ADI - Adelphi Energy

[Hatchy]

As you can see that is a 42% decline in condensate production (30% decline in gas production) in the first 60 days, and this well is touted as one of the best. This play is definetely going to be economic, but lets just recognize that it isn't going generate some totally insane rate of return.

Drees being touted as one of the best? pffft. They'll tout anything won't they!

Is there a play that does deliver an insane rate of return?

I'm happy with it being economic and delivering a sustainable rate of return.

 

[condog]

choppy when i talk about declines im not comparing them to IP's. Im comparing them to 30 or 60 day averages. then the flow rates at 12 months. This is at or below 30% for most now using the nezer horizntal fracs with lenty of stages imo. I dont have time to go digging data.

Of course Ip's will decline, its like popping a baloon.

 

[choppy]

choppy when i talk about declines im not comparing them to IP's. Im comparing them to 30 or 60 day averages. then the flow rates at 12 months. This is at or below 30% for most now using the nezer horizntal fracs with lenty of stages imo. I dont have time to go digging data.

Of course Ip's will decline, its like popping a baloon.

The rates that were quoted for some of the hillcorp wells were ip's not 30 or 60 day average rate. By the way, you don't calculate decline curves using averages. First year decline rate is equal to 100 minus the rate at day 365 divided by the rate at day 1. Another way to calculate it would be 100 minus the 12th month production divided by the 1st month production (can be confusing bc the first month reported isn't always a full month and that can hide some of the actual decline.)

Looking at the data i still don't see any wells that have a 30% decline in the first year, even calculating it your way.

 

[estseon]

"First year decline rate is equal to 100 minus the rate at day 365 divided by the rate at day 1. Another way to calculate it would be 100 minus the 12th month production divided by the 1st month production"

Please explain.

Firstly, you talk about rates of decline.

Then you equate rate of decline to physical production and bring in an absurdity (100 - 12th month production.....)

I can only make sense of [(Prod month 1-Prod month 13*)/Prod month 1] x 100

* using month 13 ensures a full 12 months temporal span. If the production for month 12 is used instead, so be it.

We are talking about Sugarloaf and we have not yet seen full production from the completed wells. None have had production tubing installed. The Live Oak results (a few miles away) are on TRRC's website.

 

[gerkin02]

From ADI management.

Expect 80% decline in production (1st year),40% decline 2nd year.

50% of EUR produced in first 18 months.

All the best.

 

[Agentm]

From ADI management.

Expect 80% decline in production (1st year),40% decline 2nd year.

50% of EUR produced in first 18 months.

All the best.

seems to match up with the AUT statements perfectly

i have posted them also

well done for posting that up gerkin, it may stop the debate, who knows?

 

[choppy]

Firstly, you talk about rates of decline.

Then you equate rate of decline to physical production and bring in an absurdity (100 - 12th month production.....)

I can only make sense of [(Prod month 1-Prod month 13*)/Prod month 1] x 100

* using month 13 ensures a full 12 months temporal span. If the production for month 12 is used instead, so be it.

Sorry if I was confusing bc I didn't use parantheses it should have read 1.00-(12th month divided by 1st month).

Anyway you slice it 30% is a pipe dream. I am glad ADI cleared it up for all you dreamers/rampers out there.

 

[Agentm]

Sorry if I was confusing bc I didn't use parantheses it should have read 1.00-(12th month divided by 1st month).

Anyway you slice it 30% is a pipe dream. I am glad ADI cleared it up for all you dreamers/rampers out there.

as did petrohawk for me

lol

i love it when the likes of petrohawk ramp the regions that imho are lesser in quality to the karnes county region,,

this is what they say just on mcmullen county wells on their website


Production data from the four wells completed to date indicates lower initial annual decline rates, and a flatter hyperbolic decline, than those observed in other shale plays

These measurements, as they relate to other shale plays, suggest that the Eagle Ford Shale in this particular area is one of the highest quality shale reservoirs discovered to date in the United States.

i do think petrohawk were correct on their analysis..

i equally like the murphy comment on the shale play in karnes, they compare their mcmullen gas well and the karnes county oil wells and make a very obvious comment..

