Horizontal well profit model?

Any input on “our” well’s results & likelihood of additional stacked & staggered wellbores in this low-$50s market? Do you think the operator has recouped sunk costs?

This is the first well drilled in our section since WW2 or earlier … Reeves County, Wolfcamp 15,000’ total, 10,175’ long lateral horizontal.

Well produced 216,000 bbl first five months, peaked month-2 at 61,000 bbl. Operator grossed $12 million before paying royalties. Month-5 volume declined to 28,932 bbl (933 daily) in 640 acre pooled unit.

Can you provide the API# for the well?

API 42-389-37581, Sievers 2-35 South Unit, well 6H, permit number 844831. RRC website does not show production data, although production and royalties commenced in April.

That is a very, very good well. Talked to someone at Cimarex the other day who told me that the very best wells are paying out in a year to year & a half (after drilling costs and paying expenses, royalty owners and such). Problem is that not all wells are as good as that one.

Looks like a lot of space for more wells in the south unit there, but they might not drill another for years. I don’t see an active permit in either south unit or north unit.

Also, don’t know how many horizontals you’ve been a part of, but watch out for that first year decline - 70% drop in production from the best month to the last month in the year. Second year will see another drop and by the end of that you’re at something like 10% to 15% of the first months production.

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The Sievers 2-35 South Unit is located in Sections 30 & 35, Block 2, Reeves Cty, TX. Abstracts 1511 & 377.

The Bone Spring wells in that immediate area have been awful. Lots of water, low amount of oil. All of the good wells around there are Wolfcamp A or B. Wolfcamp C wells have been decent, but not as good as A or B.

Wolfcamp starts around 10,500 ft in immediate area. Sievers South 6H appears to be a Wolfcamp A well (depth 10,750 ft). Sievers North 5H appears to be Wolfcamp B (depth 11,150 ft). The shorter 1H appears to be Wolfcamp B also.

Thx for excellent perspective. I bet Cimarex will take their time with sequential wells, they’ll avoid Encana’s mistake of drilling too fast too tightly spaced, plus oil price in low $50s and global GDP slowing. I think Cimarex holds some premium acreage in Culberson & Reeves, including acquisition of Resolute Energy, they can slow down & focus on premium acres.

Cimarex does have some premium acreage. It seems that the talk generally in the industry is focusing on efficiency and not necessarily punching holes in the ground. Operators appear to be largely focusing on their own acreage and meeting obligations vs infill. Across the board we are seeing a decrease in lease bonus and prices to purchase minerals. That will not likely change in the foreseeable future. The market is pretty pessimistic right now.

How can you tell vertical depth of these two wells? You say 10,750’ for Sievers 2-35 South 6H and 11,150’ for North 5H? How can you know 6H goes into Wolfcamp A and its sister well 5H pumps Wolfcamp B?

How can you know from public info how vertically deep the kickoff point is, where the wellbore turns horizontal?

RRC website and W1 and related documents simply disclose 15,000’ for “total depth”. The two surveyor plats show lateral lines of 10,175’ and 10,176’ or two miles long.

Roy -

I pulled the depths from Drilling Info. However, you can also find them on the TX RRC website if you pull the completion reports. Vertical depth drilled and depth of the top of the formation are usually listed on the report (form G-1). The surveyor plats from the permits are usually pretty accurate if you want the horizontal lateral length.

From me, Wolfcamp A vs Wolfcamp B is usually a ‘best guess’ type of thing. A geologist who works Reeves would probably be able to tell you for sure. My understanding is that the Wolfcamp benches typically run from 400 to 500 feet thick in the area. This is based on discussions I have had with geologists and some of the better informed landmen.

I hope all this helps.

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Very helpful indeed, made my day! I’ve been waiting/watching for these completion reports for months via RRC CIS/map plus occasional completions queries. RRC is difficult for rookies, the FAQs are useless, wish I could purchase a book “RRC Website for Dummies”.

These two wells producing since April 1, but no production data available on RRC map.

I shall look into DrillingInfo/Enverus, see how much it costs for basic subscription.

Happy to hear that it was helpful. I agree that the RRC site is difficult - even after you get the hang of it.

FYI - Drilling Info / Enverus subscription is pretty pricey. I have an account through work and don’t have to pay for it.