Depending on who/what you read, the price to be profiitable in shale areas across the US are different… the latest I read was the Baken formation in ND is ~$42 per barrel, Tuscaloosa Marine shale needs ~$79… Is Kingfisher considered a low cost or high cost extraction area? What price point is required for Kingfisher to profitable?
An excel spreadsheet allows you to make your own calculation if additional info can be found. The cost to completion of a producing well (from recent pooling orders in the county by Durango E&P) is $4.25 million. The missing number is the production rate (barrels/day). Info on how good the Wells are seems to be VERY hard to come by. Does anyone know how to reliably come up with recent flow rates? I understand that the initial reported rate with the OCC usually overstates a well's bbl/day. Decline rates are also very high. Direction to sources of such info as bbl/day and expected decline rates would certainly allow improved determination of R.O.I.
Thx Archie. I assume the $4.25mm represents the one-time costs (drilling, fracking, setup,…). 1) Does the Decline Rate dictate the timeframe (pay back period) they writeoff the one-time expenses? 2) what is the estimated operational cost when the well is producing?
You can look up the actual production at the Oklahoma tax site. It is four months behind. The completion report is only from one day of production, usually before the water is cleared out. It can be high or low, so it depends. Costs depend upon whether it is vertical or horizontal.
| https://www4.oktax.onenet.net/GrossProduction/PublicSearchPUNbyLegal.php |
the well I am associated with is 20-19n-07w. It shows that the well was active 12/1/2014, but no production history. Does ‘active’ indicate that it is now producing?
Yes, usually it means it has either spud (started drilling) or is producing. You can track it here. Use a leading zero. I assume you mean the Polar Bear. It did spud. No completion report yet, but that is not unusual. You will not usually get a division order until four-six months after completion. It may not be finished quite yet.
http://imaging.occeweb.com/imaging/OGWellRecords.aspx
Well expenses for production will be different for every company. Depends upon how efficient they are.
Yes, the Decline rate does dictate how long it takes to pay back the well. Also included are the drilling and completion costs and the price of the products.
Thanks. I have been tracking the Well Records OCC imaging site. The drilling was complete by the beginning of September, the tanks and setup were completed by the end of September. They have been going back and forth on a Location Exception and I didn’t think those negotiations were complete, so I was surprised to see the ‘active date’ of 12/01/2014 on the OK PUN site.