Rex J. Anderson Well Production Numbers

Rex just released the 5 day sales rates for the J. anderson wells.

It states in part:

The five-well J. Anderson pad, located in Guernsey County, Ohio, was placed into sales from its resting period at an average five-day sales rate per well (excluding downtime) of 1,886 Boe/d (40% NGLs, 40% gas, 20% condensate) assuming full ethane recovery and an average natural gas shrink of 12%. The five wells produced with an average casing pressure of 3,293 psi during the five-day sales period on an average 18/64 inch choke. The five-well pad was drilled to an average total measured depth of approximately 12,873 feet with an average lateral length of approximately 4,250 feet and was completed in an average of 28 stages, utilizing the company's 150' "Super Frac" design. Based on composition analysis, the gas being produced averaged 1,257 BTU.

 

 The full release is here:

J. Anderson results

 

Looks good for SE Guernsey.

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Permalink Reply by RB on December 7, 2013 at 1:52pm

Think about it from the other side.  That 80% needs to cover capital investment, manpower costs, other costs of doing business and include a profit.  I don't think they would be doing this expecting a small ROI.

I presume we are stacked.  I wonder how long it will take them to tap into the other layers.  Again, I don't think the goal would be to take decades.  I wonder if they can extract different layers simultaneously.

Permalink Reply by bo boboski on December 7, 2013 at 2:05pm

Remember,too that the Mariner and Atex pipelines as of next month will take the wet gases to the east coast AND to the Gulf coast. The chokes will be opened up, they will be able to sell ALL the oil/condensate/gases from these wells. I:m thinking $75. per BOE. will be more like it. ALSO those laterals on the J Anderson wells are about 1/2 the length of other wells. AND, don't forget that they can also drill into the Marcellus and the Upper Devonion formations some day from the same pad! As far as the decline curve, they could even drill IN BETWEEN the 5 laterals they have already drilled.  I'm thinking the Companies trhat are currently offering $11,000 per acre in that area to buy mineral rights may be getting worried that people may not sell now, unless totally broke,or just ingnorant.

Permalink Reply by gary SWF on December 7, 2013 at 3:02pm

"Considering a production curve, remember after one to one and half year the well will be producing "only" $60 per day per acre. The production curve then flattens out and you could see about $50 per day per acre for many years, which is about $1800 per year per acre.

So:

Year one: maybe $36,500

Year two: maybe $18,000

Years three through 15: maybe $1800 per year"

Dave,....... could you have missed a "0"?......maybe it should be $18,000/acre/year??????...50 X 365=  $18,250.......Gary

Permalink Reply by David Perotto on December 7, 2013 at 3:42pm

Correct. Which makes it even harder to believe.

Permalink Reply by Philip Brutz on December 8, 2013 at 8:45pm

Utica Shale had a very informative thread on chokes:

http://gomarcellusshale.com/forum/topics/why-would-you-choke-a-well

015334grltd9mPermalink Reply by 015334grltd9m on December 7, 2013 at 1:27pm
Next month as the well we manage is connected i will know on the ground what they make.
Permalink Reply by Trapper on December 7, 2013 at 11:33pm

When that time comes please do share this info with us Ron.

Permalink Reply by Philip Thackray on December 7, 2013 at 1:52pm

Hello,

Barrel of oil equivalent can be deceiving when analyzing a well.

For a very wet well like this one Boe comes from converting the methane output to Boe and adding that to the condensate and NGL barrel amounts.  From the Rex presentation:

Methane is average 4473 Mcf.  Divide by 6000 to get Boe so Methane Boe = 745 Boe

Condensate = 378 Barrels and

NGLs = 762 barrels

Total = 1885 barrels of oil equivalent

To properly analyses this, each component must be considered separately OR we notice that these wells look a lot like the Range Washington county wells shown at the Range Corporate Presentation of November 18 page 17 (although no where near as good in total IP and total liquid contents).  (I would post these tables and graphs but I'm not at my normal computer).

A summary of the typical Range well is shown on page 42 of that report.  The right hand most bar is pretty much what we are dealing with in the Rex presentation.  Based on those numbers and published Rex numbers and the unit size of about 500 acres, the dollars per day per acre (for this five day sales period) is $1346.00 /day-acre.  And 20% of this would $269.23/day-acre.  (Remember, the condensate prices and NGL prices are per gallon.  Multiply by 42.)  Compared to Range's Wet Marcellus this is a relatively poor well.  It is even below the normal Rex well in Butler County.

I did this in a hurry because I've got run and get the livestock in.  I'll check it again later.

Phil

Permalink Reply by bo boboski on December 7, 2013 at 2:52pm

Short laterals?

Permalink Reply by bo boboski on December 7, 2013 at 2:55pm

$8,000. per acre ,per month?  You calling this a "poor well"?  I'd be happy with 5 acres in this unit!

Permalink Reply by Rick on December 7, 2013 at 6:50pm

I would be happy with these dollar amounts also!

Permalink Reply by Trapper on December 7, 2013 at 11:53pm

Wouldn't it be nice if the operators would all report in landowner friendly terms like how many dollars per day @ current market price. That boe thing is such a sleezy method of reporting IMO.

For sure the pencil pushers at headquarters are working the numbers in real dollars , not boe kind of b.s.

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