Wondering what is going on with the Verdun gas wells at Shelby. Comptroller data shows:
Passchendaele 1H dropping from 339,774 MCF in January to 234 MCF in February
Passchendaele 2H going from 26,251 MCF to 2 MCF (just started producing in January)
St Mihiel 2H going from 19,222 MCF to 2 MCF (just started producing in January)
Couldn’t get to the St Mihiel 1H data
I’m not sure if they were fracking the wells to the east in that time period. Would Verdun totally shut in the wells due to lower prices? Is this something that can be done on a fracked horizontal well? Passchendaele 1H has been all over the map since they started producing about a year ago.
Looking for input from more knowledgable people than myself.
Good questions and they are the right ones to ask. Typically shutting in production is not an option especially on a newly producing well…first reaction is the reporting is messed up ie lumping certain months together or it could be they are reporting based on when the gas is sold; it raises the question anyway of what months checks are being cut on. Granted with the gas price fluctuations, they could be doing their best to make these wells economic (bear with them) while honoring their marketing contracts. Also, maybe they’re waiting on a pipeline hookup - just throwing out ideas…only other suggestion is to call them until you get the answer you’re looking for.
Thanks for the reply. I actually contacted Verdun a couple of days ago and they said they were cycling production due to the low prices. Works for me; rather them sell it higher than lower. There’s another new pad near Shelby that they graded early this year but it’s been sitting empty since then. I imagine for similar reasons.
At least one royalty owner in those Shelby wells says they understand Verdun shut them in because of the gas price. They also say the rig is long gone from that last well they drilled off Wolfe Creek Road but it’s yet to be fracked, and nothing is happening on the new pad that was being built further south.
All that being based on only the past few months reversal in natural gas would surprise me, from mechanical but also the standpoint of what’s legally required to hold leases that are past their primary term…
In the old days “standard” (Producer 88) lease wording allowed shut-in royalty payments of $1/year per acre to hold any type well. These days lots of lessors insist on addendum wording increasing the payment amount, but also limiting shut-in royalties to only oil wells, not gas, with a max number of months a lease can be maintained by only shut-in payments. Verdun probably has several months grace period under most of those Shelby leases, and if a few months shut-in won’t hurt those wells potential maybe letting some of that high volume stay in the ground a while makes sense for everybody involved, but it will have to change eventually.