Permits Section 9 Block C-20


#1

For Clint Liles or anyone that could help. Cimarex is close to beginning production with two wells in Section 9 Block C-20. Does anyone have information on whether they have applied for additional permits on this same property? Does the operator need a permit for each well or do their existing permits allow for other wells under them? Not familiar with permitting process.

Also, what is the average volume in the area for horizontal wells? Is the decline curve for them different than the verticals? This is hot area right now and I’m wondering whether there are plans under the existing lease for additional wells.


#2

Hey Jesse,

You can do a W-1(Permit) search on the RRC (Railroad Commission) here: W1 Search

To answer your question, yes an operator must permit each and every well even if there is existing production in a particular section already.

As far as what the cumulative production will be for a well, that is hard to say as it varies greatly from area to area and even section to section. Although you will generally find similar production for nearby wells. I would try looking at some of the publicly traded operators near where your minerals are located and read their investor presentations and you can get an idea of what the EUR (Estimated Ultimate Recovery) is for the wells. With these horizontal wells the decline curve is pretty steep with the vast majority of the ultimate production coming in the first 1-4 years of the wells life (or maybe even sooner).

Hope some of this information helps.

Cam


#4

Thanks Cam. Looks like they have three approved permits and maybe are only doing two to start with. Any idea what the average barrels per day in this area are?


#7

Jesse,
there are some good wells in this area…although only a few have been completed. There are numerous permitted locations in this area…Cimarex seems to be the major operator/producer.
This link is to production data on a well nearby that was drilled by Resolute Natural Resources…to view all production on this well manipulate the begin date to July 2014.
http://webapps2.rrc.texas.gov/EWA/specificLeaseQueryAction.do?tab=init&viewType=prodAndTotalDisp&methodToCall=fromGisViewer&pdqSearchArgs.paramValue=|2=06|3=2017|4=05|5=2018|103=45734|6=O|102=08|8=specificlease|204=district|9=dispdetails|10=0
GIS Map of Reeves County Section 9/Block C20:


CLICK ON MAP TO ENLARGE
Clint Liles
oil_well


#8

Thanks! Is there a theoretical maximum of barrels / month a well can produce if everything is operating at 100% efficiency? For planning purposes what would be an average and stellar production volume for a horizontal well in the Permian? 15 / 30K barrels per month?

Thanks,
Jay


#9

At some point the well will be facility constrained, i.e. the choke can only open up so much, the pipes are only so big, the pump to move fluid off location only sized so large, etc… But this theoretical max will vary well to well, facility to facility and can also be determined by the midstream infrastructure surrounding you.
That being said the maximum can be very high with the right facility design. I have seen few wells produce >80,000 bo/mo. but you have to be careful in looking for those huge month wells because many of the crazy high months called out by analysts are erroneous due to not understanding the way production is allocated at the lease level in TX.

To your other question about average/stellar production, there are a number of variables in play (lateral length being a big one) But your asking about a prolific area of the basin and I would expect the average well with a modern completion will easily do 15-25K bblo/mo initially depending on flowback strategy. And a stellar well or aggressive flow-back strategy in the area could be reasonably expected to achieve 30-40K bblo/mo initially. Then you can can expect a fairly steep decline with ~20% of the lifetime volumes coming in the first year of the wells life.