The last several years provided some of the most economic shale wells ever drilled in the US, one of the many reasons it has been difficult to slow down onshore production.
An average horizontal well in a shale play reaches its peak production within about six months, and then production falls off almost as quickly as it rose.
Chesapeake’s (CHK) Thurman Horn 406H well drilled in 2012 in the Anadarko Basin had an IP rate of 5,427 barrels a day. This well is located in the Mills Ranch Field out in Wheeler County in the Texas panhandle and came online back in May of 2012.
Oil Production History
In the first 12 months, the Thurman Horn 406H produced an astonishing 469.08 Mbbl (thousand) of oil, averaging almost 40 Mbbl of oil per month. For the last 12 months, production has fallen to 12.1 Mbbl of oil, averaging 1 Mbbl and has now produced a total of 564.29 Mbbl of oil.
Gas Production History
In the first 12 months, the Thurman Horn 406H produced 1.89 Bcf of gas, averaging almost 158 Mmcf of gas per month. For the last 12 months, production has fallen to 290 Mmcf of gas, averaging 24.1 Mmcf and has now produced a total of 3.36 Bcf of gas.
Economics
Average crude oil prices in 2012 were at historically high levels for the second year in a row. Brent crude oil averaged $111.67 per barrel, slightly above the 2011 average of $111.26. West Texas Intermediate oil averaged $94.05 per barrel in 2012, down slightly from $94.88 in 2011.
Average wellhead prices for natural gas fell significantly throughout the United States in 2012 compared to 2011 and were at approximately $2.66 per mcf.
Based on $94 oil and $2.66 gas pricing, the Thurman Horn 406H generated just over $49,000,000 in total revenue in the first 12 months, before taxes and royalties.
Summary
By all accounts, this has been an outstanding well for CHK and with their current debt load one they wish they had more of. They went on to drill the Thurman Horn 407H and Thurman Horn 408H later in 2012, both excellent wells. The Thurman Horn 407H was almost as good and has now produced a total of 444.7 Mbbl of oil and a total of 3.42 Bcf of gas.
