Replies to This Discussion

Permalink Reply by TM on August 26, 2012 at 7:00pm

Is this well producing gas, oil, and NGLs or what? I would be happy with 600 an acre but more would be better. I guarantee these wells are choked back or they are already on a decline curve who knows. What are the production numbers on this well just curious?

Permalink Reply by AJ on August 26, 2012 at 8:12pm

that is all three

for example: one month

approx 1426 bbls oil, 56000 gal of NGL and 27000 mcf gas.

far cry from 1000 bbls and 3 mmcf per day as they claim.

Is it choked? I was told it was opened back up. if so it is not a good well.

 

Permalink Reply by TM on August 26, 2012 at 9:46pm

Yeah really. That is only like 40 some barrels of oil a day for the 1426 barrels a month.

Permalink Reply by PK on August 27, 2012 at 8:56am

"Doing some basic math on those numbers does not lead me to $300 and acre a day "

That should have said "month", typo. Sorry about any confusion that caused.

Permalink Reply by PK on August 27, 2012 at 8:59am

AJ, thanks for the info. I agree that they sold it a whole lot better than what we are seeing.

I know that pipeline from Burgett's east caught "your" well, do you know where it went from there? Has it tied into a "main line"? I wonder if because the infrastructure is not ready (pipelines and processing plants) if they still have many of these wells throttled back to limit product going to market. That might be just wishful thinking on my part too.

Permalink Reply by Bryan on August 27, 2012 at 10:46am

The pipeline from Burgett's ends up at Area 330, where the compressor station is under construction and is the gas is currently going into a Dominion wet transfer line.

Permalink Reply by PK on August 27, 2012 at 9:18am

Donald,

My lease, and many around me were intitated with Anschutz who then sold their stake in this region to Chesapeake. I am locked into them until my lease expires in 2 years and 2 months. At that point they have the right to renew the lease at the same terms. In short, I'm locked up without options.

Permalink Reply by PK on August 27, 2012 at 11:31am

Bryan,

Sounds like the have the pipeline in place then to get the product out to market, at least from that well.

Permalink Reply by TM on August 28, 2012 at 7:50pm

Someone should post this thread on the main page of this site. More people will see the thread and can discuss it more in depth. Just a thought.

Permalink Reply by JR on August 28, 2012 at 8:28pm

Agreed. Please share on main site. This is the most solid info I've seen on this site in awhile. I appreciate you guys sharing. Even if it equates to CHKs fuzzy math. It's definitely helped set some level of expectation.

Permalink Reply by bret rothwell on September 1, 2012 at 9:08pm

A simple method of computation of expected royalty income follows:

Take the case of:

A)  28 acres in a 184 acre unit 12.5%  = 28/184 * .125 = .019 net royalty interest

B)  84 acres in a 169 acre unit 17.5%. = 84/169 * .175 =  .086 net royalty interest

Average Price of Sold Item: Oil  $90.20/bbl, Gas $2.70/mcf,  NGL  $39.00/bbl

Royalty income as determined at "point of sale": 90.20/bbl OIL, 2.70/mcf, 39.00/ bbl NGL or actual sales price on a "NO COST DEDUCTION" lease, if such a thing exists.

Royalty income as determined at wellhead-sales point calculation or backing-up pricing (on a common lease) less 5% severance tax, $1,250 per month LOE/well (processing costs est, no transportation/pipline fee included here): prices net to royalty:

NET to Case A) $1.65/bbl OIL, $0.04/mcf, $0.70/ bbl NGL - LESS LOE $23.75 and - LESS processing costs $0.51/bbl NGL

NET to Case B) $7.42/bbl OIL, $0.18/mcf, $3.15/ bbl NGL - LESS LOE $107.50 and - LESS processing costs $2.30/bbl NGL

Find the Gross Reported Production/ Unit, multiply by the above NET to Case, find an approximation of your monthly royalty check, subject to other deductions by the Operator of G&A, marketing, maintenance, facilities, ect.

Production of oil and gas occurs under normal depletion of energy to move the product from the reservoir to surface, and the rates of decline are commonly forecast or portrayed by infamous "TYPE CURVES". These curves are originated and "cast in stone" to lure or selll drilling programs to investors. If you track the press releases of your local operator you will find these charts never seem to get adjusted with actual production data, but rather, are reinflated with time, as the play matures, and the CAPEX money is exhausted. So, as a minerals owner, you can get a sense of what will happen to your monthlyl checks over time. See the chart below, of which there is no magic, it's just one of hundreds we could use, but it demonstrates my point, that your checks will diminish in a hurry:

So a first month check of $1000 will generate a total income  in the first 60-months of ~ $17,280, before taxes and without the adjustment for constant operations deduction. The last check of 60 will be something less than $100 BITX and LOE.

Permalink Reply by momoney on September 1, 2012 at 11:25pm

brian,how much did you recieve and how do they pay for the frac ponds,i know they put one on jim nobles old farm you bought,do you have hookups or info you could share i would like to see if there interested in putting one on  my property

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