Drees A-79 1-H Well

“In the oil trend our number Drees number one in Karnes County came in at 1462-barrels of oil a day plus 1.25 million cubic feet of gas and had a 30-day production average of 1264-barrels of oil and 1.1 million cubic feet of gas per day. Clearly, a very strong well, and one that sets us up for a nice development.”

“The oil well in the Karnes is a great well and today, I was looking this morning before I came in and it's flowing 860-barrels of oil and 770,000 cubic feet. So that's after almost 60 days, 58 days today of production, so a real strong well.”

George Miles Well

“The second well in this acreage block spud shortly. The other two drilled wells are situated in the gas trend and are in various stages of completion. The earlier reported well test at the George Miles number one well in McMullen County is producing at less than 1 million cubic feet a day.”

“Here (George Miles well) our frac treatment did not open up all of the zones we thought and we are re-looking at our options. We have just completed a previously drilled well Ash Number 1 purchased as part of an acreage drill that's in LaSalle County and clean up is just above 2 million cubic feet a day.”

“Our budget for the Eagle Ford this near had a nominal 10 million cubic feet a day and clearly we aim to improve on that. On the beauty of this particular play is the ability to ship focus between the oil to the gas parts as product prices dictate.We’ve got $115 million in our budget for Eagle Ford spend.”






what the likes of petrohawk and murphy are saying about the eagleford may be pipe dreams and ramping to some, but imho they are still very very valid comments and i will maintain my position in the jvp, and in particular in the cashed up adi share.

i am satisfied that hilcorp have achieved comparably, the best performances in their results for the jvp seen in the eagleford..

i may be dreaming as choppy suggests, but the eagleford is showing decreases in early declines all the time, imho there have been many improvements in the eagleford region since the early wells went in..

pipe dreams and ramping by the major companies like conoco, murphy and pioneer, and smaller outfits like petrohawk.. and the entry of many more majors like exxon and others leaves me to believe these pipe dreams may be believed by many more..

adi was extremely fortunate to be able to secure excellent acreages very early on through the excellent work of conoco and tcei..

i dont think the play in the ami is a pipe dream, and the recent ramping announcements of the morgan well speaks for itself in terms of how good it is,,



5 May 2010

Morgan #1H

Following the successful fracture stimulation of approximately 4,400 ft of horizontal section as per the frac design, the Morgan #1H well was flowed back to sales commencing on 27 April 2010. The well production has now stabilized and the following Initial Production rate was achieved:

5.16 mmscf/d Gas & 2,046 bcpd or 31 mmscfe/d

good luck to all holders

 

[WRONG'UN]

Gerkin02
Are the ADI management talking about:
the difference between the initial production rate and the production rate 12 months later.
or
the difference between the production rate at the end of the first month and the production rate 12 months later
or
the difference between the average production rate of the first month (month 1) and the average production rate for month 13 - ie 12 months of decline
or
something else

It is really important that we are absolutely clear on what we are talking about.

 

[Agentm]

although in lasalle and mcmullen to the west, they only have eagleford, the sugarkane, which is austin chalks and eagleford is a different play in some respect

it has the same characteristics in the eagleford, plenty of oil, and so far in our region the play is as good as it gets..

then if you follow the comments from conoco then the chalks aspect speaks for itself

http://www.conocophillips.com/EN/in...alls/Documents/Analyst Meeting Transcript.pdf

I'd just reinforce the Eagle Ford. At this time we have a big position in the Eagle Ford - we've amassed over 300,000 acres in the overall Austin Chalk and Eagle Ford trend, about 240,000 of that in the sweet spot of just the Eagle Ford, the rest of that in the nice Austin Chalk play. We continued to drive down costs and see such good rates that we decided not to flip any of our acreage and we're just ramping up rigs now.


For example, we are in a very oily part of the play relative to some of the competition, Petrohawk and others in a more dry gas part of the play. Last fall, we tested a well at a rate of about 4.5 million cubic feet a day and 1,800 barrels of condensate per day.

