Justin,
The well was temporarily abandoned after it was drilled by Chesapeake and sold to Newfield; the landman from Chesapeake told me that Newfield would not let them open it.
The decline in production you described is startling; my checks took a big dive and I was wondering what happened!
Thank you for your advice.
Marcie
yes, it is, but as Justin mentioned, its not really due to NFX choking/restricting the flow. It may be a completion issue, or a dpeletion issu. If you look at section 30/31 you will see the Kenneth well which was completed in 12/2014. The Stangl 6H (the 2nd well) was completed sometime around August 2016.
The original well, the Stangl 1H was completed around Feb 2016. Only the portion of the Stangl 1H's lateral that is located in section 25 is offset by another well bore. (See attached 'OFFSET MAP') DVN completed the Northwoods 26 around the same time in February as the Stangl 1H. They both came online at a similar time. Interesting that DVN's northwoods' frack was significantly larger on a per foot basis than CHK's stangl frac.
As Justin pointed out, one of the potential issues the 6H is facing, that the 1H didn't face is that the offsetting well (1) came online a few years prior, (2) the 1H has approximately 1/2 of the wellbore that is not offset by another well and therefore potentially has a larger drainage area.
Further, as the 6H is offset by the Kenneth well on the section line of 16N 8W S30 & 31there4 is a chance that the formation was somewhat depleted on eastern side of the lateral, as well as the potential that the frac was much less effective as the frac could have connected with the Kenneth's well. If you look at the production profile for the Kenneth, it exhibits a sudden and material change in production immediately following the completion of the Stangl 6h, which could be interpreted as interference (see 2nd Attachment).
83-OFFSETMAP.JPG (47.6 KB) 84-KennethsproductionchartNotedeclinestartinginjuly2016.jpeg (55.5 KB)not at all (referencing buying stock)
I've done this....also works on the frac guys...or even better catch them at the bar after a shift/weekend, or if its a surface engineer, get them in a continuing ed course - you will find out all the dirt on the company.....
Justin,
I think the big production loss came very close to Newfield taking section 25 over from Chesapeake. It seems more than odd that production would suddenly fall by 2/3.
Newfield was also in no hurry to get that second well online. You still don't think they would curtail production? A lawyer named Moreland Sherrod who works in the oil business in OK told me that is what happened.
Marcie
Moreland is misinformed.
I did some digging for you and got the straight dope.
NFX closed on the CHK acquisition on June 30th, 2016. At that time, the Stangl 25-16-9 6H was what we call a "DUC" (pronounced duck...as in feathers, quack quack), aka "drilling but uncompleted". They just hadn't fracked it yet. So NFX never had the opportunity to "retrofit" the well for reduced production, because it wasn't producing yet. This is confirmed by both the original 1002A filed by CHK on the well, which shows no completion, and also the 1073 transfer of operator form which in the exhibit lists the Stangl 25 as "W[aiting] O[n] Completion".
There is no updated 1002A filed yet on the Stangl 25 form NFX, but there is a FracFocus report on it which shows it was fracked from August 21st-29th of that year. If you pull the monthly production from the Stangl you'll see first sales in September, which confirms our diagnosis.
The Stangl 36 is a badass well, and it's production never diverged from normal decline all through 2016 at all, and especially not during the early summer, the time period in which your your payments dropped 2/3rds. What happened to you is this: The Stangl 36 was brought online in Feb 2016. It normally takes 4-6 months for royalty owners to get their first check on a new well....and that first check is usually a huge one. Let's say Newfield was really quick and got you your first revenue check at the end of May. That check will be for all revenue from Feb, Mar, and maybe even April. The check you received in June, when NFX took over, would have actually been for only the preceding month of production, or perhaps from two months back. The point is, your first check would have had more than one month of production on it, and the next check would have just been for one month. So the change from getting paid on A). multiple months vs just one, plus B) the production in month 4 being less than that of the first month or two due due to natural decline, equals your 2/3rds drop in revenue.
Newfield "restricting" the flow, "retrofitting" the well, or doing anything other than making as much oil and gas as they possibly can has absolutely nothing...zero...nada...zilch...NOTHING to do with it. I promise.
It is also worth noting that the Stangl 25 sucks compared to the 36. I won't belabor the offset drainage points, as Jeffrey thoroughly covered it above. The point is the Stangl 25 has made 20% of the oil that the Stangl 36 did. Unless there is some mechanical issue with the well (casing failure, massive sand production, etc) that caused them to lose part of the wellbore, I wouldn't look for anyone to come drill this section for a while.
Sorry to say, you are probably stuck with what you have for the time being.
Again, my $0.02, YMMV. :)
80-Stangl1002A.pdf (9.88 KB) 81-Stangl25FracFocusReport.pdf (134 KB) 82-Stangl1073.pdf (598 KB)Justin,
I could not read your latest reply.
Marcie
Also realize that drilling techniques are much better now than they were just a few years ago. I know a landowner that had a well south of 33 right in the sweetspot, where the Gilliam and other huge CHL wells are. 16-10, Blaine County. Awesome results. His well produced something like 160 BBLS oil and 300 MCF of gas. A terrible well. Newfield is now going to drill seven more wells on it, initial holes just drilled. The guy turned down 30K an acre on it (160 acres).
Gilliam wells aren’t going to pay for themselves. I have minerals in that section. Goes to show not all rocks are equal.
That’s true. But the Ludwig and several others are. Nothing is certain in this business.
