Well, this one is in reply to a posting earlier this week about the Red Headed STRANGLER…If the rumor of 60 bpd is correct, then what that really means is that within 3 months of the actual first run of the well, the well production will drop by 50%. You can go to the Texas RR site and look at the production logs and they all pretty much report the same thing whether you are reading production logs for the 1960’s, '70’s, '80’s etc. The well initially flows at a 50% percent higher rate the first three months of production that it does for the rest of the life of the well, and it really does not matter what depth you are at etc. etc. So for all practical purposes, the Red Headed Stranger is sadly a bust. Whether you want to call it a dry hole or not is your call. Fact unfortunately is that it might as well be a dry hole at 30 bpd.
Not all wells are profitable, although a well that was reasonably close to profitable now may become profitable if technology improves the eventual return. It could happen if the well can produce and hold the lease for 20 years. This leads to the subject that some companies are not in the production business alone, some seek to hold acreage that they can profit from in farming out or directly assigning to another company in the future.
It looks to me more like the status is uncertain, not clearly a bust, since it seems to be a vertical not a horizontal well. It was initially permitted as vertical, then amended to horizontal, then recently amended back to vertical. My understanding is that it’s not unusual any more to drill initial vertical test wells at much lower cost and analyze the well logs for horizontal potential. Vertical wells starting at 60 bpd might have poor or good horizontal potential, depending on the well logs, which the driller isn’t sharing. Am I missing something here? Perhaps some of you can explain. Thanks.
Robert, a well producing 30 bbls per day would gross $865,000 per yr so I don’t believe the oil company would just assume hit a dry hole. Especially if it were a vertical well which cost only around two million to drill.
If the drilling was a horizontal well and produced just 30 bbls per day, then yeah, that sounds like a real money loser since they cost between 7 and 10 million to drill. (depths ranging between 8,000 ft and 12,000 ft. )
I seriously doubt any horizontal well drilled in the wolfcamp shale formation is capable of producing just 30 bbls per day but I guess we shall wait and see.
Whether a well is profitable to operate, can also have a lot to do with how much salt water is produced along with the oil.
Sometimes an oil well can actually produce more oil after a few months of operation if the operater can figure out how to seal off excess amounts of salt water production.
If Red Headed Stranger is a bust, why would Concho permit another well in the same area (Midnight Ryder)? This one is at 17000 feet which has to be high dollar. There is more to the story than the rumors.
watch and wait is about all we can do for a while the proctor had 9 or so frack trucks running over the weekend and the w&t ofshore sec 23b dd start its frack in is a 1 1/2 mile hoz it hard to stay in front of the action but All comment of the past few days are good keep your in put rolling for somthing to see about terry county google CY-Jack(LWcc) rrc on field class on wagnor and brown
Craig: where is Proctor 94? I don’t have a geo map, so if you can give me rough location relative to any recognizable town, county road, etc. Thanks.
North of what was Gomez on CR 300. It is located just North of the curve where the road turns to the West. Fracking trucks left on Monday.
Gene; click on this link: http://www.albrechtai.com/divestments/Smith%20Energy%20Brochure.pdf
Then look on page 5 … then look for the drilling unit identified as Empresa
Elbert, I think there isn’t much of a question what’s about to happen on your end.
In my opinion, Proctor 94 is in the perfect spot of Terry County for the wolfcamp shale, plus since they’re drilling it out as a horizontal, you’re gonna have to buy yourself a nine digit calculator just to do the math. … No, but seriously, I think this will be the well that produces between 600 bbls and 1500 bbls per day.
Hopefully some of us can get lucky enough to have our minerals drilled out before Obama and the EPA outlaws fracking because once that happens, it will totally end the exploration of all shale formations.
I have a lot of neighbors who work for Baker Hughes and I can tell you that they are running really scared about now.