So, over 11 million cubic feet equivalent a day, but two-thirds of that liquids.

So, this high liquid content, the high value, is consistent with our strategy of delivering near-term value in the liquid side, and we're adding rigs to the play, and really focused on Eagle Ford now, but what we haven't talked about much is equally interesting.

Stacked over most of our Eagle Ford acreage is a beautiful Austin Chalk play. We've drilled some laterals in the Austin Chalk and achieved exceptional rates, good liquids content in the Austin Chalk as well. So, I expect we'll be exploiting that play for a decade later; after we're done with the Eagle Ford, coming back and hitting most of the Austin Chalk with laterals.

lol


still dreaming on i guess, but so is ole conoco imho..

maybe they are right about the play maybe they are wrong.. but all data i have seen points me in the direction of investing in adi.. its cashed up and ready to run on this play right now..

all imho (and conoco's) and dyor..

 

[rcm617]

If you look at figures from kennedy and weston and take off the 30 day production from the 60 day production, you get a decline of 34% for condensate and 8.7% for gas from the first month to the second month.

 

[Agentm]

If you look at figures from kennedy and weston and take off the 30 day production from the 60 day production, you get a decline of 34% for condensate and 8.7% for gas from the first month to the second month.

absolutely correct..

i think it been stated many many times in the last days what the declines are and pretty much cleared up.. pretty nice decline there and those wells are reported as this

Kennedy #1H
This well was the first to be brought on line following stimulation and has been on continuous production since 29 January 2010, it has not yet had production tubing installed.

Q1 2010 gross production - 29/01/10 to 31/03/10 (62 days)

Total Gas – 151 mmscf (average 2.44 mmscf/d)
Total Condensate – 31,383 bbls (average 506 bpd)
Average Daily Gas Equivalent – 9.12 mmscfe/d^

60 day gross production

Total Gas – 148 mmscf (average 2.47 mmscf/d)
Total Condensate – 30,825 bbls (average 514 bpd)
Average Daily Gas Equivalent – 9.26 mmscfe/d^

Weston #1H

This well has been on continuous production since 16 February 2010 and has not yet had production tubing installed. The 60 day gross production has been estimated to allow comparisons to be made.

Q1 2010 gross production - 16/02/10 to 31/03/10 (44 days)

Total Gas – 253 mmscf (average 5.76 mmscf/d)
Total Condensate – 16,648 bbls (average 378 bpd)
Average Daily Gas Equivalent – 11.74 mmscfe/d^

60 day gross production*

Total Gas – 342 mmscf (average 5.7 mmscf/d)
Total Condensate – 21,351 bbls (average 356 bpd)
Average Daily Gas Equivalent – 11.4 mmscfe/d^
^equivalent gas rates have been calculated using an industry standard 12:1 conversion of oil to gas and an uplift to the gas volume of 25% representing the high calorific content of the gas.
*this figure is based on 57 days data and 3 days extrapolation based on the decline observed in the last day of reported data

On 25 March 2010 Adelphi reported 30 day average production figures (calculated on the same basis) and these were: Weston #1H – 11.5 mmscfe/d and Kennedy #1H – 11.7 mmscfe/d.

By comparison the Petrohawk (NYSE:HK) announcement released on 01/02/10 had a 30 day average from 19 wells in its Hawkville Field at 7.8 mmscfe/d and a 60 day average from 18 wells at 6.6 mmscfe/d when calculated on a 12:1 basis.

Sugarloaf AMI Fracture Stimulation Program

Adelphi has been advised that due to a late scheduling change, the Morgan #1H well will now be the first well to be fracced ahead of the Easley #1H well with operations expected to start very shortly.

Chris Hodge, Adelphi Managing Director commented that: "The 60 day average production results from the first 2 farmout wells are excellent and confirm the highly prospective nature of the Sugarloaf area. We look forward to the results of the forthcoming fracture stimulation operations on our next three Sugarloaf wells which we expect to further demonstrate the production potential across a large proportion of our acreage. Our Operator is to be
commended for having drilled these wells very quickly and efficiently, with the resultant drilling cost reductions significantly enhancing well economics."

