The first shipload of American oil has left Texas, bound for Europe, hubs was told today! The stock market closed down, but maybe they had other issues. It will be interesting to see if the price goes up now. Are we going to also sell natural gas overseas?
http://www.wsj.com/articles/u-s-to-export-crude-oil-cargo-in-early-january-1450894791
We already sell gas internationally from Alaska-have for decades. However, it is tankered as LNG. The new Chenier port near Sabine Pass will be online very soon. Several more on in the works.
Demand is going to have to go up before the price changes much. Too much supply on the market right now. Brent and WTI are almost identical in price. However, the blends are a little different. Time will tell.
Scoutā¦ I really know nothing about it but I am thinking that they will choke all the wells way back in order to save that oil until the price goes up. What is the name of your well? Is that a Bolles?
Weāre also exporting a lot of gas to Mexico and itās expected to ramp up significantly over the coming years. https://www.eia.gov/dnav/ng/hist/n9132mx2m.htm
Clarence 1H-23
I donāt know enough about the effects of choking down the wells to know if they are restraining production for the future or if it just the nature of the beast. The test report shows a choke size of 20.
Hi gang, I havenāt been on the site for a year :(. I still have 6 mineral acres 21-2S-4W in the SCOOP. I havenāt leased them because I was waiting for a poolā¦ any advice for this rookie?
Hi Rick, that was really my point. There is a disconnect between what is reported in the press and in investor presentations and what is really coming out of the ground. We see the big numbers reported but the production doesnāt back it up, at least in this case. If the Springer wells cost $7.5MM as has been reported, it will take a lot of production to pay them back even at $60 oil much less $36.
Thanks for the additional information, M Barnes! I had no idea about gas. Demand in the NE has been way down this winter, with 70 degree weather (in NY) during Christmas week, no less! We are shivering in Florida this week, though, with night time temps in the 50s. I doubt weāll offset it much, but weāre trying, LOL!
Scout,
I think you are giving the āInitial test dataā contained in the completion report too much credit as an indication of future production. I believe its primary purpose is to determine the classification of the well as a gas or oil well (above or below a 16,000:1 ratio). It is too early within the well completion to really determine anything. Yes, a 3000 BOPD would be expected to perform better 6 months out than a 50 BOPD well. But, (from public data) the 2nd and 3rd full months of production reports are much better indicators. They are still returning frac water for several weeks which can really mess with production numbers. You need to know that production was continuous through those months even then. The critical data is held closer and usually only shared to the working interest owners.
Based only on those production reports and without further stimulation, expect that well to be at 50 or less BOPD within 24-36 months.
I see as far as oil prices we havenāt āstopped the bleedingā as it is down to $34 and some change at the moment. Ugh!
I have been a long time reader but this is my first time to comment. I would like to report on the Springer well we have a small interest in and see if others have seen similar results. The one I am referring to is 23 2N 4W.
The initial production report was 1,303 BPD of oil - sounds great.
Actual sales
The well began production in May and total sales were 2,864 barrels. Gas and NGLās have been negligible. I donāt know how many days of production so donāt really know the actual BPD.
June 393.5/BPD
July 304/BPD
Aug 284/BPD
Sept 200/BPD
Oct 191/BPD
While it beats getting poked in the eye, the initial results do not reflect the real production at least for this well. The other wells in the section hitting the Woodford are much more consistent with their initial report.
I donāt know if it is the nature of the Springer wells but if other results are similar you can see why there is not a great rush to drill more.
No worries, I understand the philosophy of choking a well to maintain reservoir pressure. In this day and age when the producing companies are scrambling for money, I would imagine they are producing as many barrels as they can without ruining the well.
Interesting, I did some quick calculations on 6 Woodford wells, same Section, same operator, roughly same length for 6 full months. I found the first full month was roughly 80% of the test report for oil with a decline rate of around 10% per month. That seems like a reasonable representation of a decline curve against their initial test reports.
