Retired Fort Worth resident Dale Whitson periodically e-mails his four "grandkids," now in their 30s, about topics he feels are worthy of note. His latest missive is about the "monster" Barnett Shale well in southwest Arlington, chronicled in Tuesday's Star-Telegram, that produced an average of 17.824 million cubic feet of natural gas per day in September. That's by far the highest one-month average ever among the approximately 14,000 producing Barnett wells.
Whitson telephoned the Star-Telegram today, wanting to know just how much revenue the well, named the White South #1-H, might have produced per day in September. Chesapeake Energy, the well operator, hasn't released revenue figures. But a quick Star-Telegram calculation shows that, at a hypothetical price of $4 per 1,000 cubic feet, the well would have yielded an average of $71,296 per day, or more than $2.1 million for the month. Gas prices recently have been roughly in the $4 range, though prices vary and some producers realize considerably higher prices through hedging contracts.
Chesapeake said Monday that it cost about $3.5 million to drill and complete the well, which has the capability to generate more revenue than that in just two months or so, based on its September output. Some Barnett wells are expected to produce 30 years or more, but production is generally higher in a well's early life. As a result of weak gas prices, Chesapeake has cut production on the monster well to about four million cubic feet of gas per day.
--Jack Z. Smith
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How do the gas companies calculate the size of the lot? When I signed a lease on my first home, they calculate my property going halfway into the street. If you have a street in your front and back, do you calculate to the middle of both?
Posted by: Mark Henning | November 16, 2010 at 06:09 PM