 

[Sdajii]

This might be a stupid question (I am a biologist, not a geologist)...

The plan is to Eagle Ford is below the Austin Chalk. If the Eagle Ford hydrocarbons are extracted, is it possible that the hydrocarbons from the Austin Chalk above could seep down and become less available for extraction?

This may take hundreds or thousands or millions of years rather than a short few, or it may be a stupid thing to wonder at all, but can someone comment?


I also think it's interesting that the claim was made in the AUT presentation that improvements have been made in IP rates and early decline rates. If these are improving, doesn't it follow that the excellent IP rate from the most recent well could be due to improved methods/technology rather than being in a good position? Hey, even if the high rate is from improved technology it makes our position strong, if we get to sell the oil and skip into the sunset with the profits I don't really care about whether we had some nice drilling or nice land.

I think it would be good if we could get a better understanding of the relevance of IP rates and a firmer grasp of decline rates. At the moment it seems like some people are trying to extrapolate unreliably (whether underestimating or overestimating, I am not sure). If the methods are changing, it follows that comparing the IP rates and decline rates of different wells is like comparing apples and oranges. We don't seem to be able to decide on a typical rate of decline, and claims range from 30% to 80%, which is puzzling to a biologist.

 

[Hatchy]

All this talk of "pipe" dreams, and the dreams are a reality because we have oil and gas flowing to sales through a pipe.... I'm actually quite sure pictures have surfaced here of that actual pipe.

Why the surfing reference of 'pipe' dream? seems a bit off skew.

 

[lemontree]

This might be a stupid question (I am a biologist, not a geologist)...

The plan is to Eagle Ford is below the Austin Chalk. If the Eagle Ford hydrocarbons are extracted, is it possible that the hydrocarbons from the Austin Chalk above could seep down and become less available for extraction?

This may take hundreds or thousands or millions of years rather than a short few, or it may be a stupid thing to wonder at all, but can someone comment?


I also think it's interesting that the claim was made in the AUT presentation that improvements have been made in IP rates and early decline rates. If these are improving, doesn't it follow that the excellent IP rate from the most recent well could be due to improved methods/technology rather than being in a good position? Hey, even if the high rate is from improved technology it makes our position strong, if we get to sell the oil and skip into the sunset with the profits I don't really care about whether we had some nice drilling or nice land.

I think it would be good if we could get a better understanding of the relevance of IP rates and a firmer grasp of decline rates. At the moment it seems like some people are trying to extrapolate unreliably (whether underestimating or overestimating, I am not sure). If the methods are changing, it follows that comparing the IP rates and decline rates of different wells is like comparing apples and oranges. We don't seem to be able to decide on a typical rate of decline, and claims range from 30% to 80%, which is puzzling to a biologist.

30 Day decline rates reported thus far are ~30%, gerkin posted an 80% first year decline followed by a 40% decline in the second year. So our main interest should lie in whether the play is economically viable and how much money could be made from it as such. I think i read somewhere that the play would be economically viable even at $45/bbl oil. I do not have the necessary sources to back up what i'm saying, this is just my own speculation.

 

[Sdajii]

Haha! True true, this literally IS a pipe dream!

30 Day decline rates reported thus far are ~30%, gerkin posted an 80% first year decline followed by a 40% decline in the second year. So our main interest should lie in whether the play is economically viable and how much money could be made from it as such. I think i read somewhere that the play would be economically viable even at $45/bbl oil. I do not have the necessary sources to back up what i'm saying, this is just my own speculation.

Clearly we need to know if this is economically viable and if so how viable, and if there was a bottom line, that would be it.

Presumably whether or not it is viable depends primarily on three things:

1) Cost of setting up infrastructure

2) Amount of oil produced

3) Price of oil

(yes, there will be ongoing costs associated with maintenance etc, but my understanding it that the bulk of the costs come from putting a well in the ground, setting up the pipe, etc, and other costs are small in comparison).

