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Author Topic: Shape of a unit  (Read 16540 times)

Mich-Pioneer

  • Guest
Re: Shape of a unit
« Reply #15 on: June 02, 2010, 04:49:12 AM »
Good question, Garvin, sorry I was not clear.

If laterals could be 1/2 mile apart in the collingwood without interfering with each other, then I would like to see a spacing plan calling for units of 1/2 mile wide by 2 mile long units..... that would still come out to 640 acres, but standing up or laying down.   In other words, if you took Section 1 and Section 12, you could have two standup units, and two nice l-o-n-g laterals efficiently draining them.  After all, every inch of dirt would be within 0.25 miles of the lateral drain except a whee bit would be a few feet further away in the corners of the units due to setback.

If instead you put a diagonal lateral drain across a square 640, some of the dirt will be 0.71 miles from the drain.  I have a hard time thinking that dirt really "deserves" to share in royalties because it gave up its hydrocarbons.  Is there some reason to think that these laterals can drain hydrocarbons efficiently from over half a mile away?   Oh sure, maybe you get lucky with a pocket of porosity or natural fault.  But if its all just impermeable stuff needing stimulation.... a square unit is bad for landowners, and reduces the bang for investment buck for the operator too, since they are forced to use shorter laterals than they might otherwise.

The downside with my idea, of course, is that if units are formed haphazardly, then one will start over here laying down, and one will start over there standing up, and as the map gets filled in we'll end up skipping entire sections as one-mile donut holes.  I'm not sure what the solution there is.

Which is why I mentioned voluntary pooling to accomplish the .5x2 mile unit size.  If Paxton owns all the leases in both sections, and if those leases have the boilerplate pooling clauses, then there's no problem getting unanimous consent.  If Paxton has only some and the other acres are unleased, it should be no problem getting Paxton and landowners to agree.  After all, if they can be that close, there's more bang for buck having a longer lateral so that should make the company happy.  And the area is "fully developed" thus avoiding royalty dilution which should make the landowners happy.   Only fly I see in ointment is:  (A) maybe the geology of these things is more complicated than my measly comprehension suggests and (B) maybe there are topographic or landowner desires that makes two well pads problematic.

Thoughts anyone?

MichGuy
« Last Edit: June 02, 2010, 05:08:27 AM by MichGuy »

g592314

  • Posts: 2660
Re: Shape of a unit
« Reply #16 on: June 02, 2010, 05:18:55 AM »
It seems like the spacing would have an interrelationship with the direction of the natural fractures in the rock/shale.  What is the prevailing direction of the nat. frac's in Michigan?

Wax

  • Posts: 6043
Re: Shape of a unit
« Reply #17 on: June 02, 2010, 05:51:25 AM »
I'd hate to disagree with an "expert"  ::), but I've plotted thirteen units in Bradford. The average looks to be 7700' x 4000'.

The trend would probably be toward longer units, but I haven't seen any declarations like that yet.
ruby
Any idea how many wells are in a unit this size? Are all the wells in the unit being drilled? Appronx  royalties per acre @ 12.5 = ?
Wax

heisoktoday

  • Guest
Re: Shape of a unit
« Reply #18 on: June 02, 2010, 06:02:44 AM »
MichGuy,

Please point me in the direction where you are getting your "drainage" numbers to justify .25 miles between laterals? Is there enough data on Michigan wells to back this up  ?

Good question, Garvin, sorry I was not clear.

If laterals could be 1/2 mile apart in the collingwood without interfering with each other, then I would like to see a spacing plan calling for units of 1/2 mile wide by 2 mile long units..... that would still come out to 640 acres, but standing up or laying down.   In other words, if you took Section 1 and Section 12, you could have two standup units, and two nice l-o-n-g laterals efficiently draining them.  After all, every inch of dirt would be within 0.25 miles of the lateral drain except a whee bit would be a few feet further away in the corners of the units due to setback.

If instead you put a diagonal lateral drain across a square 640, some of the dirt will be 0.71 miles from the drain.  I have a hard time thinking that dirt really "deserves" to share in royalties because it gave up its hydrocarbons.  Is there some reason to think that these laterals can drain hydrocarbons efficiently from over half a mile away?   Oh sure, maybe you get lucky with a pocket of porosity or natural fault.  But if its all just impermeable stuff needing stimulation.... a square unit is bad for landowners, and reduces the bang for investment buck for the operator too, since they are forced to use shorter laterals than they might otherwise.

The downside with my idea, of course, is that if units are formed haphazardly, then one will start over here laying down, and one will start over there standing up, and as the map gets filled in we'll end up skipping entire sections as one-mile donut holes.  I'm not sure what the solution there is.

Which is why I mentioned voluntary pooling to accomplish the .5x2 mile unit size.  If Paxton owns all the leases in both sections, and if those leases have the boilerplate pooling clauses, then there's no problem getting unanimous consent.  If Paxton has only some and the other acres are unleased, it should be no problem getting Paxton and landowners to agree.  After all, if they can be that close, there's more bang for buck having a longer lateral so that should make the company happy.  And the area is "fully developed" thus avoiding royalty dilution which should make the landowners happy.   Only fly I see in ointment is:  (A) maybe the geology of these things is more complicated than my measly comprehension suggests and (B) maybe there are topographic or landowner desires that makes two well pads problematic.

