Replies to This Discussion

Permalink Reply by Bluflame on August 29, 2012 at 2:18am

JD,

  I don't dispute your math, although there are lots of variables involved to get to the actual number. The cynic in me says the bigger units are at least partially about HBP for the E&P companies. i.e., they can HBP a whole lot more land quicker (and cheaper) by drilling one lateral on every 1280 acre unit versus much smaller units. If you look on the investor reports from the various E&P's, you will see they make a big deal about the amount of acreage they've HBP'd in the various shale plays.

   At the end of the day, the total money from a bigger unit versus smaller should be the same, assuming the same acreage in the unit. The bigger unit likely spreads the $$$ over a longer period of time. An optimist would say the E&P's are saving us from ourselves!

BluFlame 

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Permalink Reply by Kathleen on August 29, 2012 at 3:17am

Hi JD,

You have to figure in the decline curve. (I didn't run any of your numbers I'm just talking about the decline curve) On that link I provided it already is being shown in royalty checks but these are new wells so who knows if they were chocked or wide open.
In the Marcellus the decline curve to me is severe at around 75-80 the first year to two years.
Even if we do not see such a severe curve one will happen here so each check month after month should go lower. Maybe hold steady for say two months but by the end of year one it will be much less than check one. As each new well is drilled and goes on line you will see a bump again but by than you may know and all of us may know what to expect.
I hope everyone just remembers after those 1st few checks about this decline curve.

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Permalink Reply by patrick on November 30, 2012 at 2:56pm

There planning on putting a well on our property . My understanding is that they plan on drilling three legs at once because to move the equipment is rather expensive. the game changer may be that there are a lot more rigs in the area alowing them to leave a drill  at a site for a longer period

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