My understanding is that we have a reasonably good idea of the cost of the wells (5-7 million dollars or something in that ball park).

We can then presumably say "At x barrels produced on average per well, oil would need to cost $y per barrel in order for this to be viable". This could fairly easily be plotted on an x-y axis with a parameter of, say, profitable equals wells paid off after 12 (or six or 24 or 70, etc) months. Price of oil on the x axis, production per well required on the y. Then we just need to try to extrapolate how much oil we'll get per well based on currently available data.

To say that this would be viable at $45 per barrel implies you have a very accurate figure on how much oil we are going to be producing per well, but I think at this point it's unrealistic to have that. We're still working with two big unknown values (market oil price and production/production efficiency/cost of producing each barrel). If you ask a hundred people on the street if the price of oil is going to go up or down over the next few years, at least 98 will probably say up. We can *probably* assume oil is going to remain a valuable commodity, and if anything it will be higher in a year or two than it is now (if anyone wants to disagree, please shoot me down).

So, if we can look at the IP rates so far, we should be able to work out what decline rates are necessary for this to be viable (assuming our average IP rate to date is indicative of the average IP rates we'll get in the future). The maths is easy and I love to crunch numbers, but there are gaps in the data I need to start crunching. If we assume oil will remain around where it is, we can plot decline rate on the x axis and profit on the y axis.

If the above graphs sound worth seeing, I'm happy to make them if anyone wants to confirm a few figures and assumptions.

 

[philly]

whilst everyone here is pre occupied with production rates and flow rates I am comforted by the fact that 2 ADI directors have purchased more shares this week - on 11/5/10 Mr Hodge brought 25000 shares @ 0.265 cents each and on 12/5/10 Mr Forcke brought 50000 shares @ 0.265 cents each. This has to be a positive sign. Good news coming soon I expect. I am a holder

 

[Sdajii]

whilst everyone here is pre occupied with production rates and flow rates I am comforted by the fact that 2 ADI directors have purchased more shares this week - on 11/5/10 Mr Hodge brought 25000 shares @ 0.265 cents each and on 12/5/10 Mr Forcke brought 50000 shares @ 0.265 cents each. This has to be a positive sign. Good news coming soon I expect. I am a holder

Either good news coming, or maybe more likely, the directors just understand how underpriced they were at 26.5c! Either way, it's a positive sign

 

[Agentm]

lol

this from another forum

gotta love the talk over there in the Uk on eme, a small partner in the sugarkane AMI .. hearing a lot of talk on kowalik from all over the place.. nothing like this though

claims it came straight from the horses mouth

lets see if the reliable posts this person has placed over the years comes through

bishopawn - 14 May'10 - 13:49 - 80490 of 80527

Contact has it that things are going very well indeed at the moment = "extremely well" to be exact. 2 to 5 rigs on the go for the rest of the year because they have been so successful at Sugar. Kowalik will be done by the end of June is the talk at the mo. They know what they are doing. Bring it all on boys and some.

 

[Miner]

lol

this from another forum

gotta love the talk over there in the Uk on eme, a small partner in the sugarkane AMI .. hearing a lot of talk on kowalik from all over the place.. nothing like this though

claims it came straight from the horses mouth

lets see if the reliable posts this person has placed over the years comes through

bishopawn - 14 May'10 - 13:49 - 80490 of 80527

Contact has it that things are going very well indeed at the moment = "extremely well" to be exact. 2 to 5 rigs on the go for the rest of the year because they have been so successful at Sugar. Kowalik will be done by the end of June is the talk at the mo. They know what they are doing. Bring it all on boys and some.

Agentm

You have always demonstrated to be a conformist of best practice and I mean it.
To align with that best practice, may be you please disclose the name of the forum and the contact.

Your contribution to ADI forum and all interactions have been truly to the top of any one I have ever seen. Commendations for that.

Please for heaven's sake do not consider I am having a Go with you . But in line with ASF guidelines reference of any real 'reference" without citing them probably a breach. No offence and you know where from I am coming.

Regards