Thoughts anyone?

MichGuy

Mich-Pioneer

  • Guest
Re: Shape of a unit
« Reply #19 on: June 02, 2010, 06:50:13 AM »
Please point me in the direction where you are getting your "drainage" numbers to justify .25 miles between laterals?

Heisko, others on this site have commented on much closer spacing in other shales in other places.  http://www.pagaslease.com/natural_gas_forum/index.php?topic=6237.0   So far Michigan's play consists of just a single lateral drain in the collingwood shale, so there are no play-specific numbers.... yet.   

I'm just saying this layman, who hopefully has an ordinary amount of common sense, does not believe that the frack network will radiate out in full force 0.5 miles from the bore.  Yeah, I'll admit it's possible.  But I hypothesize "no".  In that case, all acres in the corners of the section furthest from the bore will contribute no HCs to the production, yet those same acres will take a bite out of royalties owed to those that do.

Yes, maybe years later they can come back to do infill wells.  But what a mess, running infills diagonally through the common corner of 4 sections!   

MichGuy

g592314

  • Posts: 2660
Re: Shape of a unit
« Reply #20 on: June 02, 2010, 07:00:37 AM »
Wax, all the units I'm aware of in SE Bradford have 2 being drilled initially.  Some have permits for more, and I've heard of some that are only getting one initially

heisoktoday

  • Guest
Re: Shape of a unit
« Reply #21 on: June 02, 2010, 07:47:07 AM »
Thanks MichGuy,

That makes total sense.

 I would prefer what Range appears to be doing. They are bringing in the hardware to drill many horizontals at one time. I prefer the disruption of drilling 6 at once. From a corporate level, in addition to current cash flow, they could be showing investors what the CEO has said that this is what our acreage is worth and thus our company . He as stated essentially that he could care less what other companies are willing to sell for. Also, I would not want a new disruption every few years to try to optimize returns by holding many acres with few wells. Add to that the uncertainty that they would make it back in my lifetime.

Sorry, I went slightly off track, but I believe it is directly related to unitization. (I am not signed with Range, and have absolutely no interest in their stock.)

Humphry444

  • Guest
Re: Shape of a unit
« Reply #22 on: June 07, 2010, 06:21:47 PM »
no one is pesdonding    WRITE your legislators

ghrit

  • Posts: 3161
  • Member since October 05, 2008
Re: Shape of a unit
« Reply #23 on: June 07, 2010, 07:00:20 PM »
pesdonding
Spell check didn't work, neither did Wiki.  I'm at a loss.   ::)   :-\
There are two kinds of ships.  Submarines and targets.
www.survivalmonkey.com

g592314

  • Posts: 2660
Re: Shape of a unit
« Reply #24 on: June 07, 2010, 07:09:14 PM »
ghrit, me too - can't figure out that one

heisk - I would not want all my wells drilled at once for fear of dumping all my gas at a low point in the gas market. Having it spread out over time is kind of like dollar-cost averaging.  You spread it over the years and reduce your risk.

donegal

  • Premium Member
  • Posts: 4982
Re: Shape of a unit
« Reply #25 on: June 09, 2010, 02:07:32 PM »
Funny how Humpity gets a "responding" audience.....Hump....do you misspell on purpose....cause you got more responses than the poster before you did....

By the way, why not help us all here with some points that we might share with our legislators??

Thanks,
Donegal
We finally scuttled the Exxon Valdez (for the second time in her life), and turned in at the boatyard the ol'  gray Bismarck before she sank too..  Now I'm Captain of the most beautifulest boat ever, the "HMS HOOD", a 2012 stealth black AWD V-8 Chrysler 300.

heisoktoday

  • Guest
Re: Shape of a unit
« Reply #26 on: June 09, 2010, 02:34:07 PM »
Could it be that Hump is using that strategy to simply bury previous posts, and redirect some to counteract him? How many times has he sucked us in? MichGuy, I am adding your post as an example of a rational post which might have been glossed over.

Funny how Humpity gets a "responding" audience.....Hump....do you misspell on purpose....cause you got more responses than the poster before you did....

By the way, why not help us all here with some points that we might share with our legislators??

Thanks,
Donegal

Please point me in the direction where you are getting your "drainage" numbers to justify .25 miles between laterals?

Heisko, others on this site have commented on much closer spacing in other shales in other places.  http://www.pagaslease.com/natural_gas_forum/index.php?topic=6237.0   So far Michigan's play consists of just a single lateral drain in the collingwood shale, so there are no play-specific numbers.... yet.    

I'm just saying this layman, who hopefully has an ordinary amount of common sense, does not believe that the frack network will radiate out in full force 0.5 miles from the bore.  Yeah, I'll admit it's possible.  But I hypothesize "no".  In that case, all acres in the corners of the section furthest from the bore will contribute no HCs to the production, yet those same acres will take a bite out of royalties owed to those that do.

Yes, maybe years later they can come back to do infill wells.  But what a mess, running infills diagonally through the common corner of 4 sections!  

MichGuy

« Last Edit: June 09, 2010, 02:53:58 PM by heisoktoday »

 


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