Replies to This Discussion

Permalink Reply by Dan on April 2, 2012 at 1:44pm

I ran out the numbers on the spreadsheet to help compare the wells, and also to help predict what nearby landowners might expect.  It shows production per day per acre as well as $ per day per acre using current commodity prices.

The Buell well comes out on top with total revenue for gas and oil of $131/day/acre using todays prices.  If you had a 15% gross royalty stake you would make about $20/day/acre.  Reading the included notes helps put these numbers in context.

I've included an excel spreadsheet and pdf version.  With the spreadsheet you can play around with the price numbers and such.

Attachments:

• Utica_Production_2011_with_extrapolations.xls, 26 KB
• Utica_Production_2011_with_extrapolations.pdf, 48 KB

Permalink Reply by Buckeye Fan on April 2, 2012 at 2:42pm

Dan,

These are excellent! Thank you for breaking this out and making it very easy to understand.

Permalink Reply by Poison Ivy on April 2, 2012 at 1:53pm

Thanks for the spreadsheet, Dan. Very interesting. Good Work!

Permalink Reply by Peter Schueler on April 3, 2012 at 9:11am

Dan, Thanks much for the calc's and spreadsheet. One question I have is where the values for natural gas liquids (NGL's) are accounted for, in the gas volumes or in the oil bbls. I'm thinking they may not be accounted for unless the gas is processed downstream to remove them.  If NGL's are not accounted for there would be a significant discrepancy (under reporting) in well output.

Pete

Permalink Reply by Dan on April 3, 2012 at 9:44am

In the notes for the report it says that "condensates" would be included with the oil number, and the "wet gas" components are included in the gas number.  This would be pre-processing amounts.  So while they are accounted for, the added value of them are hidden, since we don't know what percentage of the gas is wet components, or what percentage of the oil is other condensates.  I don't think they are under-reporting the quantities, but for us to multiply the entire gas number by a dry-gas price is most likely under-valuing the worth of the wet gas.

Permalink Reply by Buckeye Fan on April 3, 2012 at 9:53am

The big question on my mind is how much these are "choked down" due to lack of processing facilities ?????

Permalink Reply by Dan on April 3, 2012 at 10:38am

I agree.  But to me, the point is that these numbers represent stuff that did actually come out of the ground during a time period.  Knowing it might have been better than that if they weren't choked down only makes me feel more encouraged, but I would feel pretty good even if I knew this was the best they could do.  Know that they can at least perform this well is good.

Permalink Reply by Buckeye Fan on April 3, 2012 at 11:12am

Absolutely, an article ran in the Columbus Dispatch this morning and it was strange that the head of the Ohio oil producers down played the numbers. The governor was playing them up and pushing his tax plan. It looks like politics as usual .....

Permalink Reply by Adrienne Baker on April 3, 2012 at 11:13am

I really wish one of you "techie" guys/gals would take these wells and put them on an overlay map with the new wet/gas lines.

 

Dan, thanks for your extrapolations, those are most helpful.

 

Interesting that all Chesapeake's wells are in a unit in the 200 acre and below range right now.

Permalink Reply by Philip Brutz on April 3, 2012 at 11:19am

BICS has the best Google Earth maps:

http://gomarcellusshale.com/group/ohio/forum/topics/ohio-well-maps