Permalink Reply by Matt Kurth on December 17, 2009 at 5:00am
I am very interested to find out what the "average size" of the well locations are (acres?,square feet?) for the Marcellus play. I have heard 3-5acres, but some of the sites I have seen seem larger. Also what size the rigs are that most operators are using. Any help on this would be appreciated.
0jw0dsu4txfuvPermalink Reply by 0jw0dsu4txfuv on May 5, 2011 at 11:20am

Well pads are different sizes as are the size of the drilling rigs that drill the wells. A good sized location can be from 3-5 acres. This allows the wells to be drilled in stages. The stages are drilling and completion and production. After the wells are produced a while The Operators can then

decide the best path for future wells.

Permalink Reply by Jean Michel LeTennier on January 5, 2010 at 10:01pm
Jan 4, 2010
By OGJ editors
HOUSTON, Jan. 4 -- Ultra Petroleum Corp., Houston, plans to buy 80,000 net acres prospective for Devonian Marcellus shale gas in central and northern Pennsylvania from an undisclosed private company.

The $400 million deal, expected to close in late February and retroactive to Oct. 1, 2009, will boost the company’s holding in the play to 250,000 net acres with the potential for 1,800 net drilling locations, said Michael D. Watford, chairman.

“With this acquisition, we believe that our net recovered resource in the Marcellus alone will exceed 8.5 tcfe, an increase of 3.5 tcfe from current estimates,” Watford said.

Ultra Petroleum drilled 30 Marcellus horizontal wells in 2009, 13 of which were producing in late December. Initial production rates for the producing wells average 7.5 MMcfd, and preliminary estimated ultimate recoveries range from 3.5 to 4 bcf.

The company started 2009 with 288,000 gross (152,000 net) acres in the Marcellus. Through a combination of land acquisitions and swaps, including the acquisition to close in February, it has added more than 192,000 gross acres, nearly doubling its position to 480,000 gross (250,000 net) acres.

The company’s expanding core position is concentrated around Tioga, Bradford, Lycoming, Potter, Clinton, and Centre counties.
Permalink Reply by Rita McConnell on January 18, 2010 at 7:27am
One of the best features of horizontal drilling in the Marcellus is the ability for producers to locate multiple wells on one well pad. With vertical wells, each well needs its own pad -- about a five acre distubance. With horizontals, one pad of about 7 acres or so can hold as many as seven wells, perhaps more. So instead of five acres allocated for each of seven wells --about 35 acres -- you get seven wells on seven acres. Big difference. A pad of multiple horizontal wells can extract about 640 acres or so. After the wells are drilled, completed and in production, the producer will usually maintain a right of way to the site for well tenders or to faclitate any additional maintenance the well or wells may require. For most landowners in a unit, there should be little disturbance after the well(s) is in production. For landowners on whose property the actual pad is located, there will likely be more interaction wih the producer. These landowners also usually receive an additional "damage" payment for hosting the well pad on their acreage.
Permalink Reply by CAP on April 18, 2010 at 1:51pm
Also, the landowner with the actual pad on property will likely have their whole property in the unit. I wonder aloud, if a good horizontal is producing well over 5 MMcf per day, is it safe to say a pad with 6 wells would likely produce over 30 MMcf per day, anyone?
Permalink Reply by LAE on April 19, 2010 at 1:23pm
It's pretty simple math, and while there is a decline curve, it appears it's not as steep as initially estimated.
Permalink Reply by hunter777 on April 20, 2010 at 5:31am
What is your understanding of the decline curve?

How steep is it?
Permalink Reply by Daniel Morris on May 5, 2011 at 7:42am

I was told today that Chesapeake plans a 1,000 acre production unit. Is this possible?

Also, does anyone have an answer on the royalties related to the number of legs on a well?

Permalink Reply by Todd Charles on May 5, 2011 at 8:26am

Hi, Daniel

Each horizontal is considered a well - and you will collect your lease percentage from every horizontal drilled in your production unit - particularly if the pad is located on your property, because all of your land will be in production.

The size of the production unit is only limited to how many contingenous acres that Chesapeake can sign - and that they choose to put in production. One thing they like to do is "hold by production" the land they have leased, and they have to be active on their leased rights, to keep them - declaring a 1,000 acre production unit allows them to hold those leases with minimal drilling right now (while NG prices are still relatively low). 

With the rapidly expanding technology today, I guess China is the limit of how far they can drain... lol

Kit

Permalink Reply by Robert Chiasson on May 5, 2011 at 8:31am

I don't know of any reason why they could not have several multi-well drill pads in the same unit if their leases allow it.  My understanding is that all legs of all wells would contribute to the same pot of royalties for the unit, to be pro-rated among all owners based on acres. 

Tricky concerns would include:

o  The driller might tie up the whole 1,000 acres with a single producing well, resulting in low per-acre returns to landowners while the company looks for a sucker, oops, I meant Drilling Partner, to pay for the actual development.

o  It could be difficult trying to audit how much was actually produced, and what it was actually sold for.  This could make it hard for landowners to be sure they were getting their fair share of the production.

0jw0dsu4txfuvPermalink Reply by 0jw0dsu4txfuv on May 5, 2011 at 11:15am

Sir you are way out of line and your statements aren't truth. The gas that is produced is shipped via a pipeline and there is digital metering devices for measurement.

 

Sure the Operators are trying to tie up all the acerage at the  low gas prices but if the price goes up their check will increase. The actual % varies from lease to lease.

They  will drill wells to keep leases. Not neccessarily multiple wells on each pad.

Generally gas units are 640 acres. This can increased depending on the shale run.

Gas is good for PA and good for the USA.

 

2o1ieqppm25rzPermalink Reply by 2o1ieqppm25rz on May 5, 2011 at 3:22pm
Homer,  When does the gas co. establish there unit of landowners before or after the permit?? Is the unit public record,  like something filed at the county courthouse??  Thanks

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