The Springer numbers, on the other hand, are pretty miserable.
Reported 1303 BPD, first full month 394 BPD or 30% of test with a decline rate of about 20% per month over 5 full months.
Well, Scout, my husband told me when all these wells started around us in the SCOOP that one of the reasons they put a choke on the wells is for the good of the wellā¦ so they donāt pull so hard that they pull the salt water up into the well and ruin it. But Iām sure if they wanted to save the oil for better pricing days, they could choke it down for that reason too. I mean, itās a good way to store it (in the ground), it seems I heard someone say. There are several on here like M Barnes, Huey, and several others that are either schooled in the oil field or have working interest and Iām sure can tell you more about chokes and their pros and cons. My consultant has turned in for the night! lol
As we traveled down Highway 29 yesterday we saw a few things going on. To the north about 2 or 3 miles from Section 18 2N4W (I believe) were a couple of rigs. Iām guessing they were a couple of the Sympson wells being drilled on 6 2N4W. The rig on the west was full of pipe so Iām guessing they have gotten pretty deep on that one. Also, there was a rig off in the distance a section or two further west (I think it might have been in 2N, 5W). The signs along the road were all three H&P rigs as I remember it. Back east they were doing some dirt work on the east side of the Poteet #1 which looked like them covering up the big pit thatās been there for so long. We really couldnāt see exactly what they were doing because we were so far down under the location while we were on the highway. Any ideas, anyone? As we traveled on east to Elmore City there was a rig off to our north but I donāt have any idea which section it was in or whether it was in Stephens County or Garvin. Iām guessing Garvin. Also, when we came back up Highway 19 coming back to Lindsay there was a rig west off of Highway 19 a couple of miles it looked like. I believe this was in Garvin also. Sorry for the vagueness but we were on a mission that didnāt include time for the diggings.
I have plenty of issues with the investor reports. One is reporting in BOE/D or Barrels of Oil per day equivalent. This is a unit of measure for energy but it is being used for financial purposes. It really made those reports look good when oil was $100 a barrel.
As far as test data, I have little doubt that the well flowed those numbers at the time of the test, but also know that they are not an accurate representation.
I responded to a similar inquiry 1-2 years ago with some real data from a random sample of wells. Iāll see if I can find it.
Scout, here was my response to an inquiry from July 2014.
On the test data.
Donāt be surprised when the test date is not that relevant to production numbers. The method of stimulation will greatly change the way the well develops. If the well is hydraulically fractured, water from the process will be flowing back for weeks. This will greatly impact the numbers.
Iām watching the daily reports on one well right now and it makes it even more apparent how misleading the test reports are. Not intentional, they are required to test and submit it to the OCC. As far as I know, one of the primary reasons for testing is an OCC requirement to classify the well as an oil or gas well. This is done by the ratio of gas vs oil.
Looking at some production numbers I have been compiling, here are some samples (oil only, first month discarded):
Test (oil numbers), months of production reported, overall sales average, average sales first 5 months
85, 9, 185, 263 365, 7, 388, 452 39, 7, 45, 53 268, 4, 130 125, 3, 35 69, 17, 143, 175 392, 6, 41, 35 81, 19, 22, 29 248, 10, 54, 95 69, 9, 36, 47 1059, 6, 514, 524 528, 15, 376, 523
I find Cramer on Mad Money is right a large portion of the time. Heās saying that oil will reach $70-$75 this year. Hope he is right this time!!!
http://seekingalpha.com/article/3795406-oil-will-hit-70minus-75-this-year-cramers-mad-money-1-6-16
Hutch, you would know before anyone I suppose, but there is a location being cleared on the Southeast corner of Section 17 Township 2N-4W at the 18 mile road and Hwy 29. No telling what the purpose is but you may know.
Richardā¦ I believe that is the same place we saw that we thought they were covering up that pit just east of the first Poteet. That was a huge pit of water I called Hutchās lake at one time. We couldnāt figure that out either.