I am part owner of a well in section 2, williams county. petro-hunt is the oil company. They just released flow rates of 3,622 for june, 4,278 for july and 5,132 for august. petro-hunt says these are total barrels for each of those months. Those numbers seem to be very low compared to published flow rates for other wells that are 1,000 to 2,000 barrels per day. Am I missing something or am I part owner of a very poor well?
Mr. Hamann, not all wells are created equal. The operators have varying opinions of how a well should be completed. It can be a fine balancing act for the operator of how many frack stages they perform to stimulate a well, more frack stages being more expensive and fewer frack stages being less expensive. More frack stages can stimulate a well to produce more oil at the cost of millions of dollars more but there is a chance the well will produce little more oil. The operator is balancing how fast the well returns the money invested and a cheaper well may pay itself off faster and possibly be as profitable over the life of the well of possibly 30 years. I have one well that the operator proposed to complete with 6 frack stages and the operator wound up omitting 4 of those so it's actually a 2 stage frack, I'm not happy with the production, right next to [in the same spacing] 24 stage frack well where I am very happy with the production. The 24 stage well was drilled first, the spacing above mine has two 24 stage wells drilled by the same operator and both of them are great wells and it makes me go Hmm. It's not like they didn't know what result they were likely to get from more frack stages. I did some research and found that this same operator has done the same in several other spacings, so it's not just mine, or an accident. One operator could use ten stage fracks in an area as a rule and another may use 30 stages or more. As a mineral owner you have no control over how the operator drills and completes the well. If you had the majority of the acres in a spacing you could probably pick the operator by who you decided to lease to, but that would be the last time you exerted any influence. Sometimes the operator goes all out and you get a poor well by accident but sometimes the well is less than it could be by design, and there isn't a thing you can do about it.
Mr. Kennedy has great points and knows your area very well.
It could be because of geology or some other operational reason. Everyone talks about "resource plays" having consistent results, but if you take a deep dive into the numbers that is almost never the case. All mineral acres were not created equal.
One bright note in your situation is that your checks should be more consistent. Decline rates are usually much steeper for wells completed with more frack stages.
Mr. Dukes is correct that geology even 1/2 mile between wells can make a difference but if you surrounded by wells drilled by a different operator and they all outperform your well, I'd start to wonder and I have access to the wellfiles and can see how the wells differ. As for decline rates being more steep with more frack stages, I'd rather my well become a has been than a never was.
This quote should be saved: "I'd rather my well become a has been than a never was."
Gene,
The responders all make good points for possible explanations but follow up on the geology angle. Your well is performing much like a PetroHunt well that could be nearby. It was completed by PerroHunt from the Three Forks formation below the Bakken. You have a pretty good well for that formation and you can bet that Petro knows exactly what they encountered in the Bakken. Hang on!! I don't think your will will be a "has been" well for decades.
If it a Three Forks well, they may be trying to get less water back by doing fewer frack stages. That formation produces up to 40% water. Get rid of the water is expense, so maybe this is what the driller is doing.
Fewer frack stages to reduce the water seems counter intuitive as it would probably involve less oil also. I think they can choke the well back to the point that they slow the flow enough that the majority of what is produced is oil no matter how many frack stages they use. As for 40% water, that does seem heavy but I have seen worse. I have seen one well in particular that has produced 10 barrels of water for every barrel of oil for more than 20 years, more than 1 million barrels of water. I think the water is only a problem when you have no injection well to pump it down. I have a cousin in SWD here in Texas and she tells me due to competition that the disposal fee has dropped to 50 cents a barrel. I realize that disposal cost per barrel may be higher in North Dakota but I doubt it would be more than a couple dollars per barrel. I realize that transportation costs of the water may be a couple of dollars per barrel but I think at todays prices transport costs would not place too great a cramp on production.
THANKS TO EVERYONE FOR YOUR INPUTS. SHOULD RECEIVE FIRST ROYALTY CHECK THIS WEEK. HAVE NO IDEA WHAT TO EXPECT. WHATEVER IT IS, IT'S MORE THAN I'M GETTING RIGHT NOW. GENE.