Gene the RR # is 42-445-32338 It is 7.6 miles NW of Brownsville.
lets get it right sec 94 block4x 4 1/2 mile north of Gomez texas about 7 miles west of brownfield texas on us 380 north on texas farm road 303 on the curve where 303 turns west north side of curve. yesterday they was 12 pump units working ee proctor 1h. on the 94 I call it
Thanks, Craig. We have some minerals about 5 miles north of the Proctor.
Gene, I guess you already leased your minerals and hoping they will drill ??
Our lease is almost two years old now and set to expire in December. Our minerals are around six to seven miles south of Proctor and about one or two to the east.
I’ve been doing a whole lot of research on the drilling activity during the past couple of weeks and studied every production report for each well during the previous 12 months for Terry County. It looks to me as though the production rates increase from the southwest portions of Terry County, when you move up towards the Northeast. However, only to a certain extent, when you get too close to Lubbock County (with two or three miles, the production rates begin to decline again.
This is my reasoning, when I suggest that Proctor 94 is probably on pace to be the first heavy hitter in Terry County, then couple that with a horizontal drill out and I think I’d like to be the owner of those minerals right about now.
**
**On the Concho 3d Q earning call yesterday there was some talk about Terry County prospects and the results of Red Headed Stranger. In a nutshell, CEO Leach called the first well results “inconclusive” and considers the area still “exploratory.” They are still working on analyzing the well data and plan to drill more in 2013. One new well is already permitted. This suggests that they think there is enough oil there to be economical if they can figure out how to frack it better. But that’s just a guess. As many have said, there’s more waiting in store. I’ve copied a couple of the key quotes from the call below.
Are there any specifics can provide on Terry or Howard County wells?
****Timothy A. Leach-
Terry or Howard, no. I would you say that Northern Midland Basin activity that we have, we drilled our first well and it was inconclusive and what we saw – we’re preparing to drill our second well and I still think of that whole thing is an exploration play up there.
***
Just a quick follow-up to the question that was just asked, up in the Northern Midland Basin, Terry County. Do you know how many other horizontal wells are being drilled up there right now? And also, I mean, is there anything you learned from that Red Headed Stranger well that you’ll use in drilling the – I think it’s the Midnight Rider well that you’re currently drilling?
****Matthew G. Hyde- Senior Vice President of Exploration and Land
Yes, this is Matt, I’ll take that question. There are a couple of other competitors up there that have moved into the horizontal realm. They’re privates that are doing the drilling in addition to Concho at this point in time. I believe there are 4 incremental horizontals to our Red Headed Stranger. As to using the Red Headed Stranger data, absolutely, we’re continuing to evaluate both the rock data and then our completion of stimulation results up there as we think about our next well. The Midnight Rider is a permit. We are evaluating data from the Red Headed Stranger and are continuing to evaluate locations for a go forward drilling.
Interesting. I think what we are seeing is that the Wolfcamp in the northern permian basin is much different than the southern. Hope they don’t give up trying. Does anyone know the results of the Smith Energy offering? Did they have a buyer?
Well, the geologists seem pretty sure there’s a lot of oil down there, so if these folks give up on it, someone else will keep showing up every few years and throwing some more money at it until somebody figures it out. Then maybe thirty years from now my kids can retire at 50 and still afford to pay the bills for their addled old mom and dad in the nursing home. The old saw about never selling your minerals is probably truer today than it ever was.
Thanks for posting the comments by Timothy Leach, although I would disagree with Steve Brock’s conclusion that “This suggests that they think there is enough oil there to be economical…” If there were enough oil there to be economical, you would have seen an oil well where the Red Headed Strangler had drilled by now, not a deserted hole waiting to be plugged.
my question is why are some still trying and leasing minerals in these same areas while I was in brownfield last month there was leases being signed north of the proctor I havent had time to talk to the ones I need to but I will tell everyone the day the rig on the proctor went down there was offer to purchase one section very close to sec 94 and I know who wanted to buy it and who leased the stuff to the north I think that it is a play to buy more minerals but please dont forget it is a high dollar game look at your own cards
RHH, well yeah …
But the extra, 5,000 to 7,000 ft into the shale, horizontally, I sure doesn’t come to cheap.