Devon Rhino 8_5, 14N-9W, multi section horizontal was supposedly spudded on 7/22 and would presumably be in completion stages by now. Does anyone have any information on how this well is looking?
M Barnes, one thought on Cimarex's increased density reservoir engineering exhibits you were discussing in response to Jon's question on 17-11N-6W:
When they ran the volumetrics to estimate the recoverable oil and gas on future Woodford and Miss wells, Cimarex used the same recovery factor.....35%. I saw the Mississippian calcs first, and thought "hmm...35% seems awful optimistic for a rock with such low perm". But then I saw they used the same 35% for the Woodford also, a reservoir with micro- and nano-darcy perm! There is no possible way that those to reservoirs have the same recovery factor, and neither of them will be anywhere close to 35%. If it were, we wouldn't need horizontal wells in the first place. The reason we need horizontal wells is because lower quality reservoirs are so tight that you can only drain a tiny, tiny fraction of the reservoir (probably <1%) with a vertical well. Even with a huge completion on a horizontal well I seriously, seriously doubt the actual recoveries ever exceed 10%. That is an insanely optimistic estimate on Cimarex's part -- done, no doubt, to help convince the commission that they need so many wells per section.
All that to say, 11N-6W is really good rock, i'm not denying that or trying to contradict your point. I'm just wanting to reality check the "pie-in-the-sky" calculations put forth in these exhibits...it makes the reservoir engineer in me freak out a little bit. If I were a mineral owner, I'd want a realistic expectation of what my minerals could actually produce someday.
So what is a realistic expectation a what a return one may get on a well being drilled with only 1 acre mineral right of 640. With 1/4 royalties and a 3 year lease? active wells producing? They are drilling about 9000+ down and 14000 horizontal, and how long will it produce what can I expect if anyone knows an estimate?
Justin,
I agree with you. I did not take a hard look at the recovery factors, just the ballpark "how many wells". The best recovery I have seen in the Woodford is about 4-7%, so even if they could get to 10% that would be great with today's technologies. The Meramec is a bit better from a poro/perm perspective, but it will probably not go to 35%. That is closer to a conventional reservoir typical recoveries onshore. Offshore overpressured zones are a different ballgame.
However, the OK state legislature has approved long reach horzizontal wells into conventional reservoirs as well as shale reservoirs, so that leaves some upside in the recovery factors for more conventional reservoirs. Horizontals can do a lot of good there if the zones are not already depleted.
If mineral owners want a more accurate prediction of what their minerals are worth, they would probably have to hire an experienced reservoir engineer to give them a better answer than the "ballpark" ones. Our family does that about every five years for our entire portfolio so we know where we stand.
Stacy, your answer totally depends upon what Section, township, range you are in and what reservoir. Also depends upon if they drill more than one well and if you have stacked reservoirs.
I don't know about stacked reservoirs but its in section 19 13N 6W
David Evans, you say your minerals are near the old Downtown Airpark? That is in 11N-3W, in the heart of a very densely developed and populated area. I wouldn't expect anything to be done in this area...maybe ever.
Stacy,
Golden 1306 1WH-18 was completed in the Woodford at 88 bbls oil 932 mcf gas March 2016. Brookie 1306 1UM-18 set surface casing and they plan to come back in and drill the rest. 2016. So you have at least two zones in 18. Schulte 1306 1-15HM drilled in late 2016. 261 bbls oil 977 mcf gas in the Mississippian. Heupel 17-13-6 1XH multi drilled in 2015. Started off at about 225 bbls oil 1825 mcfd (two sections). Oyler 1307 2-24MH completed at 382 bbls oil 1171 mcf gas in mid 2016. You can see the range.
You might get from $1700-$5300 in payouts over the first four years at one acre at 1/4th. Just a guestimate. I have put in the tax rate and no post production costs. These wells may or may not last for 30-40 years at low rates. If they drill more than one well (which is happening in 13N-7W), then there will be some upside.
Well the man I talked to said right now when they finish in section 13 they will drill here in section 19 so from what I am seeing your putting here, its good...for the long term. I had the option of a lessor bonus with the higher royalty of 1/4 and chose that rather than the way bigger bonus and the 1/8th royalty because I knew it would pay off in the long run. Thank you.
I mean long term these can last 30 to 40 years that is good.
When you say 1700 to 5300 in payouts in the first four years as an estimate is that yearly or is that a total of all the 4 years? Hopefully that is yearly.
Other thing you want to be sure about is the lease language for "deducts." These companies are killing landowners whenever they can by deducting enormous amounts for gas marketing, transportation, compression and whatever other costs they can get away with. I have royalty associated with some very old leases and the deducts have been over 1/3 of product sales revenue in many cases.
Stacy, all four years total, not yearly, at estimated oil price of $48 and gas at $3.00.
Friend me and I can share the spreadsheet with you.
got a application for emergency drill on secton 32 township 11 north Range 5 West ......then got a letter saying dismissing ...we called and was told that letter was a mistake, are drilling...on 29 and 32...who knows...might be , might not...might have to take a long drive and see what is really going on..
I guess we will be pleasantly surprised in a couple three months or not....Section 32, Township 11, West, Range 5, Canadian County.....
Section 24 Township 12N Range 07W
I'm new to this forum, I'm looking for any information on activity in this area, either new or producing.... My family owes mineral rights in this section and I wonder if anyone else has specific input about the area.
Kurt,
The Ragland 1-24 well by Sandridge was producing until December of 2016. Stone Oak Operating LLC just permitted to go back into the well and do a recompletion. It is spaced at 640 acres, so you should have gotten royalties from the old well and if they are successful, get royalties from the recompletion. In general, there is quite a bit of horizontal drilling pending all around you. If you get an offer to sell, don't jump on it without checking with the forum because most of those offers are low to actual value.
Anybody have any news on the Devon RHINO 8_5-14N-9W 1HX which was apparently recently drilled and I would think in completion stages? I am getting several lease offers for my ORRI in section 5 which seem decent to me.
S B C-no completion report posted yet, nor any production listed at the OTC. May be a few more months until you see something. When you look at sales offers, ponder whether they are the value for one well or the value for perhaps many more future wells. Usually, the offers are low.
Thank you, M Barnes,
I did receive royalties from the old well, I have signed a new lease with Stone Oak. I hope I did good @ 1500 per net mineral acre and 1/5th royalty. I tried to negotiate a better deal and had offers to sell but decided to sign a top lease at the time instead. I'm glad I did that but, I'm not clear on what if any expectations I should have. Mostly I wonder how long it takes to recomplete, also I wonder what the average production levels are for a well like this and if it is feasible to assume they will drill more wells in the same 640 acres or not.