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The drilling productivity report

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Rockdale

  • 6128
The drilling productivity report
« on: January 17, 2018, 02:19:27 PM »
As is usual, the Dept. of Energy released its latest drilling productivity report for the shale gas production regions around the middle of the month, which appears now on the EIA webpage.  Once again the Appalachia region (now lumping together the Marcellus and Utica rather than separating them as was the case in the past) is well ahead of any other with next month's expected production per well per day going from 14.73 million cubic feet to 14.90, with the average for all US shale regions rising from 3.57 million per well to 3.66 million.  For all of the years that I have watched this crucial bit of data I don't think that the regional or national averages have ever gone down.  Which would seem to indicate that the geology of the areas being drilled into is improving and/or that the technology of extraction is getting better all the time.

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Wax

  • 6311
Re: The drilling productivity report
« Reply #1 on: January 17, 2018, 04:46:38 PM »
A good read, to understanding what Rock posted.

https://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf

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Rockdale

  • 6128
Re: The drilling productivity report
« Reply #2 on: January 17, 2018, 05:11:40 PM »
A good read, to understanding what Rock posted.

https://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf
>>>> Wax, thanks for posting the material which explains in great detail the current situation in the shale gas industry.  It seems almost comical now in retrospect, but for many years after the first good wells were brought in to tap shale gas, a very large portion of supposed expert opinion thought the whole matter was a flash in the pan and a type of Ponzi scheme that trapped the unwary investor.  Foremost among those shale energy deniers was Mr. Arthur Berman, a man with backgrounds in both petroleum engineering and finance.  He was so highly regarded that a very critical report he wrote about the shale energy industry caused a huge sell off in energy stocks wiping out, temporarily, billions of dollars of stock value which took a while to recover from.  He had sent in an opinion piece to the New York Times in the summer of 2011 on that theme of shale energy as a Ponzi scheme which I responded to, and I found that exchange almost immediately with an internet search.  Everybody is entitled to their opinion, but I don't believe energy stocks will fall anymore based on what Mr. Berman believes.  If anything shale energy grows with each day in production and I think the biggest breakthroughs in the years ahead will be as the drilling companies figure out ways to constantly increase the percentage of the gas and oil which exists in the shales which can be actually extracted.  At present more has to be left behind than can be tapped.  And it is noteworthy how while the Energy Dept. maps the other shale energy deposits it no longer considers the Barnett worthy of attention.  A decade ago the Barnett was considered the gold standard with all the others, including the Marcellus, to be second raters at best.

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aubrey

  • 14359
  • NEWBIE
Re: The drilling productivity report
« Reply #3 on: January 17, 2018, 05:32:31 PM »
It seems almost comical now in retrospect, but for many years after the first good wells were brought in to tap shale gas, a very large portion of supposed expert opinion thought the whole matter was a flash in the pan and a type of Ponzi scheme that trapped the unwary investor.
 

you can still find supposed experts saying that "frac'ing is unprofitable.

I occasionally watch max keiser on rt, mostly for a laugh, and he spouts that opinion just about every week. I often wonder if Russia isn't behind that dissemination of misinformation.

when I first heard him make that claim, i got out my royalty statements and confirmed that the wells that I receive royalties from all earned revenue in excess of the cost of the wells in under 6 months. some wells pay out in as little as 3.

these days max is obsessed with bitcoin. he is now claiming that bitcoin will go to $100,000.  slaplaugh

wj
CHANGE IT BACK!

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Wax

  • 6311
Re: The drilling productivity report
« Reply #4 on: January 17, 2018, 06:12:53 PM »
It seems almost comical now in retrospect, but for many years after the first good wells were brought in to tap shale gas, a very large portion of supposed expert opinion thought the whole matter was a flash in the pan and a type of Ponzi scheme that trapped the unwary investor.
 

you can still find supposed experts saying that "frac'ing is unprofitable.

I occasionally watch max keiser on rt, mostly for a laugh, and he spouts that opinion just about every week. I often wonder if Russia isn't behind that dissemination of misinformation.

when I first heard him make that claim, i got out my royalty statements and confirmed that the wells that I receive royalties from all earned revenue in excess of the cost of the wells in under 6 months. some wells pay out in as little as 3.

these days max is obsessed with bitcoin. he is now claiming that bitcoin will go to $100,000.  slaplaugh

wj
depends how you define profit ?

Re: The drilling productivity report
« Reply #5 on: January 17, 2018, 07:35:15 PM »
depends how you define profit ?
I would guess that it would be the same way that you define the word "is"?

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Wax

  • 6311
Re: The drilling productivity report
« Reply #6 on: January 17, 2018, 07:56:32 PM »
depends how you define profit ?
I would guess that it would be the same way that you define the word "is"?
"is not" may be a better term for CHK -$3.00 for every share book value.
Very profitable for CEO's and board members.
very profitable for some royalty owners.
The entire stock market is a potential Ponzi scheme. Just needs to be set in motion, by a circumstance. But I play it anyway.

Re: The drilling productivity report
« Reply #7 on: January 17, 2018, 08:24:16 PM »
depends how you define profit ?
I would guess that it would be the same way that you define the word "is"?
"is not" may be a better term for CHK -$3.00 for every share book value.
Very profitable for CEO's and board members.
very profitable for some royalty owners.
The entire stock market is a potential Ponzi scheme. Just needs to be set in motion, by a circumstance. But I play it anyway.
Just don't forget your meds before you go nighty-night...

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aubrey

  • 14359
  • NEWBIE
Re: The drilling productivity report
« Reply #8 on: January 17, 2018, 10:05:29 PM »
very profitable for some royalty owners.

you betcha!

I added up 5 years of royalties on a chk leased property recently, and my take was around 8 grand an acre on a 1/8 royalty after deductions. there's only 1 well so far, so it looks like my estimate of $100,000/acre is gonna be a little low after the unit is fully developed.

very profitable indeed!

wj
CHANGE IT BACK!

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Wax

  • 6311
Re: The drilling productivity report
« Reply #9 on: January 17, 2018, 10:23:53 PM »
very profitable for some royalty owners.

you betcha!

I added up 5 years of royalties on a chk leased property recently, and my take was around 8 grand an acre on a 1/8 royalty after deductions. there's only 1 well so far, so it looks like my estimate of $100,000/acre is gonna be a little low after the unit is fully developed.

very profitable indeed!

wj
Get the new roof tarp yet ? :) I think I'll fly my drone in the area, and do some recon. Let me not forget the solar panels. 8)

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riverrat

  • 1651
Re: The drilling productivity report
« Reply #10 on: January 17, 2018, 10:56:11 PM »
now come on aubrey ma   cal says you have no deduct leases & he knows all

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macal

  • 9419
Re: The drilling productivity report
« Reply #11 on: January 18, 2018, 06:43:19 AM »


  Rock, thr article says that the average well in the Marcellus Utica play puts out just shy of 15 million cubic feet per day.
  The brand new wells. The other statistic that is really the bottom line is EUR per 1000 feet of lateral. We are seeing lateral lengths over 10000 feet. A little math.

   10 3bcf equals 30 bcf. Even at $2 gas that is 60 million dollars of revenue. If that well costs 10 million there is 50 million of profit. Even with $1.00 for post production it still leaves 20 million These are conservative figures. The upside could be much higjer.
« Last Edit: January 18, 2018, 07:12:00 AM by macal »

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ghrit

  • 3340
  • Member since October 05, 2008
Re: The drilling productivity report
« Reply #12 on: January 18, 2018, 08:07:56 AM »


If that well costs 10 million there is 50 million of profit.
Are you ever going to figure out the difference between revenue and profit?
There are two kinds of ships.  Submarines and targets.
www.survivalmonkey.com

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macal

  • 9419
Re: The drilling productivity report
« Reply #13 on: January 18, 2018, 08:50:29 AM »



   60 million dollars of revenue minus 10 million dollars of cost equal 50 million dollars of profit.

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aubrey

  • 14359
  • NEWBIE
Re: The drilling productivity report
« Reply #14 on: January 18, 2018, 09:01:05 AM »
there ya go g! it's just that simple.

which is why libs have trouble figuring out why they destroy businesses, economies and peoples' lives throughout the world.

 slaplaugh
   wj
CHANGE IT BACK!